21y/o graduate - thoughts on my investment portfolio?

thbtheo

Hello — I'd appreciate some advice from others on my investment portfolio, if you'd be so kind!

I am 21 and have been investing for a couple of years now. So far I have sought to approach this (at least in part) as a learning experience so I've made a fair few changes and switches up to this point, but I'm approaching the stage now where my conference and knowledge have grown and I'd like to shore up my portfolio for the long run. I'd say my risk attitude is broadly cautious to moderate, and my investment aim is to watch these holdings grow steadily.

For context: I will be starting a graduate job in September on a good salary, and renting for a couple of years or so before hopefully looking at buying a house. Pension arrangements with this company are good, and I plan to take full advantage of them.

I currently have just under £5,000 invested across the following funds:

Vanguard FTSE Developed World Ex-UK - 34%
Woodford Equity Income - 27%
Vanguard UK Inflation-Linked Gilt Index - 10%
Vanguard UK Government Bond Index - 10%
Baillie Gifford Global Discovery - 10%
BlackRock Emerging Markets Tracker - 9%

Total returns on this have been about +10% over the past 12-18 months.

I also have about £4,000 saved, split between a Cash ISA (1.3%) and a Help to Buy ISA (2%) [held with Nationwide so I can pay into both of them] and about £1,000 in LLOY and ARM shares.

Any thoughts appreciated!

Bazofts_Revenge

I actually like the mix of funds you have selected the last two seem a little adventurous for the risk category you claim to want to take but you are young and have time for those to work for you. Are those funds held in ISAs? I really think they should be and you could try and add to each with regular purchases each month to maintain the current percentages.

Good luck.

atush

I would think, if buying is a possibility, and you are using the employers pension, that I would split your savings into cash and a S&S isa.

With the emphasis on cash until you are getting close to what you would need for a deposit, 50/50 thereafter.

Jake0307

19% in discovery/emerging markets is a safe percentage for a cautious-moderate risk attitude, imo.

If I were you I would set myself a savings goal every month, so every payday you agree that you will send a % of it straight to savings automatically. What this % will be is of course up to you, but I used this method and I soon found myself saving a decent amount (able to buy myself a decent 2nd hand car + insurance within 9/10 months of working a part time job during my degree, purely by sending 20% of my wage to savings every payday).

Gadfium

Whats the cost of holding all those separate funds, both in monetary terms and in time spent managing them?
is it really worth 1.52% (plus platform charges) to hold £500 in the Baillie fund?
Given the small size of the pot and the time that you are likely to hold it for I would think that minimizing charges would give as much, if not more return over the period that you are going to be invested.
A single globally diversified multi-asset fund might be cheaper in the long term and easier to manage.

Well done for making a start though. I wish that I had started at 21!!!

Linton

I like what you are doing. Your investments seem sensibly diversified. It could well be argued that the number of funds is well over the top for what is at the moment a small amount of money. However at this stage in your investing career gaining experience of a variety of investments could well be more valuable than worrying about this.

thbtheo

Thanks for all your thoughts so far! Seems like I'm on the right path, I just need to keep slowly building it up.

Bazofts_Revenge wrote: »

Are those funds held in ISAs? I really think they should be and you could try and add to each with regular purchases each month to maintain the current percentages.

Yep, all held in a S&S ISA with Charles Stanley Direct. I'm certainly hoping to keep adding; if not every month then every few months at least.

atush wrote: »

I would think, if buying is a possibility, and you are using the employers pension, that I would split your savings into cash and a S&S isa. With the emphasis on cash until you are getting close to what you would need for a deposit, 50/50 thereafter.

I'm very conscious of maintaining a good cash balance at this point in my life, and once I start work I'll focus on getting that dreaded deposit together! :wall:

Jake0307 wrote: »

If I were you I would set myself a savings goal every month, so every payday you agree that you will send a % of it straight to savings automatically

That's the plan!

Gadfium wrote: »

Whats the cost of holding all those separate funds, both in monetary terms and in time spent managing them?
is it really worth 1.52% (plus platform charges) to hold £500 in the Baillie fund?

The total cost of the portfolio is 0.38% + 0.25% CSD platform charge, which I think is reasonable on the whole? I quite enjoy the time I spend managing it all at the moment, but I'm aware that may rapidly slip down my list of priorities once I start work! That's why I'm hoping to establish a good structure now which will require less work going forward.

The version of the Baillie Gifford fund I hold (B) actually has an OCF of 0.77%. It's still my costliest holding, though. Would you suggest a cheaper alternative?

Gadfium

For the small amount involved I would be tempted to bung it all into a LifeStrategy or similar on the cheapest possible platform.

Having said that, you are learning doing it your way and you may be getting more enjoyment from that process than the monetary gains. For me, I want "fire and forget"

Dird

Why are so many people saying bung it all in 1 fund -_- there shouldn't be a difference in approach between small/big amounts of money since smaller ones will be using % based platforms anyway (no loading charges)

Linton

The reason for putting a small sum into one fund rather than many is that the difference in absolute returns would probably be very small and not worth the extra effort of managing multiple funds. Also, depending on the provider and fund there may be fixed costs involved in buying/selling. Having one fund minimises these.

However the relatively small extra effort and possible cost of multiple funds may well be worthwhile if a major purpose of the portfolio is education or fun, which at the moment would seem to be the case.

Dird

What extra effort? Pick % rates then pay accordingly.
No need to spend time rebalancing as long term they should take care of themselves (e.g. if 1 fund drops 10% so you overpay to maintain its ratio, the next week it might decide to rally & now you've wrecked the ratio again by overpaying that one)