Sanity Check

JohnRo

TCA wrote: »

..I'm looking at doing something similar to you.

Good points, I'm not going to get too paranoid about regional allocations, I just want a reasonably well balanced, broad spread really, as long as the vast majority of it is at very low cost.

My take on equities is that the world is increasingly becoming a global marketplace and it seems a great many equity indices within developed or emerging regions are similarly if not quite equally affected, over the longer term, by financial events. As long as I have most bases covered I'm not going to fret about regional allocations to the 'enth degree. It isn't a set in stone proposition anyway, i'll be monitoring, learning and adjusting as it goes along. At some point in the future I'll take a punt on the odd specialist market if prices look particularly attractive, most likely via ETF, but that can wait for now.

TCA wrote: »

What makes me nervous now is making large lump sum investments in all these areas but that's what I'll have coming over the next while,

I feel that pain, my ISA transfer can take up to six weeks according to BestInvest (honestly, what's that all about?) so I'm expecting a catastrophic market crash the day before the transfer takes place and a most spectacular rally just before the wreckage lands in the new account.

JohnRo

Here's a list of the funds I've purchased to date that will make up the foundations of the tracker portfolio for those interested. The amount allocated this week is £100 into each just to lay down a marker and get things started. Still waiting for the ISA transfer to complete but I can now start looking at prices to gauge whether next and each months purchase will have a reasonable chance of maintaining or lowering my average cost.


Portfolio - BestInvest Select

1. Vanguard FTSE U.K. Equity Index Fund Inc. 0.15% TER
2. Vanguard FTSE Developed Europe ex-U.K. Equity Index Fund Inc. 0.25% TER
3. Vanguard U.S. Equity Index Fund Inc. 0.20% TER
4. Vanguard Japan Stock Index Fund Inc. 0.30% TER
5. Vanguard Pacific ex-Japan Stock Index Fund Inc. 0.30% TER
6. Vanguard Global Small-Cap Index Fund Inc. 0.40% TER
7. Vanguard Emerging Markets Stock Index Fund Inc. 0.55% TER
8. Vanguard UK Investment Grade Bond Index Inc. GBP 0.20% TER
9. Vanguard Global Bond Index Fund Inc. 0.25% TER
10. Blackrock Global Property Securities Equity Tracker Acc. 0.55% TER

Unfortunately BestInvest don't currently have the Blackrock property tracker available in income units which is the one I would have preferred given a choice. Have enquired but they say their legal requirements can take them months to register and make a new fund available for purchase.

Also still looking for decent commodity trackers, if only the synthetic ETF selection was matched with physical funds. I'm aware it's an incredibly complex sector for investment purposes though.

grey_gym_sock

JohnRo wrote: »

Also still looking for decent commodity trackers

not finding 1 might be a lucky escape

saveonarola

JohnRo wrote: »

Blackrock Global Property Securities Equity Tracker Acc. 0.55% TER

Woo-hoo! At the start of this year, I bothered Bestinvest for a while, hoping they would add this fund to their Select platform. Nothing seemed to be happening, so eventually I gave up, but it appears they were listening. Or maybe it's just a coincidence. Either way, I'm happy. And even better - it appears to be the 0.55% TER units, rather than the 0.88% TER units (which is what HL, the only other broker I found with this fund, were offering last time I checked). Woo-hoo!

EDIT: Have checked the fund TERs. Bestinvest website was wrong. Fund TER is 0.71% with both HL and Bestinvest.

saveonarola

saveonarola wrote: »

And even better - it appears to be the 0.55% TER units, rather than the 0.88% TER units (which is what HL, the only other broker I found with this fund, were offering last time I checked).

Don't want to give out-of-date information, so just checked this with HL and was quoted a TER of 0.71%. So, as far as I can tell, both HL and Bestinvest offer the 'A' class units of this fund, which have an AMC of 0.55%; but HL quotes a TER of 0.71% and Bestinvest quotes a TER of 0.55%. Can anyone explain why two brokers would have a different TER for the same units of the same fund? Also, why does Bestinvest quote a 'spread' of 0.28%? Does this have anything to do with the lower TER?

EDIT: Have checked the fund TERs. Bestinvest website was wrong. Fund TER is 0.71% with both HL and Bestinvest.

saveonarola

Sorry if my posts above are a bit off-topic. I'm going to post my query about the BlackRock fund in a new thread.

sabretoothtigger

JamesU wrote: »

Pacific ex Japan index is there too....65% Australia, heavy on financial sector, usually around 10% BLT diggger.....awkward and strange index really.

JamesU

The best index i know is the pacific trackers. I bought near the peak of 2008 and they made me alot of money, they done fine and I think probably continue to do so barring a worldwide depression which is not true today or likely

Compare pacific to ftse and they great. Australia mostly feeds China and others with commodities I believe so you should worry about their customers more then the source exactly
The biggest shares are often iron ore miners but BHP has oil and gas too, I dont see any of this as massively risky.

Developed Equity 40%
UK 5%
Euro 10%
US 10%
Japan 5%
Pacific ex Japan 5%
Global small cap 5%

Emerging Equity 30%
Global emerging 30%

Bond Markets 30%
Global high yield 20%
Global Government 10%

Specialist Markets 0% postponed
Property 5%
Commodities 5%

I always say this but its too western based. You live in the west, you get all your income depending on our continued success?
UK relys heavily on USA for stability and trade, you dont need to be doubling down on political risk

Bonds are my biggest holding but I hold none that promises to pay western currency 5 or 10 years from now. If you are a wage earner, you already hold these promises in your job contract.
Nobody has to agree with me but in terms of risk management, all these bonds are not a good idea

Mostly because we have too many promises being thrown around in the name of liquidity, bail outs and doing the 'right thing' - basically its politics.
Where as investment implies reliance on productive growth not hope and electoral rhetoric

JamesU

saveonarola wrote: »

Don't want to give out-of-date information, so just checked this with HL and was quoted a TER of 0.71%. So, as far as I can tell, both HL and Bestinvest offer the 'A' class units of this fund, which have an AMC of 0.55%; but HL quotes a TER of 0.71% and Bestinvest quotes a TER of 0.55%. Can anyone explain why two brokers would have a different TER for the same units of the same fund? Also, why does Bestinvest quote a 'spread' of 0.28%? Does this have anything to do with the lower TER?

HL's website does state 0.55% for the fund AMC too (and Blackrock specify this for the class A units on this fund), but in addition HL says % ter/"ongoing charges" at 0.71%. Best to simply ask HL what the extra 0.16% charges are for if you decide to buy from them?

On this thread, for any Blackrock class A fund purchase, seems normal for BestInvest to quote a spread (0.28%) because this Blackrock fund is a UT index fund (with a bid/offer spread for the unit) as opposed to an OEIC index fund (usually a single price for the share). So probably nothing to do with the variation in charges between the two providers.

JamesU

TCA

JohnRo wrote: »

Also still looking for decent commodity trackers, if only the synthetic ETF selection was matched with physical funds. I'm aware it's an incredibly complex sector for investment purposes though.

This isn't a recommendation, but have you checked these out below, as listed on Monevator a couple of years back?

Lyxor ETF Commodities CRB (LCTY) TER 0.35%
ETFS All Commodities £ DJ-UBSCI ETC (AGCP) TER 0.49%

JohnRo

I'll bookmark these, I have read about these funds and commodities in general on a similar thread on here (and elsewhere).

At the moment the dealing costs for ETFs rule them out, for the type of investment I'm doing. There may come a time when the volume I'm trading justifies the purchase and sale costs but for now they're off limits.

I must confess the idea of actively dealing ETFs as constituents within a more structured portfolio certainly does appeal, but I estimate the chunks required to make the trades worthwhile would be in the order of £10K each time.

Selling on moderate gains and holding long term for income on the falls. I just don't have enough cash wrapped in an ISA to make that sort of trading efficient.