Portfolio weighting

Ash1982

Hi,

I have the following funds in a S&S ISA:

First State Global Emerging Mkt Leaders Class A Accumulation 80%
M&G Strategic Corporate Bond Accumulation 10%
JPMorgan Natural Resources Accumulation Units 10%

I am looking for capital growth over the next 5 or so years from these funds, I've just started investing recently and I current have the weighting as indicated above. I think I've decided to set up a drip feed regular monthly payments (through H&L) into the M&G (as it is less volitile) and buy chucks of the First State and JPM funds when the price dips as and when.

I'm looking for some advice on possible weightings for my portfolio going forward? I am thinking 40% in M&G (lower risk) and 30% in each of the FS and JPM to add growth.

If anybody has any generic comments on the portfolio and /or suggestions on funds I can add to enhance it they would be very welcome.

I'm looking at getting all the funds up to £1,000 in the next fews months to benefit from the HL savings on the TER and then invest between £500 and £1,000 pcm in line with my weightings and fund perfomance. Any idea how much return I should be aiming for? I'm thinking 10-12% pa. Also, how much I am likely to have at the end of my 5 years?

I know, crystal ball stuff but I keep reading that you need to set targets/goals when investing.

Thanks for reading.

Linton

Ash1982 wrote: »

Hi,

I have the following funds in a S&S ISA:

First State Global Emerging Mkt Leaders Class A Accumulation 80%
M&G Strategic Corporate Bond Accumulation 10%
JPMorgan Natural Resources Accumulation Units 10%

I am looking for capital growth over the next 5 or so years from these funds, I've just started investing recently and I current have the weighting as indicated above. I think I've decided to set up a drip feed regular monthly payments (through H&L) into the M&G (as it is less volitile) and buy chucks of the First State and JPM funds when the price dips as and when.

I'm looking for some advice on possible weightings for my portfolio going forward? I am thinking 40% in M&G (lower risk) and 30% in each of the FS and JPM to add growth.

If anybody has any generic comments on the portfolio and /or suggestions on funds I can add to enhance it they would be very welcome.

I'm looking at getting all the funds up to £1,000 in the next fews months to benefit from the HL savings on the TER and then invest between £500 and £1,000 pcm in line with my weightings and fund perfomance. Any idea how much return I should be aiming for? I'm thinking 10-12% pa. Also, how much I am likely to have at the end of my 5 years?

I know, crystal ball stuff but I keep reading that you need to set targets/goals when investing.

Thanks for reading.

EM and particularly JPMF Nat Res are pretty volatile. 5 years I would say is far too short a time period to be majoring on such sectors. As to your return, in the past 10 years, forgetting about the Bond fund, you could have averaged around 10% per annum, in the past year you could have dropped 15%. So in 5 years who knows. Until the current economic situation settles down prices could go anywhere.

There is little point in aiming for a specific return unless you have a cunning plan to do something about it if the first few years dont work out.

Suggest you aim for a longer time period, perhaps 10 years, or put together a more cautious and wider spread portfolio with a lower target.

Ash1982

Thanks Linton,

Do you have any funds in mind to spread the portfolio? Any suggestions on weightings?

I was thinking up to 10 years, I have just turned 30 and have £6k in easy access cash. I have about £1,000 pcm spare but I am also building up a deposit to buy a bigger house. I guess if I extend my time horizon to 10 years I could invest £500 pcm into funds and save the other £500 in cash.

I think I have a fairly adventurous attutude to risk, I wont invest anything I need (i.e. if the market crashes I will just to sit out until it recovers). You havent lost any money until you sell!

racing_blue

Merriman's ultimate buy and hold portfolio has some good data to back it up. Returned 11.7% per year over 41 years.

I think it is more for the US investor, but has lessons for us in the UK too

http://www.merriman.com/PDFs/UltimateBuyAndHold.pdf

Linton

Ash1982 wrote: »

Thanks Linton,

Do you have any funds in mind to spread the portfolio? Any suggestions on weightings?

I was thinking up to 10 years, I have just turned 30 and have £6k in easy access cash. I have about £1,000 pcm spare but I am also building up a deposit to buy a bigger house. I guess if I extend my time horizon to 10 years I could invest £500 pcm into funds and save the other £500 in cash.

I think I have a fairly adventurous attutude to risk, I wont invest anything I need (i.e. if the market crashes I will just to sit out until it recovers). You havent lost any money until you sell!

I also have a fairly adventurous attitude and invest in various Small Companies , Far East, Technology, and Recovery/Special Situations Funds as well as Nat Res and EM. However, all the money I know I need in the next 5 years at least is in fixed rate deposits and other pretty safe investments.

Ash1982

Thanks for the comments

I've just added GLG Technology Equity Accumulation to my portfolio saving plan. I think I will go for:

GLG Technology Equity Accumulation 20%
First State Global Emerging Mkt Leaders Class A Accumulation 20%
JPMorgan Natural Resources Accumulation Units 20%
M&G Strategic Corporate Bond Accumulation 40%

but I'm looking out for a good property fund? I think 5 funds is diverse enough for year 1, I can review next ISA season!

Totton

At 30yrs of age a 40% bond holding is very conservative, your portfolio goes from one extreme to the other and hints at a lack of direction. Do you want growth or are you looking for a safe place (relatively) to invest? Why a property fund? Do you think commercial property will do well over the next few years or do you think it is a good long term investment, if unsure of the answer then you shouldn't be going into a property fund imho.

For the first year of building the portfolio I would be taking a long look at some of the global growth investment trusts or similar trackers, something to provide a bedrock for the portfolio before going into the more volatile or speculative stuff. I would also be looking at smaller companies, something like Throgmorton or if you want technology then perhaps Herald IT. Another good option is to consider the Vanguard Life Strategy funds, perhaps the 60/40 or 80/20 as 65% of your portfolio to act as a core and then your other stuff to be your speculative satellite to make things interesting.

Best Wishes,
Mickey

Going back to the portfolio, those first three holdings are as has been said, very likely to be volatile, nothing wrong with that at 30yrs of age but trying to balance it with a large bond holding wouldn't calm my nerves :-)

Ash1982

Thanks Totton, I'll have a look at some global growth funds.

I've just added First State Global Property Securities Accumulation to my monthly savings plan too. I do think property (global not UK and europe - over priced) will increase in value over the long term.

So now (taking on board the bond comment) Ive got:

GLG Technology Equity Accumulation 10%
First State Global Emerging Mkt Leaders Class A Accumulation 15%
JPMorgan Natural Resources Accumulation Units 20%
First State Global Property Securities Accumulation 25%
M&G Strategic Corporate Bond Accumulation 30%

I'm looking for capital growth, just thought it prudent to have a bond 'core' to stabalise a bit. What bond holding would be suitable for a say 8 out of 10 risk model?

All help appreciated, note comment on all over the place (the weightings on my first post are screwed to emerging markets as I invested a chunk this week as the price dipped), once I'm set I will stick to it!

innovate

Totton wrote: »

Why a property fund? Do you think commercial property will do well over the next few years or do you think it is a good long term investment, if unsure of the answer then you shouldn't be going into a property fund imho.

One of the best performers in my investment portfolio is a property ETF (iShares Ftse Epra / Nareit US Property Yield (IUSP)) - it's up 23.45% where my FTSE All-World Ex UK tracker (XWXU) has made a measly 1.61% over the last 3 years.

Not sure myself what conclusions to draw from it.

Ash1982

Thanks innovate.

Done some more online research and 30% bonds is way to high. Thinking more like 15% bonds now

fiesta04

This thread is only 3 hours old and I love how your views/choices have changed.

This was exactly how I was not long ago. Decided I am not ready for such decisions yet.

Happy investing.

F4