Sound start to S&S investing ?

asarmstrong

Evening,

First post on here, I've been following the forums for a while, and about time i jumped in.

Looking to build up a ISA pot for later on in life and looking for some advice / critique of funds selected and strategy.

So far, have built up £9k in ISA over the last 12 months.

I currently have the following funds, based on a mixture of passive trackers (2/3) and actively managed (1/3).

11% Legal & general pacific index i trust acc
6% Vanguard Emerging Markets Stock Index Fund.
11% Hsbc american index c fund acc
12% Hsbc european index c fund acc
6% Blackrock japan equity tracker d fund acc
15% Vanguard ftse uk equity income index fund acc
6% Blackrock Mid Cap UK Equity Tracker D
6% Marlborough uk micro-cap growth
6% Rathbone global opportunities i fund acc
6% Schroder european smaller companies z fund acc
6% Artemis global income i fund acc
6% M&g optimal income i fund acc
6% Legal & general uk property feeder i fund acc

I'm looking to now drip feed in £250 - £500 per month across the portfolio - focusing on the funds which have dropped in value as i'm in for the long haul as i do not plan to need this money for 15 years plus.

Chosen not to go for a Lifestrategy or Concensus as i enjoy researching the different funds, geographical areas and sectors, as believe this will be beneficial later on when i have larger values to invest.

I'm contributing maximum amount to company pension, am higher rate tax payer, 34 years old, 45% equity on £125k home (looking to re-mortgage next year to buy new house with partner) and then keep current property as buy-to-let.

Consider Frontier, US mid's, and looking into ETF's and perhaps commodities after some more research.

Any comments appreciated

Thanks
Andrew

masonic

Well there are some obvious deviations from the norm in terms of your trackers (e.g. you are underweight to the USA and all of your UK large cap exposure is high yield), but presumably that's deliberate?)

With £9k invested, I think it would be difficult to add more funds to the 13 you already have. The portfolio already looks to be spread a bit thinly.

You didn't mention which platform you were using. ETFs carry trading charges, so unless you can trade them cheaply, they will not be cost effective for small investments.

Linton

I dont have any real objections to this portfolio - its not too different to the sort of thing I do myself.

Perhaps its a little light in the more exciting opportunities around with only Marlborough Micro-Cap really in that category. Possibly Rathbone global opportunities is a little out of place in that you are going to great efforts to allocate your investments as you wish and then you put in a fund which can invest in anything anywhere. I dont think I would go for trackers in the Pacific and EM regions - you should check that the industry and country allocation is really what you want. Perhaps the income funds could be more focussed. However these are minor arguable quibbles.

Of course having that number of funds in what is still a pretty small portfolio is OTT, but as you enjoy the extra effort, why not. Valuable from an educational point of view even if it doesnt make much financial difference at this stage.

In_For_A_Penny_2

I admire your efforts. I'm very much a passive investor - exclusively in VLS fund. I find it very hard to find the time to do the necessary research and find the array of sources of "information" somewhat intimidating.

I'd be interested in what resources you used and how you decided on your selection of funds?

badger09

In_For_A_Penny wrote: »

I admire your efforts. I'm very much a passive investor - exclusively in VLS fund. I find it very hard to find the time to do the necessary research and find the array of sources of "information" somewhat intimidating.

I'd be interested in what resources you used and how you decided on your selection of funds?

Me too

Kendall80

Interesting to see how others are going about this.


I'm just getting started myself and am the same age with a similar time horizon as the OP.


I have chosen to go with just 5 funds at the start;


Vanguard FTSE dev world ex UK acc (which is heavily US weighted)
Fidelity emerging markets acc
Vanguard Global small-cap acc
Vanguard FTSE UK acc
Vanguard UK Gov bonds acc


I'll consider increasing Europe and Pacific/Japan splits when I get some decent amounts flowing into it.


Have to say I'm a little frustrated at how slowly things are going right now. I have to wait over 2 weeks for my first drip-feed to go in. I realise that's neither here nor there considering this is a long term investment but i'm eager to set the ball rolling.

TrustyOven

Kendall80 wrote: »

Have to say I'm a little frustrated at how slowly things are going right now. I have to wait over 2 weeks for my first drip-feed to go in. I realise that's neither here nor there considering this is a long term investment but i'm eager to set the ball rolling.

I had the same experience, took something in the region of 3 weeks to start with the drip feed on the platform I use. In the end I just did a small lump sum investment to get things started before the direct debits etc were set-up for the drip feed.

asarmstrong

Thanks for reply's and comments - appreciated.

I'm using Charles Stanley Direct so will look into ETF's and their charges / benefits to see if worthwhile in the future.

I agree that 13 funds can be OTT, but i think that i'm almost there with the fund selection now - just maybe switch out from large cap to more adventurous opportunities. Just need to consider and agree on % for each fund.

Purposefully gone for some high income funds as although i don't mind risk and portfolio dropping by 40% (in short term - great buying opportunity!) i'm hoping that these high income funds will help make things a little more stable.

Thanks for the Pacific / EM Tracker comments Linton - will consider and look into further. I don't mind paying a management charge it clear benefits and i guess this is likely to be the case with these markets if I choose correctly.

asarmstrong

Thanks In For a Penny, guess that i've very much went in on the basis that if the funds go down in the next few years then hopefully they will increase in the long term and i will learn from the experience!

Read the normal books, Smarter Investing, Naked trader etc, and then just a stack of articles and websites. I'm currently working away from home so have plenty of time to have a look around, plus being an accountant i'm generally interested in this sort of thing.

I would rather be in the market (even if it means short term pain) so i can learn on what drives and influences the markets - so i will be more educated when have more cash to invest in the years to come. Perhaps i may have jumped in at the wrong time - but time will only tell.

Biggest mistake i've made is not keeping sufficient cash emergency funds, so this def needs to be addressed over the coming months

Not applied any technical reasoning behind fund purchases so far, but will def be looking at CAPE etc in more detail when tweaking the % allocation.

kidmugsy

asarmstrong wrote: »

So far, have built up £9k in ISA over the last 12 months.

I'm looking to now drip feed in £250 - £500 per month across the portfolio - focusing on the funds which have dropped in value as i'm in for the long haul as i do not plan to need this money for 15 years plus.

I'm contributing maximum amount to company pension, am higher rate tax payer, 34 years old, 45% equity on £125k home (looking to re-mortgage next year to buy new house with partner) and then keep current property as buy-to-let.

You want to invest long term. You pay higher rate tax. Why not make a pension contribution to a SIPP?

Thrugelmir

asarmstrong wrote: »

Purposefully gone for some high income funds as although i don't mind risk and portfolio dropping by 40% (in short term - great buying opportunity!) i'm hoping that these high income funds will help make things a little more stable.

High yields aren't a magical source of income. Yields are high because the underlying shares pose above average risk, low growth , dividend cuts, or simply that the Company is distributing it's own capital back to shareholders.