Help with additional fund

nxdmsandkaskdjaqd

I am in need of some pointers of fund(s) that I could add to my portfolio:

My current holdings are (all equities):
14% Global Emerging Markets
27% UK Smaller Comp's
16% UK Equity High Income (Std Life)
12% North American
20% European Smaller Comp
12% FTSE 250 Index

I wish to use this year’s ISA allowance and sell all my holdings of UK Equity High Inc into this new area.

I am looking for an accumulation fund with returns of about 10 to 15%.

I am not adverse to risk and have no interest in property funds or gilts or bonds. I would also not want to invest anymore in North America and the Emerging markets as they are not performing well as they have in the past.

Regarding the UK Equity fund, I know it’s a good idea to balance the portfolio and have some large cap UK companies. I have looked for alternative funds in this area that are performing better, but there is nothing, I could see, that satisfied my objectives. I could purchase a FTSE 100 tracker, but the FTSE 250 tracker is performing better at the moment, so I didn’t see the point in doing that.

I would appreciate any points that might meets my needs.

bendix

A couple of sector funds might be good, something a bit specialist. A healthcare fund, for example or a tech fund such as GLC Technology Equity, which I'm quite keen on at the moment.

Or a resources fund - Blackrock Gold and General (covers gold and silver mining companies) or First State Global Resources, which has a wider exposure to other miners in areas like copper, tin, even diamonds I believe.

And one of my favourites - Artemis Strategic Assets, which has the freedom to invest in pretty much anything (shares, bonds, resources, metals and even forex)

dunstonh

You have a very high UK exposure. Most of the sector allocation models have been dropping back on UK exposure. What is your reason for sticking with such a high amount?

nxdmsandkaskdjaqd

dunstonh wrote: »

You have a very high UK exposure. Most of the sector allocation models have been dropping back on UK exposure. What is your reason for sticking with such a high amount?

There is no specific reason for this. I have been trying to improve my balance over the last 6 months, since moving from Towry/EJ. I still need to understand more and make adjustments.

Rollinghome

I always try to avoid suggesting to others where they invest, that's for them to decide, but would suggest you rethink some of your assumptions.

I would also not want to invest anymore in North America and the Emerging markets as they are not performing well as they have in the past.

It's not a good idea to invest purely on past performance, especially on very recent past performance. Do you avoid buying strawberries when they're in season and only buy when they're reassuringly expensive? If assets can be bought cheaper now than before then that's often a good reason to buy, not to avoid. You may be right about avoiding both the US and emerging markets but for the wrong reasons. You need to look forward not back.

I am not adverse to risk... I know it’s a good idea to balance the portfolio

That's bit of a contradiction. The main reason to balance a portfolio is to reduce risk. The tradeoff, which most people are happy to accept, is that the returns will be lower than from a gamble on a very concentrated pf - if it happens to come off.

I could purchase a FTSE 100 tracker, but the FTSE 250 tracker is performing better at the moment, so I didn’t see the point in doing that.

Again, you're looking at the past, what's already happened, not looking forward to what you expect to happen.

I am looking for an accumulation fund with returns of about 10 to 15%.

Sorry, but that's unlikely to be a realistic expectation without erosion of capital in the current climate, especially with a balanced pf. If you stay ahead of inflation and don't give back the gains of the last two years then you shouldn't be disappointed.

The annual Barclays Capital Equity Gilt studies show that over the very long term equities can be expected to outperform cash - but that's measured before all costs. After the very high charges and costs of unit trusts, which will total well above the published TERs, it becomes a close run thing. To make the right investment decisions you need to be realistic.

nxdmsandkaskdjaqd

bendix wrote: »

A couple of sector funds might be good, something a bit specialist. A healthcare fund, for example or a tech fund such as GLC Technology Equity, which I'm quite keen on at the moment.

Or a resources fund - Blackrock Gold and General (covers gold and silver mining companies) or First State Global Resources, which has a wider exposure to other miners in areas like copper, tin, even diamonds I believe.

And one of my favourites - Artemis Strategic Assets, which has the freedom to invest in pretty much anything (shares, bonds, resources, metals and even forex)

Thank you for the feedback. I did look at the funds, but found the Risk Level a little high for me (some were approaching 20).

cashbackproblems

nxdmsandkaskdjaqd wrote: »

Thank you for the feedback. I did look at the funds, but found the Risk Level a little high for me (some were approaching 20).

where do you find out such a rating for each fund?

xrjtg

Rollinghome wrote: »

That's bit of a contradiction. The main reason to balance a portfolio is to reduce risk. The tradeoff, which most people are happy to accept, is that the returns will be lower than from a gamble on a very concentrated pf - if it happens to come off.

It's not necessarily a contradiction, as there are two relevant kinds of risk: those that you get compensated for, and those that you don't. Buying shares in oil exploration companies is risky because if their two or three chances to find oil don't come off you lose everything, and this risk is reflected in the pricing of the company's shares. Buying shares in any single company is risky because the variance of your portfolio is then the variance of that company's share price. You can get the same expected returns with lower variance by investing across multiple companies, so the market doesn't reward you for taking on such a risk.

An analogy I saw recently was that of a builder receiving danger money for working at height: it would be even more dangerous if they were also drunk at the time, but they won't get paid more for turning up to work drunk, as that risk could be completely avoided by giving the job to somebody else―it's not inherent to the job, just as the risks associated with lack of diversification are not linked to any particular stock.

nxdmsandkaskdjaqd

cashbackproblems wrote: »

where do you find out such a rating for each fund?

If you go to Trust Net most of the funds have a Key Ratios & Analysis section (top right hand side). One of the elements of this is Volatility.

http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=KZF78&univ=U

cashbackproblems

nxdmsandkaskdjaqd wrote: »

If you go to Trust Net most of the funds have a Key Ratios & Analysis section (top right hand side). One of the elements of this is Volatility.

http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=KZF78&univ=U

Thats for that! WHat do the numbers mean? for example of one mine jp natural resources it says yr 1 21.72 and 3yrs 34.6

dunstonh

You have to be careful looking at snapshot volatility ratings. A fund with a wider investment objective could be holding more cash at the time of the snapshot and appear less risky if you are only looking at that date. You need to look over a longer period. The paid for version of trustnet gives a historical spread. I dont think the free version does that.

Thats for that! WHat do the numbers mean? for example of one mine jp natural resources it says yr 1 21.72 and 3yrs 34.6

Without looking it up, that sounds like the sort of figures you would expect for the cumulative growth of that fund over those periods. Which you would expect in that period for that type of fund.