Portfolio Help

to-me-to-you

Hey i have just started aadding a few funds to my portfolio for this year would appreciate any feedback.

Currently;
VG Lifestrategy 80% equity income £1000
Lindsell Train Global equity income £1000
Barclays £450

Looking to add possibly jupiter India acc as I feel that long term India is a good bet, and is currently down.

I know this is a very high risk portfolio currently but I have time on my side as i am only 25 and don’t need to touch the money as i have substantial cash savings.

Cheers guys and go easy:)

Linton

to-me-to-you wrote: »

Hey i have just started aadding a few funds to my portfolio for this year would appreciate any feedback.

Currently;
VG Lifestrategy 80% equity income £1000
Lindsell Train Global equity income £1000
Barclays £450

Looking to add possibly jupiter India acc as I feel that long term India is a good bet, and is currently down.

I know this is a very high risk portfolio currently but I have time on my side as i am only 25 and don’t need to touch the money as i have substantial cash savings.

Cheers guys and go easy:)

Some thoughts...

1) This doesnt look a very high risk portfolio to me, more medium. With large cash savings you could reasonably go riskier.

2) If you consider the Vanguard fund as a core, I dont see what the Lindsell Train fund gives you. It will be investing in similar things to the equity part of the Vanguard.

3) Adding India to your current portfolio seems going from one extreme to the other - choosing one specific country is very high risk. Suggest you keep a broader perspective. Typical investments to increase risk could be global emerging markets, Far East, Smaller companies, perhaps technology or raw materials.

4) I would consider putting more into the Vanguard fund until it was say £5K and then move over to riskier investments.

to-me-to-you

Thanks Linton, forgot to say that I have it in an ISA wrapper with HL, so will only put in £5640 this year. I would have probably put a £1000 in to Jupiter, then drip fed more in to Vanguard. I hear what you are saying about Lindsell but a bit late now to change lol.

Would like to look in to raw materials and maybe technology but it is just knowing where to start as there are way too many to choose from.


I do have large cash savings but mainly for a house deposit, so I see it as a bit riskier, maybe I am wrong on that.

sorcerer

Normally is most areas you will find a few goods fund/trust/etfs that are better than others. For technology for example i like GLG and Axa Fram. Global tech.

Totton

I'd consider the portfolio as high risk rather than medium as you have more than 80% in equities but once you add in your cash holding then the risk is lowered of course. There's nothing wrong with going high risk imho, the purpose of stock market investment should be outperformance so you need that risk in order to try and best deposit rates etc.

I agree with Linton though, the purpose of using the VG fund is to hold it as a core, therefore unless you consider the LT fund to be an equal core holding why hold it? Most likely you are duplicating alot of holdings within those two funds.

Adding single country funds is not for the faint hearted, Japan has been a long time tip from various professionals including the highly rated Jupiter fund of fund team. Personally I stay away from single country funds and am only tempted by Russia, if you are confident with Japan then go for it but prepare to be let down as most experts have been for several years. if going for Japan then why not look for a tracker, ETF or fund with a larger than average weighting and then use that fund as either part of your core or add it as a satellite holding, I think Ruffer IT has a high conviction to Japan and may be worth a look.

I'd also increase the VG holding, perhaps to 65% and then add your conviction holdings around that, my one reluctance is perhaps VG UK have yet to prove themselves, hence I actually prefer Investment Trusts as my core whilst I keep a watchful eye on VG.

HTH,
Mickey

Porcupine

T'other thing is that HL will charge you a platform fee of £24 a year for holding a Vanguard tracker, on top of the 0.24% TER. The Lindsell fund has a TER of 1.5% but no platform fee. So, on £1000 you'll pay £26.40 for VG and £15 for Lindsell. VG will get percentage-wise cheaper as you put more in, Lindsell won't.

So one way to play this is to pick a fund without a platform fee while you have a small holding, and then switch to a cheaper fund later once it's built up - that's more than about £2000 in this case.

Edit: I see you've already invested. In which case you have to balance the loss of the VG initial fee (0.24%, or £2.40) against the higher ongoing fees.

srcandas

Not sure I understand this suggestion that duplicated funds are bad. For example I have three Asia funds each with roughly 4% Samsung. If I amalgamated the three into one I would still have 4% in Samsung!

However by having three funds I have a wider spread of the smaller investments. And if one has an unusual bit of good luck I can take profit (although in the case of the OPs two funds unlikely) . It all depends on your strategy. :beer:

ps. One difference is that VG LS is heavily financials weighted, Lindsell is not

to-me-to-you

Thanks for all the feedback, I want to keep the VG as I am currently very much a passive investor and would like this to be my core holding, hence why i have added another £500 while it is down, and will continue to do so.

When you put it like that porcupine it does sound like I am paying a lot for the two funds as srcandas says there is still a slight difference in the two funds however I am not sure it is worth the extra cost? However would it not cost this much for any funds I put in, 1.5%TER seems about average?

If I were to get rid of Lindsell, am I best waiting until the value is back to my initial £1000 or cut losses? Can’t remember if HL charge to sell as well, will have to look.

bowlhead99

to-me-to-you wrote: »

When you put it like that porcupine it does sound like I am paying a lot for the two funds as srcandas says there is still a slight difference in the two funds however I am not sure it is worth the extra cost? However would it not cost this much for any funds I put in, 1.5%TER seems about average?

At the moment there's a slight difference between the funds but this will get bigger as the amounts get bigger. If those TERs are correct, Lindsell costs £15 TER per extra £1,000 added while Vanguard costs the flat platform fee of £2 a month (which you're already paying) plus only £2.40 TER per extra £1,000 added. So if you took £1,000 of Lindsell money and added it into the VG pot, you'd save £15 of Lindsell TER and only pay £2.40 of extra Vanguard TER.

If I were to get rid of Lindsell, am I best waiting until the value is back to my initial £1000 or cut losses? Can’t remember if HL charge to sell as well, will have to look.

1) What you originally paid for Lindsell is irrelevant. For simplicity let's say that movements in global share prices have caused it to fall to £800. You'd like to see the £800 pot of money grow to £1000. This is 25% growth. The question is, will you get the 25% growth more reliably from an investment in Lindsell or from your replacement investment (in more VG?).

Presumably the answer is, "from the replacement investment" which is the reason you are selling in the first place.

This might be different if the investment was one share of one particular company, which had been heavily sold in the market and you felt it was due a rebound or there was some good news coming. But in this case, your Lindsell investment is in a whole basket of loads of global shares and the only way it will go up to £1,000 is if the global markets improve. If they do, the VG would also go up so there is no special reason to hold Lindsell to £1,000 before moving it.

As a side note, one school of thought says that VG is more likely to get to £1000 (or £2000, or £10000) faster because by picking an average of all other managers (ie global tracker) it's only charging £2.40 a year in fees while Lindsell charges six times that, and this becomes expensive over time. The other says that Lindsell will get there first because it more actively manages the portfolio and hopes to outperform the other managers to the extent that the extra five management fees are covered. As Scrandas points out, it has less in financials for example. May be good or bad depending on where financials go in the next few years versus whatever alternative basket they put their eggs into.

Only by waiting to see what happens will you know whether VG or Lindsell was really the best place to be, but this doesn't mean you should hold both, as that logic would have you invested in 1000 global funds instead of just one or two.

2)Whether or not HL charge to sell, you'll pay it (or not) regardless of whether you sell this month or some future month, so doesn't come into your decision.

grey_gym_sock

the TER on VG LS 80% is 0.32%, not 0.24%.

so if you moved £1000 from Lindsell to VG, you'd pay £3.20 per year, instead of £15 per year, i.e. £11.80 less.

it's fair enough to ask the cost of switching, too. HL don't charge for selling (or buying) funds. the only switching cost is VG's 0.24% dilution levy (which HL show as an inital charge), i.e. £2.40 per £1000. so this is small compared to the on-going saving (assuming you're investing for years).

to-me-to-you

Thanks for the info think you have convinced me to switch my money from Lindsell to VG, may wait until a drop first. It has got me thinking whether or not HL is the cheapest place to keep it all, but can’t find an easy way to compare?

I do have an account with SVS for some shares that i was not able to hold in an ISA wrapper but as far as I am aware they don’t do VG. Is there an easy way to work out if it is cheaper to switch platform anywhere or could someone recommend?