Advice rebalancing portfolio

pt1188

Alexland wrote: »

So you are going from a position of massively overweight in UK to a deliberate non UK bias? Seems like a yo-yo going on.

Not quite. I did mention that I have 10 Vanguard funds, which includes 5 that have a UK bias, including LS40-80 funds. I will not be switching these. What I am looking to switch out of are the 28 other varied funds that have accumulated over time and are with active fund managers. Most of these too have a UK bias, hence the 50+% of UK equities and the under representation of US equities. This is what I am really looking to re-balance.

I have looked at the Vanguard Global all Cap and it appears to be similar to the HSBC global strategy Balanced fund that I have recently bought so I will probably switch out the many old funds into a combination of either one of these plus a good measure of VLS 20 to slightly increase my bond holdings, as suggested by bostonerimus

Thanks all for your comments - it has been really helpful.

Thrugelmir

Alexland wrote: »

Even if the UK recovers from this Brexit situation then it's still not clear if the currency will recover of if we will have suffered permanent inflation.

The ECB is concerned over the strength of the €. There's two sides to every coin.

bostonerimus

pt1188 wrote: »

Not quite. I did mention that I have 10 Vanguard funds, which includes 5 that have a UK bias, including LS40-80 funds. I will not be switching these. What I am looking to switch out of are the 28 other varied funds that have accumulated over time and are with active fund managers. Most of these too have a UK bias, hence the 50+% of UK equities and the under representation of US equities. This is what I am really looking to re-balance.

I have looked at the Vanguard Global all Cap and it appears to be similar to the HSBC global strategy Balanced fund that I have recently bought so I will probably switch out the many old funds into a combination of either one of these plus a good measure of VLS 20 to slightly increase my bond holdings, as suggested by bostonerimus

Thanks all for your comments - it has been really helpful.

I think you should come up with an asset allocation you like and then produce that with a reasonable number of funds so you can track your investments sensibly. Right now you have a large accumulation of funds probably bought for reasonable tactical reasons at the time, but without regard to strategy. Personally, I use just 3 trackers for 90% of my money so maybe you could think about getting down into the fund single digits.

bigadaj

Thrugelmir wrote: »

The ECB is concerned over the strength of the €. There's two sides to every coin.

Part of the story of the last decade has been a competition to devalue currency by all major economies, that is almost as much a factor as trying to inflate debt away and giving away free money to try and kick start economies and avoid a Japanese style lack of growth.

The strength of the euro is a huge problem for virtually all euros one economies, the Germans are strong enough to ride it out but the pigs and many others will continue to struggle.

greatkingrat

pt1188 wrote: »

Not quite. I did mention that I have 10 Vanguard funds, which includes 5 that have a UK bias, including LS40-80 funds. I will not be switching these. What I am looking to switch out of are the 28 other varied funds that have accumulated over time and are with active fund managers. Most of these too have a UK bias, hence the 50+% of UK equities and the under representation of US equities. This is what I am really looking to re-balance.

I have looked at the Vanguard Global all Cap and it appears to be similar to the HSBC global strategy Balanced fund that I have recently bought so I will probably switch out the many old funds into a combination of either one of these plus a good measure of VLS 20 to slightly increase my bond holdings, as suggested by bostonerimus

Thanks all for your comments - it has been really helpful.

There is no reason to hold 10 different Vanguard funds which are all overlapping each other. I think you need to forget what you hold already and start again from scratch. First decide on the overall equity / bond percentage you are comfortable with, then if you want some degree of home bias or not, and only then start looking at which funds match your target allocation.

pt1188

bostonerimus wrote: »

I think you should come up with an asset allocation you like and then produce that with a reasonable number of funds so you can track your investments sensibly. Right now you have a large accumulation of funds probably bought for reasonable tactical reasons at the time, but without regard to strategy. Personally, I use just 3 trackers for 90% of my money so maybe you could think about getting down into the fund single digits.

At the risk of sounding too forward would you mind telling me the three funds you hold. It seems that's probably the way forward for me. I'm a great fan of Lars Kroijer and in fact he advocates just two finds - a global equities tracker and a bond tracker fund in proportion to your risk profile, so I should really bite the bullet and start streamlining.

ColdIron

pt1188 wrote: »

At the risk of sounding too forward would you mind telling me the three funds you hold

Don't worry, he's not backward about coming forward on that question

A_T

bostonerimus wrote: »

VLSxx is UK overweighted in equities, so that's why I'd use Global All Cap for the majority of the equities and add a bit of VLS20 for the fixed income. The only reason I'd use VLS20 rather than the Global Bond Index is to avoid the entry charge. I think you need to seriously reduce the number of funds you own and there are obviously an infinite set of possible solutions, but 60% Global All Cap and 40% VLS20 would give you a diversified 68% equities and 32% bonds

Or if you wanted to reduce charges you could go with HSBC FTSE All World Index C with an ongoing charge of 0.20% compared to the Vanguard All Cap's charge of 0.24%.

bostonerimus

ColdIron wrote: »

Don't worry, he's not backward about coming forward on that question

Indeed.

My allocation is probably not good for the UK as I live in the USA; I'm also 56 and have been retired for 4 years. In marketable investments I have approximately 50% Vanguard Total US Stock Market, 25% Vanguard Total International Stock, and 25% Vanguard Total Bond Market. I also have a deferred annuity paying 4.75% interest that I started back in 1987 that I plan to pass on to my heirs, a defined benefit pension and a rental property. I will get state pensions from both the US and the UK. Given my diverse sources of retirement income I'm ok with 75% equities in the rest of my portfolio.

I like the simplicity of a "Vanguard/Bogle/Kroijer" approach and if I was in the UK I would probably use a global equity tracker and a global bond tracker.

bostonerimus

A_T wrote: »

Or if you wanted to reduce charges you could go with HSBC FTSE All World Index C with an ongoing charge of 0.20% compared to the Vanguard All Cap's charge of 0.24%.

Good point, go with the cheapest tracker/platform combo you can find.