My Fund Portfolio

Jegersmart

jamesd wrote: »

One area I've been reducing is my direct Latin American holding size, while also increasing European smaller companies.

I have gone the other way with some relatively minor allocations away from UK and Europe to Latin America for a longer term hold. Using vehicles that have less exposure to Brazil as I see Chile and some of the others as a better bet for now. Good luck to us both:D

Chargem

I am also considering starting a fund portfolio, and I wonder why people have so many different funds in their portfolio. The average fund seems to have over 100 holdings, so investing in 10 funds is like investing in over 1,000 companies.

Can a fund portfolio with five funds not cover all the necessary/required sectors of the world markets?

westy22

There is a difference between sectors and geography. Geographically there is UK, Europe, USA, South America, Asia, Pacific, Emerging markets etc. In sectors there are large caps, small caps, micro companies, technology etc.

Each fund will have a specific focus i.e. UK small companies. So, for full diversity you can calculate the permutations!

Jegersmart

Chargem wrote: »

Can a fund portfolio with five funds not cover all the necessary/required sectors of the world markets?

Well I think you can maybe do it in one fund. Fidelity Strategic Fund is allowed to be invested in Equity, Bonds, Commodities, money market and as far as I am aware there is no geographical limits within the fund's remit. Of course, the fund will not be invested everything at any one time.

Why do you ask? Is it too taxing to have a list with more than 5 items on it or does it get too complex?

I currently have 22 holdings across Pension, ISA and non-ISA holdings fwiw.

Totton

Chargem wrote: »

The average fund seems to have over 100 holdings, so investing in 10 funds is like investing in over 1,000 companies.

Can a fund portfolio with five funds not cover all the necessary/required sectors of the world markets?

Not really 1,000 stocks as many funds overlap holdings, in effect you can be buying very similar holdings rather than diversifying.

Morningstar previously did some research on this and reckoned that 7 funds was about all that you need. Personally I have tried this and have to say that it is fine but probably not for the faint hearted when you see your core holdings nosediving. With just 6 or 7 funds you really need a little bit of luck in getting the right ones, my preference is to have between 7 and 15 funds as I find that this 'feels' a little less risky that just 6 holdings.

Regards,
Mickey

Jegersmart

and it depends on the funds - verymuch so - some are very diversified anyway and others are more focussed. There is no right or wrong answer here - you should choose your investments based on your aims and whether this results in zero or 30 funds is very much a personal thing. The only time I envisage having less than 5 funds is when I go defensive and concentrate my holdings around weathering a storm to minimise downside and take risk off the table.

having said that, if you have like 10k to invest then of course you will be limited in number of funds anyway due to the minimum levels....

Chargem

Jegersmart wrote: »

Well I think you can maybe do it in one fund. Fidelity Strategic Fund is allowed to be invested in Equity, Bonds, Commodities, money market and as far as I am aware there is no geographical limits within the fund's remit. Of course, the fund will not be invested everything at any one time.

Why do you ask? Is it too taxing to have a list with more than 5 items on it or does it get too complex?

I currently have 22 holdings across Pension, ISA and non-ISA holdings fwiw.

I'm honestly just curious as to the thought process behind building a fund portfolio. I think for me, my attitude to risk is such that the time it would take to manage/monitor 20+ funds, I would rather take the same time and invest directly in 5-10 companies.

totton wrote:

Not really 1,000 stocks as many funds overlap holdings, in effect you can be buying very similar holdings rather than diversifying.

Morningstar previously did some research on this and reckoned that 7 funds was about all that you need. Personally I have tried this and have to say that it is fine but probably not for the faint hearted when you see your core holdings nosediving. With just 6 or 7 funds you really need a little bit of luck in getting the right ones, my preference is to have between 7 and 15 funds as I find that this 'feels' a little less risky that just 6 holdings.

Regards,
Mickey

Is there much difference between investing £500 in two largely overlapping funds and £1000 in the one fund?

The original poster of this thread lists a FTSE 100 index tracker and also the Invesco Perpetual high income Acc fund, which is about 85% based on large UK based equities. What is being gained by splitting funds between these two rather than putting the total in one or the other?

rickypatel89

Sorry to bring tho back, after some reconsideration I've decided to invest £4000 first and see how it goes. The funds I've been looking at are:

Aberdeen Emerging Markets Accumulation Shares - £1000
First State Latin America Accumulation Units
GAM Star Asia-Pacific Equity Accumulation Shares
Invesco Perpetual High Income Accumulation Units - £1000
JPMorgan Natural Resources Accumulation Units
Henderson Global Technology A Accumulation Units

I would like to choose one more from the four remaining ones from the above, I know they are all quite different and that's why I'm trying to get some direction.

Thanks

Thanks.

FATHEROFTWO_2

Are you sure you REALLY want to invest just now after seeing the crash on friday?

It might be better to see where the market goes next week

rickypatel89

I thought this was one of the best times to invest, when shares are down there's an opportunity to buy cheaply.