Hargreaves Lansdowns own recommendations. Your view?

Nine_Lives

What would you guys recommend here.....


I am considering transferring [an amount] (don't ask how much as i don't know yet, but it'd be sub £10k that's for sure) from an old cash ISA into a HL S&S ISA.

I was looking at splitting the figure over 2 or perhaps 3 funds.

I like the Jupiter Merlin my brother is currently invested in (Balanced Acc i think he's got).

I wouldn't want to be eggs in 1 basket (i.e. 2 UK funds for example).

My term is long & my approach is mid risk to the lower end of high risk.



When trying to help select a different fund for him to add, i made a bit of a boob & selected something too similar, or something already covered i think it was (back to the eggs in 1 basket thing again), and this is something i'd want to avoid.

So what'd you recommend based on the info given in this post?

Linton

K_P83 wrote: »

What would you guys recommend here.....


I am considering transferring [an amount] (don't ask how much as i don't know yet, but it'd be sub £10k that's for sure) from an old cash ISA into a HL S&S ISA.

I was looking at splitting the figure over 2 or perhaps 3 funds.

I like the Jupiter Merlin my brother is currently invested in (Balanced Acc i think he's got).

I wouldn't want to be eggs in 1 basket (i.e. 2 UK funds for example).

My term is long & my approach is mid risk to the lower end of high risk.

Not a recommendation just a suggestion....

You put the bulk of your money, say 80%, in one of the Merlin range, perhaps a different one (eg Growth) to your brother to provide a bit of competition. These appear to be very broadly based and so would not really need further diversification. They are much less volatile than say a FTSE based investment yet over the long term covering both good and bad times have provided a reasonable return.

Buy 2 funds, say 10% of your cash each, 1 in perhaps Far East and 1 in another niche market, say Technology, or Small Companies, Mining, or whatever interests you. This will provide you with experience of different types of investment without adding major risk.

Nine_Lives

Thanks for the feedback.

Regarding selecting a fund based on what interests the individual...

I don't do this. I've read others mentioning they refuse to invest in funds due to the nature of them (tobacco for example). I'm not like that. I want to invest in something that will make me maximum money, end of. I know nobody has a crystal ball, but that is all i'm interested in - taking the money i'm investing & getting it to return me as much as it can. That is my interest

gadgetmind

K_P83 wrote: »

Regarding selecting a fund based on what interests the individual...

No, but everyone has their own world view and I guess their investments reflect this.

So what'd you recommend based on the info given in this post?

You have a few practical considerations based around fees and rebalancing. If you go above six funds with £10k, you'll start to struggle to rebalance, and with more than eight you'd be risking one dipping below the £1k limit below which HL don't refund any trail.

The £2pcm per tracker and the 0.5% capped at £45 are going to mean that passives via trackers or ETFs won't out much cheaper than funds.

So, you either need an "all in one" portfolio fund or to try and mix a few funds and a bond fund.

As it happens, despite me being an increasingly passive person, I do have an old HL S&S ISA that's using funds. It's got a few bob more than £10k in it, so I've doubled and tripled up in some sectors, but here's what I hold.

Global general: M&G Global Basics, Rathbone Global Opportunities, JP Morgan Global Equity Income.
EM: First State Global Emerging Market Leaders, Aberdeen Emerging Markets.
Fixed Interest and/or capital preseration: Old Mutual Global Strategic Bond, CF Ruffer Total Return, Troy Trojan.
Europe: CF Ruffer European, Blackrock European Dynamic.
UK Smaller Companies: Liontrust Special Situations, Investec UK Smaller Companies.
Themes: First State Global Listed Infrastructure, First State Global Resources.

If I was to trim this down to a shorter list, I'd go for M&G Global Basics, Old Mutual Global Strategic Bond, Liontrust Special Situations, and First State Global Listed Infrastructure, but I'd then be itching to add more diversity, particularly for more capital preservation and a second global generalist such as Rathbone. (M&G and Rathbone have very different approaches and portfolios.)

Why this list for me? Well, I'm a "call a spade a spade" person, and I like that M&G buy the companies that build the world, and the FS infrastructure fund is the ports, roads and bridges that keep the world moving.

The Old Mutual Bond fund tends to sit in the middle of the pack and slowly creeps ahead over the longer term, which suits me.

I bought the Liontrust fund because I liked the manager's smaller companies with technology/etc moats approach but they then changed tack and started buying blue chip income equities, but they seem to have pulled it off!

So, that was my thinking when much younger and far less knowledgeable of the ways of investing and how to avoid the fees that slowly sap the life from a portfolio. I think it reflects my approach to the basics, but doesn't pander to my own interests. I hope it's useful but it's *not* a recommendation!

Linton

K_P83 wrote: »

Thanks for the feedback.

Regarding selecting a fund based on what interests the individual...

I don't do this. I've read others mentioning they refuse to invest in funds due to the nature of them (tobacco for example). I'm not like that. I want to invest in something that will make me maximum money, end of. I know nobody has a crystal ball, but that is all i'm interested in - taking the money i'm investing & getting it to return me as much as it can. That is my interest

With knowledge and interest comes return. If you work in a particular field, are interested in it, and keep in touch with events you are likely to make better investment decisions in that area than those people with no knowledge.

For example, my background is in IT technology, I understand who the major players are and what they do. So I am happy to invest in that area whereas many investors still have memories of the tech bubble of 10-12 years ago. I know nothing about mining and cannot understand how companies which have never made a profit can be worth £n00M or whatever. So I wont invest in that niche even though it can provide good returns apparently.

So I would say that if you have specialist knowledge, make use of it in your investing.

gadgetmind

Linton wrote: »

For example, my background is in IT technology, I understand who the major players are and what they do. So I am happy to invest in that area whereas many investors still have memories of the tech bubble of 10-12 years ago.

The tech bubble was a bad case of "amateur hour", and people investing in high-risk areas that they knew nothing about. I look for companies with valuable and well-protected technology, high barriers to entry, a proven or credible path to market, and a business model that's seems sane and sensible.

I know nothing about mining and cannot understand how companies which have never made a profit can be worth £n00M or whatever.

I know nothing about diggers and oilies, but have invested (sometimes heavily!) in loss making companies.

margaretclare

I think gadgetmind has explained pretty well what's meant by 'what interests you'.

I am passionate about ecology and therefore, one of the investments I have in my s&s ISA is Jupiter Ecology (global). I also have Kames Ethical Equity (UK all companies) - I'm the person you'd heard of who won't invest in tobacco. I also have M&G Strategic Corporate Bond (sector: GBP Corporate Bond). Artemis Strategic Assets Retail (flexible investment) is one that HL like, and my OH has done pretty well with this one: it's the only one he has in his s&s ISA.

Lindsell Train is a duo of investment managers, Lindsell and Train, who invest in some of the 'big names' in the US. Coca-Cola for example.

What HL suggest on their site for their suggested portfolios would seem to be as good as anyone else is likely to pick for you. Don't forget - if you keep an eye on your s&s nothing is set in stone, you can always switch to another fund if you find you don't like one of them! The one with a long-term view, with 3 different options according to the amounts you want to put in, would seem to be as good as any other.

gadgetmind

margaretclare wrote: »

I'm the person you'd heard of who won't invest in tobacco.

My wife is similar. She'll hold funds that hold fags companies (hard to avoid) but won't hold the shares directly. However, she was fine with BAE Systems, so don't ask me to explain the logic!

margaretclare

gadgetmind wrote: »

My wife is similar. She'll hold funds that hold fags companies (hard to avoid) but won't hold the shares directly. However, she was fine with BAE Systems, so don't ask me to explain the logic!

BAE Systems is a UK company involved in defence. We do need defence, don't we?

I've been challenged similarly about alcohol. I like traditional English pubs. On St George's Day you'll find me dressed in red and white and drinking half a pint of 'real beer'. I support the English wine industry. Tobacco and tobacco products are something else entirely.

gadgetmind

margaretclare wrote: »

BAE Systems is a UK company involved in defence. We do need defence, don't we?

Yes, but arms companies sell world-wide, and maybe some of the buyers don't point the guns quite where we'd like.

I've been challenged similarly about alcohol. I like traditional English pubs.

My wife happily holds Diageo and SABMiller, oh and a glass of wine!