What are your favourite funds?

ecdub

Hi all,

I am relatively inexperienced investor. Live in London, and for the most part previously saved in cash before purchasing a property. Am also a matched bettor, so built up funds again in cash, which I use for that.

Have always had some money invested, but never significant regular contributions. Am now in a position to start some medium term investing, with a reasonable amount per month, and I would be interested to hear which funds you guys are invested in as your bread and butter.

Personally, so far I am invested in the Old Mutual Cirillium funds, Fidelity UK Smaller Companies, and Fidelity Special situations. Any suggestions about some funds to add to next and diversify?

Many thanks.

bowlhead99

If you are already invested in Old Mutual Cyrilium funds range you shouldn't need to 'diversify'. The whole idea of those portfolios is that they invest your money across a range of other fund managers for you, depending on your goals (i.e. whether you want the Dynamic one or the Strategic Income one or Moderate one etc).

You are paying two layers of fees - i.e. to the tens of underlying fund managers across the various specialist areas, and to OM themselves for running the product. Having paid them for doing all that work it then seems a bit funny to go and add a 'special situations' fund on the side and another smaller companies one and then go and look for more. Do you even know what you are invested in at the moment?

We all have different funds as our bread and butter. Some people prefer the taste of different types of bread and different ratios of salted or unsalted butter to bread. Some knock it down with some water, others with wine.

So there isn't really much point us listing all the different funds that are out there for different purposes. You can get that list from a typical funds platform. Some platforms list a 'fund of the month' or 'popular funds' or 'model portfolios' that they want to encourage you to invest in for one reason or another.

Why not look at the underlying funds that your Cyrilium fund(s) are invested in and decide what it is that you like and dislike about each of them. Then come back here and see if there is something you dislike, maybe someone can suggest their preferred fund in that sector.

FWIW some of the underlying fund holdings in Cyrilium Moderate and Dynamic are things I hold myself. I don't use that product though.

ecdub

Let me ask the question of a slightly different way then...

If I wasn't invested in the cirillium funds, where would people suggest starting their investing. I can't say I have strong reasons for being in that fund.

george4064

I suggest you do some reading, learn about diversified portfolio asset allocations and build your portfolio from there.

ecdub

I see.

Thanks all.

bowlhead99

If you are going to get yourself a balanced investment portfolio there are different ways to do it.

1) You probably need 8-12 funds minimum to cover the major asset classes and sectors in your preferred proportions, which you can then monitor and rebalance from time to time.

2) Or, you buy one or two multi-asset funds where a fund manager decides what the proportions should be and buys and sells between the asset classes so that you don't really have to do much because you just sit there and hold the one or two funds and they invest directly into the assets.

3) Or you buy one or two fund-of-funds like Cyrilium where the fund manager decides what funds and fund managers he should invest with for different sectors and your money gets deployed into those managers' individual funds on your behalf without you needing to do much monitoring; you just get a periodic report from Cyrilium saying what the market is currently doing and how your money is deployed - much like you would get from (2) with a multi-asset fund that invests directly itself.

Medium term means different things to different people. Depending on your timescale (2 years, 5 years, 15 years, retirement) you would typically invest in different types of funds. If you are drip-feeding money over the next five years out of your spare salary, you will end up with five years of money put away but the average pound will have only been invested for about 2.5 years. Depending on your appetite for risk, the funds you might select in that situation would be quite different to the funds you might use if you were the sort of person for whom 'medium term' meant 20 years and 'long term' meant up to your deathbed at age 95.

ecdub wrote: »

Let me ask the question of a slightly different way then...

If I wasn't invested in the cirillium funds, where would people suggest starting their investing. I can't say I have strong reasons for being in that fund.

I would agree with george that you should go and do some basic research on investment allocations because there is no point just investing haphazardly into things you read about on a forum. We have seen this from countless other members time after time.

For example, aside from the Cyrilium funds, the other funds you told us about are quite specialist UK funds. If you wanted to invest in 15 other specialist funds to 'round out' your portfolio across industry sectors and international geographies and asset classes, we could perhaps list 15 funds which might do the job, to come up with a 17-fund portfolio which had a decent shape to it. Maybe we would steal the list from Cyrilium.

You would then think that you didn't like everything on the list, and would just pick your favourite-sounding one or two funds from the 15 because you think you only have enough money to be adding two more funds to the existing portfolio this month. So then you would have a portfolio with four specialist funds which is still a crappy portfolio because it is missing the other 13 funds that we had suggested to make it into a reasonable one.

In such a case you would probably be better ripping up what you have at the moment and starting again (whether simply: with one or two multi-asset funds, or more complicatedly: with ten, more specialist, ones), rather than trying to incrementally 'fix' holes in your portfolio one month at a time.

At the end of the day if you are looking at a £10k or £20k portfolio you do not need to overcomplicate things with hyper-specialist funds. Pretty much any broad multi-asset fund will be fine. At bigger amounts the allocations make more difference. If you have £100k then one or two multi-asset funds would still be fine but it is at the level where allocation can make quite a difference and so it is worth spending more time on your due diligence to make sure you're really happy with the allocation.

While you are doing your research, stick with whatever simple multi-asset fund you like the look of. Get rid of the two UK funds and put the money in the most suitable Cyrilium one for your needs. Then when you have finished your research and know what it is that you actually want and why, move into that new solution.

ecdub

Appreciate that reply bowlhead - I definitely need to re-read a few times, and take make sure I am taking that all in - but very useful. I have a lump sum I want to invest, which I will partly do in to Cirillium, and drip feed the rest

enthusiasticsaver

I only invest in one multi asset fund Vanguard life strategy 60. I researched a number of different funds before dipping my toe into investing last year but more experienced investors than me pointed out spreading across different funds would change the balance of the portfolio and from a charging point of view it would be cheaper to stick with one which matched my risk appetite. I put in a lump sum last April and am drip feeding £500 per month.

AlanP_2

Have a look at Asset Allocation on monevator.com as a starting point then start following links and read through some of the other articles on there.

Its easy to ask "what should I invest in" or "what do you invest in" but at the end of the day we all have different amounts, different time scales, different objectives and different situations.