Rebalancing a portfolio

Mortgage_&_debt_free

Chrismaths wrote:

Rubbish as usual. I've explained the reasons before and I can't be bothered again.

M&DF - you have put down "SL High Income" - Is this Standard Life Higher Income or is this Standard life UK Equity High Income? The Higher Income fund is a high yield bond fund, and is very different to equity income.

Hi Chrismaths - sorry should have made it clear, it's SL UK Equity High Income Fund.
Cheers

dunstonh

We also have to consider here that the fund range available is going to be limited to that which is on offer. Some funds that we would perhaps invest in with a fund supermarket are not going to be available and that means making compromises and choosing the best option from what is available.

This is why AVCs and some personal pensions and most stakeholder pensions are unsuitable nowadays. The old reasons for doing some of these (mainly low charges) have passed with modern alternatives often now cheaper or the same on costs.

I did a standard life GPPP review recently and it was overloaded with UK equity funds but limited to a handful of funds in other sectors or no coverage in some.

Mortgage_&_debt_free

Hi Dunstonh
You are quite right that the AVC funds are limited. Because of this I am looking to fund the UK funds through my AVC + European as they have the funds I want to invest in available.

The rest of the portfolio I will invest using my S&S ISA for the funds I want that aren't available in the AVC. This ticks both the boxes I want of funding both AVC (the scheme I am in, LGPS, offers significant benefits for AVCs) and S&S ISA for availability of capital and insurance if they change the pensions rules in the next 18 years (more than likely).

Each year I can rebalance by putting money from the ISA into the AVC (but not the other way round, I know).

I've done the sums regarding the current S&S ISA/AVC fund and it's doable by putting a bit of cash into the ISA to reflect my profile.

The only question now is of the funds.

Any comments on these would be appreciated;

Schroder Mid 250 24%
Invesco Perp High Income, SL High Income 15%
SL UK Smaller Co's 10%
Schroder European Alpha 16%
Aberdeen Emerging, Allianz BRIC 4%
First State Greater China Growth 10%
Schroder Tokyo 3%
GAM North American Growth 7%
SL Pension Property One Fund 11%

Thanks

EdInvestor

SL Pension Property One Fund 11%

Is this still open to new business?

I would tend to give Invesco Perpetual High Income a bigger position as it is such a consistent top performer.

We haven't mentioned this but I trust you are aware of the way currency risk can wipe out your profits on overseas funds? It's happened again this year with the rise of sterling against the US$.

While I can see the attraction of having some money in emerging markets and perhaps in Asia,excl Japan (never underestimate Japan's ability to disappoint :rolleyes: ) US exposure may be less compelling and easier to obtain in other ways at lower risk, particularly as so many big UK companies are heavily invested there.

Mortgage_&_debt_free

Thanks for the post Ed.

I think the property fund is still available, I guess I'll find out soon enough!

I am umming and aaaing about the US. All I've read suggests the US economy is slowing but on balance I think I'd probably be more comfortable with the smoothing of regular monthly payments than trying to time when to go in and out of the market, but I will give your comment about using a UK fund to access it some thought.

I am aware of the currency risk but am prepared to regard it as part of the overall higher risk of investing in those areas.

Thanks