JPMorgan Natural Resources -48% down but still hanging on

gadgetmind

Pensionsaver wrote: »

So you have this platform for your work pension also?

Yes.

Any thoughts on funds that look promising, or ones to avoid?

I use a huge slug of "FL Balanced Index Enhanced Fund of Funds" and add a little Blackrock Global (to dilute UK exposure) and Blackrock EM alongside.

How much 'better' do you think it's possible to do by building a 'bespoke' portfolio rather than choosing one of the defaults?

Unless you're *very* confident of your ability to make the right decisions, go for an all-in-one fund, write your complex password on a piece of paper, and then swallow the paper.

What do you think of the platform itself? Not the most intuitive or user friendly, I've found. And pretty slow.

It's very clunky, devoid of bells and whistles, would be totally unsuitable for a more "retail focussed" platform, but is OK for their typical users.

I've got a SIPP with BestInvest that holds 1/3 of my pension investments and the rest is with FL. I benchmark my fancy footwork on BestInvest against my "invest and forget" on FL and there isn't much in it after a few years.

Pensionsaver_2

gadgetmind


I'm curious that you advise to go with an all-in-one (pre-set) option, but don't do so yourself. Why have you not chosen a pre-set option?


Is your portfolio performing better than the default options?


I'm genuinely curious - trying to figure all this stuff out.

gadgetmind

Pensionsaver wrote: »

I'm curious that you advise to go with an all-in-one (pre-set) option, but don't do so yourself. Why have you not chosen a pre-set option?

I'm an engineer. :-)

I also have a lot of UK holdings elsewhere so wanted to dilute UK (this has worked well) and wanted to add some EM (um, let's move on!).

Is your portfolio performing better than the default options?

To early to tell but I'd have to say "no evidence to date".

cogito

gadgetmind wrote: »

IFAs tend to outsource all of this so you get a portfolio that matches attitude to risk (based on whatever understanding of "risk" you might have!) and your investment timescale. .

My IFA did this and the portfolio put forward included funds like Fidelity Emerging Europe Middle East and Africa, Invesco Perpetual Hong Kong and China and a couple of other funds investing in companies I had never heard of. I might have a good appetite for risk but I honestly don't want to be in a fund which has high volatility and may gain or lose 50% in a short space of time.


I don't have the time or inclination to research individual companies or act on share tips and I am happy to leave this to the fund manager so I regard the manager as the most important choice when selecting where to put my money. Another is whether the manager puts his own money into the fund. This has led me to put money into funds like Fundsmith Equity, Lindsell Train UK Equity and CF Miton Value Opportunities all of which have performed well.


Surely, the most important part of asset allocation is to put money into the best companies in the world no matter where they are located. My funds bear no resemblance to those put forward by my IFA but their overall performance is vastly superior.

masonic

cogito wrote: »

Surely, the most important part of asset allocation is to put money into the best companies in the world no matter where they are located. My funds bear no resemblance to those put forward by my IFA but their overall performance is vastly superior.

That is the opposite of asset allocation. Asset allocation is the process of picking which asset classes, regions and or sectors within which to invest, no matter which companies or underlying securities they contain.

What you are describing is stockpicking. The two are not mutually exclusive, because you can set a target asset allocation for a particular sector and then after that pick what you consider to be the best companies within it. But if you try to pick only the best companies available, then you will tend to find that you will tend not to capture a sufficiently diversified mixture to exercise any meaningful asset allocation decisions.

In general, investors are more likely to positively influence their returns by focusing on their costs and their asset allocation rather than the underlying companies in which they invest.

marathonic

marathonic wrote: »

UK Smaller Companies 10.78% 10.00%
SE BAQ UK Equity 14.98% 15.00%
SE JPM Natural Res 8.30% 10.00%
SE BAQ European 20.85% 20.00%
SE BAQ US 15.08% 15.00%
SE BAQ Pacific Rim 15.03% 15.00%
SE JPM EMERGING MKTS 14.98% 15.00%


I done my annual rebalance of my pension fund today - the original and current allocations can be seen above.

As can be seen, JPM Natural Resources is the only one that really went significantly out of balance - although, at the opposite end of the scale, Europe and UK Smaller Companies did perform well.

I should be back to my original allocation, also shown above, by the start of next week. This will reallocate some of my best performing holdings to JPM Natural Resources at current prices - which, although low, have proven time and time again to be nowhere near a bottom :eek:

This fund lost a lot between the rebalance above and one I did back in January where I had to buy more units to bring it back up from 7.1% of my portfolio to 10%.

It seems the averaging down worked and it's increased to a 13.7% allocation as of today, i.e. it's outperformed the rest of my portfolio by a large margin.

Rather than just drop back to the above allocations, I dropped it back to the 5% it was at a few years ago, increasing my exposure to the US to 20%.

This fund is just too volatile and anything over a 5% allocation, in my current opinion, is just too much - even for a portfolio as long-term as my own.

marathonic

The fund is up massively in recent times - 106% in the past 12 months. Looks like I'd have done better sticking with my original, higher, allocation (albeit, the decision I made to reduce exposure was still the right one).

It's currently my best performing fund out of a selection of seven but I'm not overly confident about 2017. I feel that a lot of the anticipated infrastructure spending in the US is already priced in and if the dollar amount that comes to fruition don't match expectations, commodities could be in for a rough ride.

Jo_Blogs

Has anyone mentioned factoring a stop loss strategy to fund performance?
It is perhaps something that needs some thought when investing in funds within a portfolio.
I set mine @ 10% - Just a thought :-)

Jo_Blogs

cogito wrote: »

Surely, the most important part of asset allocation is to put money into the best companies in the world no matter where they are located. My funds bear no resemblance to those put forward by my IFA but their overall performance is vastly superior.

Exactly

marathonic

Jo_Blogs wrote: »

Has anyone mentioned factoring a stop loss strategy to fund performance?
It is perhaps something that needs some thought when investing in funds within a portfolio.
I set mine @ 10% - Just a thought :-)

I base my decisions on expected long-term performance. For Natural Resources, it's all to do with limited supply, growth in China and imminent US infrastructure spending.

If I expect long-term performance to be good, the last thing I want to do is sell when the fund drops 10%. If anything, I'd be looking at potential increases to my exposure.