10k investment funds portfolio advice needed

dunstonh

suebfg wrote: »

In your position, I would have invested in low cost trackers for UK and US and saved the managed funds for Europe, Asia Pac and Emerging Markets.

I would have also invested in accumulation, not income funds,

Which makes you an unusual investor and not typical of the average UK consumer.

In the OPs position, I probably wouldnt use any investments. A regular contribution really needs 10 years as a minimum, ideally 15. The OP is looking at 5-8 years. So, its possible that the bulk of the money will have less than 5 years invested and its a major lifestyle changing asset that is looking to be bought. So, is there the capacity for losses not impacting on the ability to buy. I may do a little on the initial lump sum and possibly some ad hoc additions in year one but after that I would focus on cash. However, it really depends on how much the impact of a loss would be on the house purchase decision given the short timescale.

Linton

suebfg wrote: »

....

I would have also invested in accumulation, not income funds,

You have confused two different things. When a fund earns dividends they can either be paid direct to you (INC funds) or invested internally (ACC funds). However the OP is talking about "income funds" - ie funds that invest in companies that pay out higher dividends. Income funds can be ACC or INC, its what they invest in which is significant.

Compared with the total market, income funds are rather safer (because higher dividend paying companies tend to be more stable than average) and happen to have been a much more lucrative investment since the crash. Dont rely on the latter continuing for ever!

Income funds is one area where cheap trackers have problems - you need a person to tell whether a share is paying high dividends relative to its price because it is paying high dividends or because the price is low as the company is in financial difficulty. IUKD was a disaster during the crash as it over-invested in the banks as they were high dividend payers. So the payout and the capital value both fell badly.

suebfg

'Which makes you an unusual investor and not typical of the average UK consumer.'

On what basis? at confused.com

dunstonh

suebfg wrote: »

'Which makes you an unusual investor and not typical of the average UK consumer.'

On what basis? at confused.com

The average UK consumer is cautious. They are also inexperienced in investing and not suited to portfolio building. You suggested a high risk solution using funds more suited to experienced investors. I know the OP says he is adventurous but no context on that word has been given. He has said he is inexperienced.

Before anything is recommended, it would be best to know how the OP would feel if the portfolio dropped 40% in the year before he buys the house. Given the very short timescale and the risk being proposed, it is a realistic prospect.

suebfg

OP says 'I'm willing to take a wholly adventurous approach to risk' so I take that at face value - although I agree that it isn't evident from the funds OP has selected.

FWIW, I don't think my approach is high risk - that depends upon the % allocation.

dunstonh

P says 'I'm willing to take a wholly adventurous approach to risk' so I take that at face value

One person's adventurous is another persons cautious.

FWIW, I don't think my approach is high risk - that depends upon the % allocation.

100% equity is high risk. Add in a 5 year timescale (or less as the monthly contributions wont have as long) and it increases the risk.