Sample Portfolio Ideas - Help Required

jabbahut40

Hi,

I have been investing in S&S ISAs for five years with variable results and am looking for some sample portfolios as a good guideline. I saw this one recently on Best Invest (https://select.bestinvest.co.uk/fund-research/select-portfolios/growth-moderate-pound25kplus) and would appreciate thoughts on this one or alternatives. I have £25K invested with Fidelity in 12 funds and am looking to change my portfolio.

Comments welcomed.

Jabba

Totton

Hi Jabba,
Sample portfolios are a good start as is taking a look at the portfolios held by some of the multi-manager funds. Hargreaves Lansdown also publish some samples based on the type of investor - http://www.hl.co.uk/funds/master-portfolios

Holding 27 funds as in the BI portfolio or even the dozen that you have, is imho far too many. With £25k you maybe better looking at 5-7 funds. I look at it this way, a fund is a collection of many assets so if I buy a fund (or Investment Trust) then I want it to have an impact on my portfolio, why do I want to put a small % of my investment into a fund that itself holds perhaps 60-100 holdings.

HTH,
Mickey

jabbahut40

Totton wrote: »

Hi Jabba,
Sample portfolios are a good start as is taking a look at the portfolios held by some of the multi-manager funds. Hargreaves Lansdown also publish some samples based on the type of investor - http://www.hl.co.uk/funds/master-portfolios

Holding 27 funds as in the BI portfolio or even the dozen that you have, is imho far too many. With £25k you maybe better looking at 5-7 funds. I look at it this way, a fund is a collection of many assets so if I buy a fund (or Investment Trust) then I want it to have an impact on my portfolio, why do I want to put a small % of my investment into a fund that itself holds perhaps 60-100 holdings.

HTH,
Mickey

Hi Mickey. Thanks for your feedback. I checked my portfolio online and currently have 11 funds as per below.

* First State Asia Pacific Leaders Acc 17.5%
JPM Natural Resources A Acc 13.6%
Marlborough Special Situations Fund Acc 11.7%
Invesco Perpetual High Income Acc 10.4%
* Schroder US Mid Cap Acc 9.9%
Neptune European Opportunities Acc 9.1%
Gartmore China Opportunities Fund 7.9%
Aberdeen Emerging Markets Acc 7.1%
M&G Global Basics Fund A Acc 5.1%
Neptune Global Equity Fund Acc 4.4%
Jupiter Financial Opportunities Fund 3.5%

I could consider switching these into a smaller number of funds however am currently showing losses on most of these (with the exception of the ones marked with *). Switching now would force me to accept loses so I am currently in a catch 22. i.e. Switch and accept the loses or stick and risk more loses.

Comments welcomed.

Jabba

srcandas

jabbahut40 wrote: »

Switching now would force me to accept loses so I am currently in a catch 22. i.e. Switch and accept the loses or stick and risk more loses.

Jabba sorry to say that your loses are real whether you sell or not. But I doubt whether they are serious at the moment and those losses could quickly be profits when the turnaround comes

However one consideration is the cost of change. If I were you I would only sell the fund investments you have if the reason you bought then has changed or if you have an uncomfortable overload in a specific geographic area, asset type or sector.

But perhaps in the future top them up as opposed to looking at new funds. The fact people think if you were starting out today that you should look at less funds is not the same as advising you to sell what you have

But good luck with it (if for no other reason than I have three from your list ).

BLB53

I have been investing in S&S ISAs for five years with variable results and am looking for some sample portfolios as a good guideline

The biggest drag on returns, in my experience, is charges. I would be looking to move into funds or trusts where ongoing charges (TER) are less than 1%.

Possibly consider a few trackers like Vanguard or Investment Trusts eg City of London, Murray etc.

Moving now should not be detrimental as you will benefit from the upturn more with the new investments - so you are not really crystallising losses, just changing horses, so to speak.

Totton

Hi Jabba,
A mistake often made by us investors is to hold onto an asset that has made a loss, the thought is that we find it easier to sell a winner than a loser so we hold onto the loser until it is a winner and then we sell - probably at just the wrong moment!

Here's how I look at it, if a holding has made a loss but the fundamentals are still correct and my reason for the initial purchase is still correct, then I keep it or even add to it. If the reason etc is no longer valid, then sell for another holding that is likely to gain more than the loser. For example, if Hold a bond fund that is doing little and the market looks promising, then I would sell the bond fund for something else even if it were currently showing a loss.

Looking at your listed holdings, they are all very aggressive and will often track each other up and down. What on earth possessed you to buy such similar holdings? Where you looking at 5-year records and thinking that these just have to do well?

Having said that, those are all decent funds for the aggressive/ growth investor who is willing to accept further losses of say 40% short-term but growth ling term (+5-10 years). If you fir that profile then why not stick with them, in time you'll do very well but you have to be prepared for huge losses in the short term should the US and Europe implode as some are forecasting.

One oddity is your holding of IP High Income amongst all those growth holdings, of course IP High Income is a well respected fund but amongst the other holdings it suggests that you are not really working to a proper asset allocation. You may be of course and that fund may represent a specific idea.

Have you tried putting those holdings into Morningstar? If not then it may be worthwhile creating a free portfolio to get a breakdown of those funds as a portfolio. I did a quick check and got you as 33% Europe (26% UK), 26% US & Americas (16% US, 6% Canada) and 41% Asia

You apparently have a lot of duplicate holdings, particularly with Aberdeen Emerging Mkts and First State Asia but none of them resulted in particularly heavy weightings on a portfolio basis. It may be worthwhile looking at the two Neptune funds to ascertain how much overlap there is there, I thought the Neptune Global; Equity fund was a 'best ideas' from the other funds they run, you may not need both although at one time I was holding the Global Equity, the US and the European funds at the same time, I ditched a long time ago as I used to find that Geffen was good going up but not so good on the downside, that may have changed of course.

Nowadays I tend to reckon that I am not very good at choosing sector specific nor regional specific funds, hence I go for global or thematic funds or Investment Trusts, currently I am 100% IT's but that's not to say there aren't equally good funds out there. For global fund coverage I like(d) Ecclesiastical Amity International but am now using Personal Assets, RIT Capital Partners and etc with a ddgy bet on Caledonia (CLDN) which isn't turning out too well just now :-)

HTH,
Mickey

Totton

srcandas wrote: »

However one consideration is the cost of change. If I were you I would only sell the fund investments you have if the reason you bought then has changed or if you have an uncomfortable overload in a specific geographic area, asset type or sector.

But perhaps in the future top them up as opposed to looking at new funds. The fact people think if you were starting out today that you should look at less funds is not the same as advising you to sell what you have .

I'd agree 100% with that but if you are with a decent fund supermarket then switching funds shouldn't cost you anything.

HTH,
Mickey

gkerr4

this site is worth a look for passive fund investing - very informative.

http://monevator.com/category/investing/passive-investing-investing/

TCA

Totton wrote: »

Have you tried putting those holdings into Morningstar? If not then it may be worthwhile creating a free portfolio to get a breakdown of those funds as a portfolio.

Thanks for the tip.

jabbahut40

srcandas wrote: »

Jabba sorry to say that your loses are real whether you sell or not. But I doubt whether they are serious at the moment and those losses could quickly be profits when the turnaround comes

However one consideration is the cost of change. If I were you I would only sell the fund investments you have if the reason you bought then has changed or if you have an uncomfortable overload in a specific geographic area, asset type or sector.

But good luck with it (if for no other reason than I have three from your list ).

Thanks for your feedback. Surely my loses are real only if I decide to switch or sell? Agree that cost of switching is one consideration. At present my provider charges 0.25% per switch.

Out of interest what three funds do we share??

Jabba

jabbahut40

Totton wrote: »

Hi Jabba,
Looking at your listed holdings, they are all very aggressive and will often track each other up and down. What on earth possessed you to buy such similar holdings? Where you looking at 5-year records and thinking that these just have to do well?

Thanks for your feedback. My rationale for this selection was to maximise growth based on accepting higher risk. Argueablely I have tasken too much risk which is reflected in my selection.

Totton wrote: »

One oddity is your holding of IP High Income amongst all those growth holdings, of course IP High Income is a well respected fund but amongst the other holdings it suggests that you are not really working to a proper asset allocation. You may be of course and that fund may represent a specific idea.

Have you tried putting those holdings into Morningstar? If not then it may be worthwhile creating a free portfolio to get a breakdown of those funds as a portfolio. I did a quick check and got you as 33% Europe (26% UK), 26% US & Americas (16% US, 6% Canada) and 41% Asia

I chose the Invesco Fund to help diversity my portfolio and reduce risk. Agree that I need some help creating a balanced portfolio and will try putting these into MorningStar as you suggest. To be honest I don't have alot of time to be analysing different funds/options and try to do my best with what time I have available. Recent experience over the last few years suggest that my selections are either badly timed or too risky.

Totton wrote: »

You apparently have a lot of duplicate holdings, particularly with Aberdeen Emerging Mkts and First State Asia but none of them resulted in particularly heavy weightings on a portfolio basis. It may be worthwhile looking at the two Neptune funds to ascertain how much overlap there is there, I thought the Neptune Global; Equity fund was a 'best ideas' from the other funds they run, you may not need both although at one time I was holding the Global Equity, the US and the European funds at the same time, I ditched a long time ago as I used to find that Geffen was good going up but not so good on the downside, that may have changed of course.

Nowadays I tend to reckon that I am not very good at choosing sector specific nor regional specific funds, hence I go for global or thematic funds or Investment Trusts, currently I am 100% IT's but that's not to say there aren't equally good funds out there. For global fund coverage I like(d) Ecclesiastical Amity International but am now using Personal Assets, RIT Capital Partners and etc with a ddgy bet on Caledonia (CLDN) which isn't turning out too well just now :-)

Thanks for your feedback. Will take a look at these.

Jabba