critique my portfolio

inflationiscoming

I would appreciate the wisdom of all the clever people out there. Thanks in advance!

I am 28. My pension is obviously for retirement. The fund portfolio is to build up wealth for the long-term. I may use it in around 5 years to contribute to mortgage, depending on state of market. But equally I could leave it for retirement. Cash and provisioning adds up to around 6 months outgoings, I know this is risk averse, given the usual advice is 3 months. In addition to the monthly savings below, in the coming months, I was thinking of investing £500 or £1000 in the next issue of NS and I index linked bonds. Also this year I was thinking of another 3 sets of £1000 high dividend large cap FTSE 100 shares.

value / proportion of total pot / TER
AXA Framlington Health Accumulation Units £1,131 / 5.23% / TER 1.57%
HSBC Japan Index Accumulation Units £45/ 0.21%/ TER 0.29%
JPMorgan Emerging Markets Accumulation Units £1,134/ 5.24%/ TER 1.67%
Legal & General Global 100 Index Retail Accumulation Units £1,035/ 4.78%/ TER 1.15%
Legal & General Global Emerging Markets Index Accumulation Units £1,068/ 4.93%/ TER 0.99%
Neptune Africa Fund Class A Accumulation £53/ 0.24%/ TER 2.50%
Neptune India Class A Retail Accumulation £54/ 0.25%/ TER 2.28%

Tesco Shares £1,000/ 4.62%
Capita Shares £1,000/ 4.62%

N S and I index linked 3 years (approx 1 year in) current value: £523/ 2.31%

Cash savings (ISA) £5,050 / 23.33%
Cash provisioning (savings accounts) £3,858 / 17.56%
Weighted average interest rate on cash 3%, mostly easy access plus a regular saver

Pension pot value (in broad based global funds, approx weight by share of global GDP) £5,775 / 26.68%

total £22,101

Monthly savings
Pension - defined contribution from employer £156
Monthly reg saver £25

Monthly fund contribution
JPM Emerging Markets Accumulation £50.00
HSBC Japan Index Accumulation £50.00
Neptune Africa Fund Accumulation £50.00
Neptune India (Class A) Accumulation £50.00
Legal & General Health & Pharmaceutical Index (R) Accumulation £50.00

Total monthly savings (excluding reg saver) Approx 13.5% of net income

bobsy31

Only a personal opinion, I would go for a couple of alternatives to the ones you've chosen.

Instead of a fund solely focussing on India you could choose one that covers more than 1 country in that region

Same goes with the Africa fund, perhaps one covering Middle east and africa.

First State Greater India & Investec Middle East & Africa are two I have looked at when investing in these regions

Totton

Hi,
Interesting stuff, some of it makes little sense to me though but I expect you have a good reason for the small amounts in those Neptune funds. However I don't see how a 1/4% makes any worthwhile contribution to the portfolio. Perhaps wrap those Neptune funds into their Neptune Global Equity fund which covers Geffen's main ideas?

You seem to be favouring heavily the Asian and Pharmaceutical areas, would it not be worthwhile diverting something into Russia or Latin America, perhaps via another Global Emerging Markets fund rather than the split you currently have. You could wrap all of those fund holdings into a couple of EM funds which would make it still high risk but less work keeping an eye on those that you have.

The two equities represent a significant part of the portfolio and seem strange holdings, are they there to balance the aggressive funds you hold?

Overall I find the portfolio high risk for a possible mortgage use in 5 years, perhaps it may be worthwhile splitting the holdings into 'ideas' such as Global Growth, Emerging Markets, Themes etc. Then apportion a % to each area to see where the portfolio currently sits. That would give you a clear view of where you are at versus where you would be comfortable.

One of the fascinating things about fund investing is the choices that we have. You'll always get different opinions, of those funds listed I would probably only buy the JPM Emerging fund but in reality I hold none of them at the moment but that does not mean my choices are any better than yours. It's all about how comfortable you are with the risks you take.

Regards,
Mickey

jimjames

Personally I would remove the direct share investments and put those into funds instead. If you are looking for dividend income then something like the Perpetual High Income might be suitable. This would also balance your UK investments which you have very little of - and are very dependent on the fortunes of 2 companies.

It might also be a good idea to remove the pebnsion amounts from your percentage calcs as it isn't money that is available for 30+ years so doesn't have the same impact as other holdings that can be sold at will.

inflationiscoming

Thanks all. Portfolio without the pension below.

In direct response:
Bobsby31 - thanks I will research those funds you pointed out.

Totton - I will consider your idea re: Neptune Global Equity. The small amounts currently in the Neptune Funds are because I have just begun to invest in them, the aim is (was) to build them in to a more substantial part of the portfolio over the year through monthly savings.

Yes the direct holdings are to balance the funds. Also not paying fees on some of my investments appeals to me. Pharma appeals to me as I know the sector reasonably well and with a longer-term horizon I think it is a winner. I will definitely be looking at LatAm and Russia

The mortgage idea, is just a possible. I hope to trade upwards in around 5 years, but won't "need" the money from my funds to do that. I will consider the thematic approach. When something is described as "growth" my reading is that this is capital growth, when described as "income" the focus is on dividends, is that correct?

JimJames - My plan was to balance out with an additional 3000 in FTSE 100 shares to increase UK exposure and not make me dependent on the fortunes of 2 companies.


value proportion of total pot TER

AXA Framlington Health Accumulation Units £1,131 / 7.13% / TER 1.57%
HSBC Japan Index Accumulation Units £45 / 0.28% / TER 0.29%
JPMorgan Emerging Markets Accumulation Units £1,134/ 7.14%/ TER 1.67%
Legal & General Global 100 Index Retail Accumulation Units £1,035/ 6.52%/ TER 1.15%
Legal & General Global Emerging Markets Index Accumulation Units £1,068/ 6.73%/ TER 0.99%
Neptune Africa Fund Class A Accumulation 53/ 0.33% / TER 2.50%
Neptune India Class A Retail Accumulation 54 / 0.34% / TER 2.28%
Tesco Shares 1,000 6.30%
Capita Shares 1,000 6.30%
N S and I index linked 3 years (approx 1 year in) 500 / 3.15%
Cash savings (ISA) 5,050 31.82%
Cash provisioning (savings accounts) 3,800 23.95%
total 15,868

Monthly fund contribution
JPM Emerging Markets Accumulation £50.00
HSBC Japan Index Accumulation £50.00
Neptune Africa Fund Accumulation £50.00
Neptune India (Class A) Accumulation £50.00
Legal & General Health & Pharmaceutical Index (R) Accumulation £50.00

bristol_pilot

Personally, with total savings of £22k I would not be putting any of it into the stock market at all. £22k is not a level at which I would be prepared to take any risk outside a pension. The stock market has done very well over the past 3 years or so with a full economic recovery now fully priced in, there is little reason to think this will continue. How would you feel if the market fell 30% or 50% and this meant you were unable to afford to buy a house? You simply don't have enough funds to spread your risk. Although you claim to be risk averse, you are following a high-risk strategy overall - which has paid off so far, to be fair.

The pension pot is a low value for your age and your monthly savings level, especially pensions saving, is too low a proportion of your net income IMO.

inflationiscoming

Sorry I was unclear. I have a place already worth circa 240k with in excess of 60 per cent equity in it. The comment about the mortgage was about my next move in around 5 years. I hope to be making more money by then so will afford a bigger mortgage, I was thinking of bolstering with additional funds from investments, but will not need that money and could easily leave it there for 30 years. I agree my attitude towards risk is odd. I am risk averse when it comes to cash holdings as I like the idea of having 6 months worth of outgoings, but I am happy to take a lot of risk with the remainder, hence willing to risk a large drop. I am coming round to the idea that I actually should hold less in cash.