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What to do when you're bored of trackers

edited 31 January 2017 at 11:48AM in Savings & Investments
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El_TorroEl_Torro Forumite
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edited 31 January 2017 at 11:48AM in Savings & Investments
I'm about to pay a lump sum into my pension, and am at a bit of a loss on where to invest it. I'm going to rebalance what I already have, though am planning to put the majority of the lump sum somewhere new.

My current portfolio, with the percentage of what I have in each fund:

Legal & General US Index Class C Acc - 24.17%
Legal & General UK Index Class C Acc - 3.87%
BlackRock Continental Euro Equity Tracker Class H Acc - 8.35%
BlackRock Pacific ex Japan Equity Tracker Class H Acc - 5.7%
BlackRock Japan Equity Tracker Class H Acc - 5.53%
Templeton Africa - 2.23%
Aberdeen Latin American Equity Class I Acc - 2.92%
FL MyM Mercer Growth / Balanced Risk - 33.5%

Vanguard LifeStrategy 60% Equity - 13.73%

The Vanguard LS 60% is my ISA, the rest is all in pensions. The idea of the VLS is that it's relatively low risk, so I can cash some of it in if I need to. I've been slowly building this fund up for years.

The only fund that I regularly pay into is the FL MyM Mercer Growth / Balanced Risk, which is where my salary sacrifice pension goes into each month. I'm happy to just let this fund grow for now. Once it makes up about 50% of my portfolio I might transfer some of it elsewhere.

So on to my question. The lump sum that I'll be adding to my pension will be about 5% of my total portfolio. What should I do with it? Some of my thoughts:

I'm tempted to just lump it into a VLS 80%, see how it compares to the tracker funds I already have. This is a bit of a boring option though.

Small companies - UK or global. Since most of my money is in trackers my portfolio is skewed towards large companies. I'm not sure if this type of diversification is a benefit though?

Gold / precious metals / mining - Highly volatile, which in itself doesn't scare me too much, though I'm not convinced that this will be a better return over the long term than what I already have.

An Ethical fund - Might help me sleep at night, though might hurt my returns, and I'm not sure that investing my money in companies like Vodafone will actually help make the world a better place.

Any comments / things I haven't thought of welcome.


It's going to be at least 20 years before I retire by the way, so I'm looking at the long term.
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Replies

  • LintonLinton Forumite
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    Small companies are worthwhile as they are less globally correlated and in general have performed better than large companies over many years, particularly in the UK. Ideally I believe one should have separate SC funds in each major area as they should benefit by local knowledge. However there may not be room for a reasonable holding of each in your portfolio so a global SC fund may be the only choice.

    I like raw materials funds (rather than pure gold) as they have a comparatively low correlation with other funds. And they provide a bit of "fun".

    With funds anything less than 5% is arguably not worth holding as even if it does well it will make little difference to your overall performance. So you could reasonably merge the Africa and Latin America funds into Frontier Markets.
  • El_TorroEl_Torro Forumite
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    Linton wrote: »
    Small companies are worthwhile as they are less globally correlated and in general have performed better than large companies over many years, particularly in the UK. Ideally I believe one should have separate SC funds in each major area as they should benefit by local knowledge. However there may not be room for a reasonable holding of each in your portfolio so a global SC fund may be the only choice.

    This looks like the most tempting option at the moment. The two funds which look good are:

    Standard Life Inv Global Smaller Companies Class S Acc
    Vanguard Global Small-Cap Index Acc

    I won't put the full lump sum in there if I go down this route, I'll add a bit to my other trackers and put about half of it in the Small Caps Global fund.
    Linton wrote: »
    I like raw materials funds (rather than pure gold) as they have a comparatively low correlation with other funds. And they provide a bit of "fun".

    Can you name some examples? I can't find any on HL (the platform I use).
  • LintonLinton Forumite
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    For raw materials the ones I have held are:
    JPM Natural Resources
    Investec Enhanced Natiural Resources.
    And then there is Blackrock Gold and General, but it's OTT in gold for my taste.

    These and other more interesting funds live in the Specialist sector on Trustnet.
  • armchaireconomistarmchaireconomist Forumite
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    buy gold, emerging markets & subprime bonds.
  • EdGasketEdGasket
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    Another vote for gold. If you want a leveraged play, go for SPGP (gold miners etf) else SGLN for pure gold.
  • Ray_Singh-BlueRay_Singh-Blue Forumite
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    You are bored of trackers- are you bored of all collective investments? Could you add a few individual companies?

    (Or... embrace the boredom...)
  • dunstonhdunstonh Forumite
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    Investing is a means to an end. If you want fun then do something that is fun and leave the investments alone. Dont try and make the investments fun.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • BananaRepublicBananaRepublic Forumite
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    buy gold, emerging markets & subprime bonds.

    I am assuming this is humour, the point being that the OP requires excitement? I'll stick to a quiet life thanks. :)
  • joujoujoujou Forumite
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    Good investments are boring.

    Dump the lot in the lifestrategy 80% (or 100%) then go find a hobby to relieve the boredom.
  • Voyager2002Voyager2002 Forumite
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    buy gold, emerging markets & subprime bonds.

    ... but in very small quantities, just for fun.
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