Comparing these 2 funds

bendix

Cardinal-Red wrote: »

I am, slowly but surely (!) building a balanced portfolio of funds inside my H-L S&S ISA.

I put aside a set amount every month split into equal values, buying units in a basic FTSE tracker, an emerging markets fund, the Artemis Retail fund, and also Blackrock Gold and General.

I want to look somewhere else as I have nearly 40% of my funds in Emerging Countries.

I have been thinking of a 'commodities' fund - and identified this one:

http://online.h-l.co.uk/funds/security_details/sedol/3183511

(JP Morgan Natural Resources (Acc) Units)

But looking at the fund, I am worried that this would be a massive exposure to mining, when combined with my Blackrock fund, and that I own some shares in the Petropavlosk mining company.

Would you guys agree with this? And if so, are there any 'commodities' funds with less of a focus on mining, or is this an inevitable element of commodities?

I'd rethink this. You would be very heavily exposed to mining and resources stocks because the FTSE is so heavily geared to mining and resources companies too.

What about technology? Or another region, like Latin America? Or US. Or Europe?

jayship

Emerging markets are the place to be at the moment as UK and Europe are unlikely to do well in the short term.However as you are with HL it is easy to keep an eye on the funds and switch. They rebate most of the buying cost and you are better off to take a small loss and reinvest in a fund doing well by researching on their website. There are many emerging funds doing well and not possible to list all. Although you are taking a small gamble now the long term returns will be worth the wait. The mantra is keep an eye and get out if it's not doing well . I recently sold BRIC as it was not recouping my losses for several months. I hope this helps in some way.

Cardinal-Red

bendix wrote: »

I'd rethink this. You would be very heavily exposed to mining and resources stocks because the FTSE is so heavily geared to mining and resources companies too.

What about technology? Or another region, like Latin America? Or US. Or Europe?

Yes you're right I have rethought this and having used the analysis tools suggested by a poster above, I identifed that my exposure to Europe was very low, and so have cancelled the plans for the resources, and instead gone for a Europe ex-UK fund instead.

I'll continue my investment into the Aberdeen Emerging Markets too but hope to reduce my overall % exposure to this over the coming months as it still remains quite high.

mr_fishbulb

jayship wrote: »

The mantra is keep an eye and get out if it's not doing well . I recently sold BRIC as it was not recouping my losses for several months. I hope this helps in some way.

No offence, but that's the opposite of what you should be doing. Emerging Markets are extremely volatile and so will have some periods of negative growth But they should (in theory) give a large return over the longer term.

By selling your funds you crystallized your losses. I.e. you turned a paper loss (which could have recovered and turned back to profit) into an actual loss (where you will not benefit from any recovery as you are now holding cash).

mr_fishbulb

Cardinal-Red wrote: »

I identifed that my exposure to Europe was very low, and so have cancelled the plans for the resources, and instead gone for a Europe ex-UK fund instead.

What benchmark are you using to determine you have low exposure to Europe? Are you following a "have x% here, y% there, z% in this, etc model? Or do you believe there will be growth in Europe and therefore want to increase your exposure?

Not trying to be arrogant with these questions (soz if it reads like that), but when I decide on how much to invest in each area/sector I ask myself what growth I see there.

For example I'm just over 10% in Europe (ex UK) in both my pension and ISA, but I don't want to be any more. I don't see much growth in Europe over the coming few years, and I don't see problems with the Euro going away soon. If I did want to have more in Europe I might look at the non-Euro and emerging Europe countries, but that's a bit specialist for the amount I actually have invested.

bendix

mr_fishbulb wrote: »

What benchmark are you using to determine you have low exposure to Europe? Are you following a "have x% here, y% there, z% in this, etc model? Or do you believe there will be growth in Europe and therefore want to increase your exposure?

Not trying to be arrogant with these questions (soz if it reads like that), but when I decide on how much to invest in each area/sector I ask myself what growth I see there.

For example I'm just over 10% in Europe (ex UK) in both my pension and ISA, but I don't want to be any more. I don't see much growth in Europe over the coming few years, and I don't see problems with the Euro going away soon. If I did want to have more in Europe I might look at the non-Euro and emerging Europe countries, but that's a bit specialist for the amount I actually have invested.

That's all very well - and you take a sophisticated approach which is fine with you - but at the end of the day all the analysing in the world is just navel-gazing and guesswork and there comes a point where you just have to take a punt.

I'm around 12% in Europe more by accident than design - adding a bit more to an existing fund here, buy a new fund there - and it just sort of feels right.

jayship

Most funds do recover in the long term BUT by switching into a better performing fund you are likely to recover your losses quicker and benefit in the long term. There is no way to forecast the future growth so it is best to keep an eye and switch switch switch. That's what i do but it may not suit everyone.

mr_fishbulb

bendix wrote: »

That's all very well - and you take a sophisticated approach which is fine with you - but at the end of the day all the analysing in the world is just navel-gazing and guesswork and there comes a point where you just have to take a punt.

Maybe I look looking into my navel

cashbackproblems

bendix wrote: »

Yes, Inv Perp Monthly Income Plus is predominantly invested in corporate bonds, although it does have a number of defensive stocks such as GSK, AZ etc.

I don't think you completely understand the nature of the fund - it clearly says in its asset allocation list that it is invested in bonds 77%.

It holds these bonds and they pay an underlying dividend. Becuase you have chose the accumulation option, these are not paid to you as income. Instead, they are reinvested (ie accumulated).

Bond funds can fall and rise in capital values just as much as share funds. In fact, there is a school of thought that with interest rates so low and likely to rise, the best time for investing in these has passed (if you want capital appreciation).

thats for that, so with bonds im guessing you get a higher yield because its being reinvested and your not getting a regular income?

Are there any other funds you can recommend?

I am looking to reinvest any dividends and make small monthly top ups.

cashbackproblems

Also is iii cheaper than HL, these are iii's charges

ChargesStandard (Fund Manager) Initial Charge5%

Interactive Investor Initial Charge1.00% (80.00% off standard charge)

Annual Management Charge (AMC)

1.25%Total Expenses Ratio (TER)1.44%