My portfolio

MrWizard

Hello,

I'm quite new to this and currently have the following structure.

1. HSBC American Index - 4%
2. Vanguard LifeStrategy 100% - 21%
3. BlackRock Pacific ex Japan Equity Tracker - 15%
4. BlackRock Global Property Securities - 6%
5. Cash (Current Accounts, Interest) - 55%

Total cost - 0.72%

It's just my feeling being completely new to this. I am using Vanguard LifeStrategy as a global fund. I wanted more US exposure so added the American Index fund. I don't want to have anymore weighting in Europe and the UK due to Brexit so I focused on having more weighting in Pacific. I also wanted something not an equity. Something a bit more niche, and I believe investing in natural resources that will run out e.g. gold, fuel, etc.is a little too risky, so property was chosen.

It's kind of trial and error. It's based on my opinions/research. Open to the idea of selling and swapping around if I find after a few years certain funds are not working.

Any comments? :cool:

bigadaj

MrWizard wrote: »

Hello,

I'm quite new to this and currently have the following structure.

1. HSBC American Index - 4%
2. Vanguard LifeStrategy 100% - 21%
3. BlackRock Pacific ex Japan Equity Tracker - 15%
4. BlackRock Global Property Securities - 6%
5. Cash (Current Accounts, Interest) - 55%

Total cost - 0.72%

It's just my feeling being completely new to this. I am using Vanguard LifeStrategy as a global fund. I wanted more US exposure so added the American Index fund. I don't want to have anymore weighting in Europe and the UK due to Brexit so I focused on having more weighting in Pacific. I also wanted something not an equity. Something a bit more niche, and I believe investing in natural resources that will run out e.g. gold, fuel, etc.is a little too risky, so property was chosen.

It's kind of trial and error. It's based on my opinions/research. Open to the idea of selling and swapping around if I find after a few years certain funds are not working.

Any comments? :cool:

If you're not keen on the uk then lifestrategy probably isn't the best fund, it's proportionally over weight in uk shares.

You're obviously very heavily in cash, whether this be a conscious decision or simply a function of small amounts, so this will have a dominant effect on returns, which are likely to be limited in the near future.

It might be worth you looking into p2p for some money, there are a few threads here and the p2p independent forum is a good resource too.

badger09

john2054 wrote: »

I would recommend a trust fund asset management firm such as irwin mitchell asset managment, who i use. They pay me about 4% a year. And i would much rather have professionals do it, then do it myself. You may save on the overheads, but it would be easier to lose money imho. Do you want me to get you their number?

You've made similar posts on several threads recently, recommending Irwin Mitchell Asset Management.

Care to explain the reason for this:cool:?

john2054

That's because they are who i use.

TCA

john2054 wrote: »

That's because they are who i use.

Out of interest, what do they have your money invested in?

economic

bigadaj wrote: »

If you're not keen on the uk then lifestrategy probably isn't the best fund, it's proportionally over weight in uk shares.

You're obviously very heavily in cash, whether this be a conscious decision or simply a function of small amounts, so this will have a dominant effect on returns, which are likely to be limited in the near future.

It might be worth you looking into p2p for some money, there are a few threads here and the p2p independent forum is a good resource too.

the uk exposure - much of it would be ftse100 which have significant earnings overseas so is not a good indicator of uk economy. so i think its fine having that much exposure to uk as you actually are not exposed to uk.

john2054

I'm not sure, they send me a quarterly report, but i can't say i remember any of the funds. They are all uk based i think, and no properties. That's all i know. Some cash, some stocks some bonds, some dividends, that's about it.

bigadaj

john2054 wrote: »

I'm not sure, they send me a quarterly report, but i can't say i remember any of the funds. They are all uk based i think, and no properties. That's all i know. Some cash, some stocks some bonds, some dividends, that's about it.

So a moderately high risk level then, you can't currently get that rate of return without your capital being at risk.

It's a little worrying you don't know what your adviser is doing and then recommending them, you really should ask them to explain the structure, asset allocation, your risk profiling and the relationship of what is invested in to have some understanding.

bigadaj

economic wrote: »

the uk exposure - much of it would be ftse100 which have significant earnings overseas so is not a good indicator of uk economy. so i think its fine having that much exposure to uk as you actually are not exposed to uk.

Ftse100 has performed very poorly and isn't structured in a way that many people would be positive about, the vast majority of values being concentrated in banks, miningoil, pharmaceuticals for example.

The OP stated that they were bearish on uk and Europe, so it's a little illogical to allocate three times the weighting to the uk even if many of those earnings are made overseas.

A straight world index fund would see, to fulfil the OPs requirement better.

john2054

as i said already, we get quite a lot from dividends. I understand it when they tell me, but it isn't any of your business anyway.

sorry if i sound rude, but please mind your own business. i don't see why i should have to reveal all the secrets of my investment portfolio, to every to !!!! and rival on the internet. Lots of people see these posts you do realise?

there there

bowlhead99

john2054 wrote: »

it isn't any of your business anyway.

sorry if i sound rude, but please mind your own business. i don't see why i should have to reveal all the secrets of my investment portfolio, to every to !!!! and rival on the internet. Lots of people see these posts you do realise?

there there

John your posting style is quite strange.

The OP was looking for comment / advice on the composition of his portfolio. Your reply was that you use an asset manager so don't know what you hold. When questioned, you said you do get statements, but don't remember what the holdings are. When questioned further, you mentioned you get a decent amount of income from it but didn't want to 'reveal the secrets' of the portfolio because, didn't we realise lots of people can see the posts.

So, how does that help the OP?

Ah well, maybe he gets a kick out of the entertainment provided

MrWizard wrote: »

I'm quite new to this and currently have the following structure...

It's just my feeling being completely new to this...

...Any comments

Ignoring for a moment the cash and the shares in property companies let's just look at the 40% of your portfolio which is in generalist (not industry-specific) global equities.

You bought an off-the shelf portfolio from Vanguard which you could have put all your money into for the 40%, instead of using the separate funds 1(4%); 2(21%); 3 (15%) in your list above. Let's say your total holdings excluding the cash and property equities, this 40% of your investible wealth, represents £4000.

Using that Vanguard global equities fund for the whole piece, you'd have (about):

UK Equities.........£ 996 (~25%)
European ex-UK .£ 485 (~12%)
North American ..£1788 (~45%)
Japan ...............£ 280 (~7%)
Asia ex-Japan.....£ 160 (~4%)
Emerging Mkts...£288 (~7%)

You looked at that and based on your personal convictions decided to scale back the allocation that the professional asset managers gave you out of the box to only £2100 out of the £4000 and then separately buy £400 US and £1500 Asia ex-Japan.

So now you have:
UK ............... was £ 996 now £ 522 (13%)
N America..... was £1788 now £1341 (33.5%)
Europe exUK.. was £ 484 now £ 254 (6.4%)
Japan........... was £ 280 now £ 147 (3.7%)
Asia exJapan.. was £ 160 now £1584 (39.6%)
Emerging....... was £ 288 now £ 151 (3.8%)
Total............. was £4000 now £4000

If we compare against your objectives:

"I wanted more US exposure"

- well, now you've actually got less than if you'd just used the Vanguard fund for the whole 40% instead of scaling it back to 21% and adding a dedicated bit of US and a lot of Asia.

"I focused on having more in Pacific"

- damn right you did, you've now got literally ten times as much as a professional asset manager such as Vanguard would have given you in their popular multi-asset fund. Developed Asia ex-Japan is basically Australia, Korea, HK, Taiwan with 15-20% in the other smaller countries such as Singapore, Malaysia and Thailand. Given those countries' small share of global GDP and global free float stockmarket capitalisation it seems pretty ballsy to make it 40% of your entire generalist shares portfolio when Vanguard were only going to give you 4%.

Meanwhile, Japan (the country with the second largest stockmarket in the world after the USA) and Emerging Markets (having half the world's population and typically the fastest growing economies) are each relegated to under 4% of the £4000 holdings?

Even if you are right with your conviction to only have about a tenth of your money invested in your own country's stockmarket, the mix is pretty strange and the attempt to get 'more US exposure' in that part of your portfolio (not that Vanguard's 45% in North America is terribly low anyway) hasn't actually worked.

Then on your other objective:

"I wanted something not an equity ... so property was chosen"

Except what you did was to buy a fund that exclusively buys the equities of companies, they just all happen to be companies that try to make money from property. That's quite different to wanting "not an equity". You've bough is a huge pile of equities in one specialist industry sector - and when market sentiment moves against equities in general, that fund can easily drop 40-50%+ at the exact same time.

It's kind of trial and error. It's based on my opinions/ research.

I can see that it's trial and error because it seems unfocused and doesn't seem to achieve some of the things you were setting out to achieve. It's also strongly based on your opinions but I wonder how much 'research' has gone into it. If you are investing £5-£10k rather than £50-£100k I guess it doesn't really matter too much because it will still make money over the long term. But if that's the case I would have been more inclined to just buy a generalist mixed-asset fund at a risk level that suits you.

If you *really* hate the amount of UK equities they give you in a mixed asset fund at your chosen level of risk you can de-emphasise the UK by buying a world ex-UK equities fund to boost the non-UK equities, although then you'd have too much equity so would have to pull it back by adding non-equity funds, and then you still end up with needing to monitor and rebalance from time to time... so buying an out of the box portfolio and manually adjusting it based on 'opinions / research' can be relatively hard work for someone who is inexperienced and doesn't have much time to put in quality research.

Open to the idea of selling and swapping around if I find after a few years certain funds are not working.

There is no way that any of those funds won't be 'working'. They all say up front exactly what they are going to do. You know the developed Asia ex-Japan tracker is simply tracking an index. The US fund is simply tracking an index. The Vanguard fund holds funds which follow indexes. The property equities fund holds shares in a large number of property companies in a variety of developed countries, generally weighted to the larger ones as per an index of REITs and similar entities. Generally, all the funds you selected will do what they say on the tin and track the markets up and down because there is no real active management work being done by anyone (other than Vanguard rebalancing the UK vs non-UK in your Lifestrategy fund to keep it at around 25% of that fund).

So, any of the performance you get can't be a surprise. Barring huge calamity or fraud at one of the two fund management groups you selected, the portfolio will 'work'. When you're using funds where the manager doesn't really have discretion and is simply slavishly following an index which you have picked by picking that fund, you are not going to get a result that's materially different from what you should expect, because the fund managers are not going off and making surprising or unexpected decisions.

So basically you are taking responsibility for building a portfolio based on opinion and research, rather than buying one off the shelf, and need to ensure that the range of outcomes are something you are happy with. When there is a market crash and your (e.g.) £4000 of generalist international equities halves in value (or more than halves given the disproportionate allocation to some specific regions), and your (e.g.) £600 of property company equities also halves in value at the same time, you will be out a good chunk of value.

Deciding that you will then 'sell and swap around' because it's not working, and then promptly missing the recovery in the markets that tanked because you no longer have as much exposure to them, is the way to lose your shirt.

Good luck with it all.