Current Portfolio - any glaring problems ?

cisamcgu

Dear All,

I have been slowly ploughing money into my S&S ISA (held by the nice people at HL).

To put it into some context: I am 50, have a DB Pension merrily growing (:j) and around £20K in cash and £5K in premium bonds. My S&S ISA has a value of around £25K as follows :

Stock Holding%
BP Plc Ordinary US$0.25 1.1%
Hargreaves Lansdown plc Ordinary 0.4p 2.1%
HSBC American Index Class C - Accumulation (GBP) 14.0%
HSBC European Index Class C - Accumulation (GBP) 14.3%
HSBC FTSE 250 Index Class S - Accumulation (GBP) 12.9%
Oxford Biomedica plc Ordinary 1p 1.5%
Oxford Instruments plc Ordinary 5p Shares 1.6 %
Vanguard LifeStrategy 60% Equity Accumulation (GBP) 54.1%
Totals 100.0%


I am only drip feeding into the Vanguard now, the other funds were my original choices and I stopped feeding them about 6 months ago and also moved the "profit" from them into the Vanguard at the same time.

I hold the individual shares for a bit of 'fun' - the BP shares so I can get a dividend (albeit tiny), the Oxford Biomedica just in case they discover something brilliant, the Oxford Instruments because I like the idea of owning part of a company that makes cool things , and I am not sure why I bought the HL shares :rotfl:

Anyways, this is just to see if anyone has comments, good or bad, about this very simple portfolio and also, do people buy small bits of shares just for enjoyment (I know dealing costs will play a huge part in such tiny purchases) ?

Andrew

dunstonh

The VLS60 is a multi-asset fund. Why have you chosen to break the researched asset allocation selected by Vanguard by having the HSBC funds?

What research or actuarial calculations have you carried out that makes you believe your asset allocation is better than Vanguards?

cisamcgu

Dunstonh, thank you for replying, I appreciate it

The HSBC funds are a "hangover" from my initial choices. I no longer add to them, only to the Vanguard. I did have a Gilts fund too, but I moved all of that into the Vanguard about 6 months ago - my thinking being that the 40% of bonds in the Vanguard was enough and I had no need to have more. I am loathed to do the same to the HSBC funds and sell those into the Vanguard at the moment - it is a combination of inertia and wishful thinking perhaps ?

Over time the % in the HSBC funds will naturally decrease.

Linton

I see 2 key sectors under represented: Far East (ex Japan) and Japan. There seems no point in holding a US tracker alongside the VLS 60. That fund is already 27% x 60% US trackers. You would be better off in my view selling it and putting the money into your VLS 60, perhaps converting that to a VLS 80.

I like the FTSE250 tracker both because it adds some spice and adds to the UK allocation in the VLS fund. Perhaps your fun share money could be more usefully spent in a higher risk fund - EM outside the Far East, perhaps Technology, may be global small companies.

Kendall80

I'd say the small components arent worth having. 1-2% is not going to make a significant difference whichever way they move.


Your FTSE 250 tracker aside, the others could probably be sold and the proceeds put into the VLS 60% if as you say their existence is not allocation related. In my own opinion, the FTSE 250 is one index its worth allocating extra to for a more UK based exposure. Although my notes/plans include an active fund instead - Neptune UK Mid-Cap.


Asia is also under-represented.

george4064

I think what you have is fine, as dunstonh has already mentioned you will have some overlap with the HSBC index funds and the Vanguard LS 60%.


If this was my portfolio, I would;


- Sell the entire Vanguard LS and buy a mixture ETFs
- Sell all the HSBC index funds, and buy a mixture of investment trusts


The above changes would also reduce your HL charges for holding all your investments in your ISA from £114.30 per annum to £45 per annum, this fee would also be fixed so as your investments grow (hopefully!) you will still only pay £45 p.a.

cisamcgu

Thank you for the thoughts - it is very interesting to hear other peoples ideas.

Linton - I certainly hadn't considered converting to a VLS80, but I suppose my cash holdings and DB pension are very much like bonds/gilts anyway - so maybe I could decrease the bond %

George4064 - I am not sure about EFTs and ITs - I think some reading may be in order

Regarding the tiny pot of individual shares, these are just to give me something to look at during lunchtime at work

Sam_J12

I don't see a lot wrong with it. A bit of a home bias perhaps, especially since the VG fund is already home biased I believe. I would probably have more in the US market to better reflect global capitalisation and historic over performance relative to the rest of the world, but that is often just down to personal preference and bias.

You might like to consider the equity balance in your portfolio and how you plan to reduce this over time - you are currently around 80/20 but will want to reduce this as you approach retirement age. You probably want to do this in a structured way - perhaps have a read up on it.

cisamcgu

Sam - I think I do have a lot of US already and the balance is offset to quite an extent by my cash and pension holding - I think ?

AlanP_2

cisamcgu wrote: »

Sam - I think I do have a lot of US already and the balance is offset to quite an extent by my cash and pension holding - I think ?

I treat my DB pension as the equivalent of the "safer" Bonds in simple terms and have a high equity %'age in the SIPP.

You are using a S&S ISA so may not be planning on using this to fund retirement but if it is for retirement it may be worth moving some / all across into a pension wrapper for the tax benefits at some stage?

I would say sooner rather than later if you are a HR taxpayer and later rather than sooner if you are a BR taxpayer as changes to pension tax relief arrangements are being considered and may be announced later this month / March 2016.

cisamcgu

AlanP - I have a defined benefit pension and will soon start filling some in-house AVCs too. So, although the S&S ISA is something of a retirement fund it is be no means the most important part of my pension provision.

I understand that the AVCs cannot be accessed until I also start to draw my DB pension (LGPS rules); I wouldn't want to access them anyway due to tax implications (I think )