£48k share inheritance

[Deleted User]

Hi,

I have just received £48k in shares as inheritance. It is a collection of shares which is being split amongst 5. There are about 25 constituents to the portfolio and I am wondering whether to keep all as they are or sell and buy one low cost tracker fund. I currently have this years ISA all in VLS80 and have maxed out the high interest current accounts. Any thoughts would be appreciated. Screenshot of breakdown attached.

colsten

If the shares are to be split amongst 5 people, I can't see how you (assuming you are the executor) can do anything but sell the entire holding and give each 1/5th of the proceeds to do with as they please.

[Deleted User]

The other 4 all want to keep the amount in share form and have it transferred to whoever they currently have shares with.

I am not the executor, a solicitor is organising it.

colsten

For that to work - if it can work at all - you'd have to divvy up the holdings for the re-registration to start with.

POPPYOSCAR

colsten wrote: »

If the shares are to be split amongst 5 people, I can't see how you (assuming you are the executor) can do anything but sell the entire holding and give each 1/5th of the proceeds to do with as they please.

Why?


When our mother died we all received share certificates as part of the estate.

colsten

May be they got better at it but about 10 years ago it was a huge confusion that we in the end overcame by selling the lot and then dividing the cash.

redux

Some firms charge up to £25 per stock for in specie transfers

I suppose they might find themselves quite willing to split these holdings into 5 and transfer, if they decide they could charge £125 per holding.

bowlhead99

To go back to your actual question... if you wouldn't have put that collection of shares and funds together yourself, and someone gives it you, the most sensible thing to do is to sell it and invest it how you would have invested £48k when starting from scratch.

The current mix was put together to meet someone else's goals and objectives and not your own, and was held in larger quantities (relatively cheaper to hold per share when the total number is 5x larger).

I hold some of the holdings on the list but whether *we* would like the portfolio is neither here nor there. It's not a portfolio you would have made for yourself, so forget it. And ask the solicitor if they would be willing to liquidate your shares and distribute the resulting cash to you instead of doing a transfer of each holding - may be more efficient for you personally or for the estate.

One final point is when you say "buy a low cost tracker" I assume you mean another multi-asset fund that utilises trackers, rather than literally something that tracks a single index. The portfolio in its current form has exposure to a range of geographies and asset classes.

[Deleted User]

Thankyou for your answer. I definitely want to keep it invested in something and was considering asking for the money and then putting all of that into Vanguard lifestrategy 80 acc which I already hold as a way of minimising fees whilst getting decent exposure. My concern was whether it would be unwise to hold only vls80 and have ~60k in there. Could you shine any light on how risky vls80 is compared to the above portfolio?

bowlhead99

Olivier811 wrote: »

My concern was whether it would be unwise to hold only vls80 and have ~60k in there. Could you shine any light on how risky vls80 is compared to the above portfolio?

VLS80 is a fund that invests in other funds so that the result of holding the fund is actually the result of it holding about 10 underlying funds which invest in the largest shares in different countries and various types of company and government bonds in different countries. If it was unwise to 'hold only one fund' when that fund actually held ten funds and those ten fund held debt and equity investments in 4000 companies and governments, then the model is broken.

So the short answer is that you can put a million pounds in VLS and have it be your whole portfolio if you like. Probably most people with a million pounds portfolio would hold something else alongside VLS but that is because they have decided that it provides general coverage but does not meet their needs for one reason or another. So whether to have it as your whole portfolio depends whether what you want is the result of VLS or the result of something else.

If I wanted to work out roughly how your portfolio was allocated I would first have to find out how much was invested in what. For example, national grid shares are £9.37 each and you have 210 of them. So that's about £2k of value. Dr Pepper shares are $90 each and you have 40 of them and a dollar is 0.7 pounds. So that's about £2.5k of value. By investing some time I could see how your £48k was actually allocated between companies and funds and then I could go and research the investment strategies, performance history and volatility of all the funds and get a feel for what that money is actually invested in. Which is quite an exercise.

Without bothering to waste time on that exercise, the headline is that just those two companies I picked at random would be worth about £4.5k between them which is a tenth of a £48k portfolio. Do you think having a tenth of your portfolio focussed in just those two companies out of the ten thousand investment opportunities on the planet, is going to give you nice stable returns? What happens if Dr Pepper goes bust? Do you mind losing 5% of your value forever?

If you instead held a global tracker, Dr Pepper would be 0.06% of the equities fund, and if your fund was only 80% equities anyway then Dr Pepper would be about 0.05% of the portfolio. So, you have perhaps one hundred times as much invested into Dr Pepper as a £48k Vanguard portfolio would hold. The Vanguard fund is heavily weighted to the largest companies on the planet and not suitable for everyone's objectives, but 'heavily weighted' is a relative term because the top 5 holdings will be less than 5% of the portfolio between them and there are thousands of holdings altogether.

You have not done any research into the assets, business models and profitability of the individual companies in the portfolio you listed, it is just the result of what someone else ended up with after investing for a number of years and is unlikely to be suitable for your purposes. Dump it and start again, investing in what you understand.

Some of the funds in your portfolio are perfectly decent, I don't know them all but hold some of them and have looked at others of them. But without someone getting all the prices I don't know how much money you have in the strategic bond fund or the real estate funds or the asian equities fund etc etc. Maybe the funds are 60% of the portfolio or maybe they are 20% of the portfolio. What I can confidently say is that after throwing out all the individual company shares which you don't know anything about and do not have the time or inclination to constantly monitor and review, it will take a load of effort to tinker and play with the proportions of all the funds which remain, and buy new funds to 'fill the gaps'.

Forget it, turn the portfolio into cash, and then go and make a £48k investment in a portfolio that you understand. Whether that's a single multi-asset fund with the characteristics you want, or a bunch of individual specialist funds which you have to monitor and periodically rebalance.