Great British Invest off or Passive V Active Portfolios

Linton

Currency does matter as the £/$ rate will change. If the us portfolio is up 11% but the £ increases by 11% during the period a U.K. investor holding the same funds will register a 0% rise.

Linton

TBC15 wrote: »

Hi Linton

Is this in addition to your growth Portfolio?

I have put in 2 portfolios to compare portfolios with different objectives

bostonerimus

Linton wrote: »

Currency does matter as the £/$ rate will change. If the us portfolio is up 11% but the £ increases by 11% during the period a U.K. investor holding the same funds will register a 0% rise.

What I was getting at was that I'm buying, holding and selling in dollars. Currency fluctuations will be baked into the portfolio for cross border holdings, but I'm not going to convert from dollars to pounds when I have a US based portfolio. I'll report percentage returns.

Ray_Singh-Blue

I have 5 years of data. It will probably put me at or near the bottom of the class, but hey, that’s why I am here, to learn.

In 2012, my rag bag of shares, index funds, commodity ETFs and cash returned +1.3% compared with a benchmark +9.5% for VLS60
In 2013, I got a return of -1.7% compared with VLS60 +1.3%
For 2014, can’t lay my hands on the precise figure, but just about broke even while VLS60 returned +9.5%.
In 2015, when I started recording everything in a thread here, my investments returned -8.2%. VLS60 returned +2.7%

Tracking performance was useful, because I realised I must be doing something wrong. If anything, I think my main mistake was taking profits too early. When shares in EasyJet rose from 300p to 400p, I sold and felt happy. But that happiness was diminished when those same shares rose to 500p, 600p, 700p, 800p, 1000p,1200p, 1400p, 1600p. That is an extreme case, but I have done the same sort of thing over and over.

Bagging modest gains does not compensate for incurring heavy losses, and I have had a few of those. AIM companies which have dropped like stones and then been taken private (three times that happened- I am a slow learner). Established "safe" companies like Tesco and Sainsbury which lost a lot of value. Commodity ETFs which shrank because of the effects of contango.

But it is not all bad news. Thankfully, at the heart of my portfolio, I have had a global index tracker, and this mean that I only underperformed my benchmark by 5-10% each year, rather than 10-20%. And the portfolio was not large initially, so I could shrug off any losses.

In 2016, at last, the sun came out. My portfolio returned +21.8% compared with VLS60 +18.4%. This was mainly because I did very little, and sat on my hands while strange forces around the world changed the value of stuff I already had.

In 2017 I am letting the “active” portion of my portfolio dwindle, while I continue to invest in two passive funds: a global equities fund and a global bond fund. My performance this year should be very similar to VLS60, is is around +5% YTD. Having established that I am no Warren Buffett, a passive approach seems to be the way forward for me personally.

finellah

bostonerimus wrote: »

What I was getting at was that I'm buying, holding and selling in dollars. Currency fluctuations will be baked into the portfolio for cross border holdings, but I'm not going to convert from dollars to pounds when I have a US based portfolio. I'll report percentage returns.

My VLS 80 is up 2.5% since February/March. I perhaps missed some gain in Jan but suppose that a big chunk of the difference (obviously some asset allocation also) c.f. your 11% will be related to currency (e.g. GBP/USD 1.23 in Jan to 1.34 now).

finellah

1) Children's JISA

£100,000 - VANGUARD LIFESTATEGY 80

2) My SS ISA (Not going to help on any passive vs active debate - mix of both - I limit myself to max total fund charge 0.5%. Asset allocation will likely be adjusted over time.)

£10888 - LEGAL & GENERAL UT SHORT DATED CORP BOND IDX I
£14726 - PIMCO GLOBAL ADVIS GBL BD INST STLG HDG ACC
£7209 - TROY TROJAN O ACC NAV
£4933 - BLACKROCK FM LTD ISHARES GBL PROP SECS EQTY
£8742 - VANGUARD INV SER EMERG MKTS STK IDX ACC NAV
£4286 - LEGAL & GENERAL UT L&G PACIFIC IDX TRUST I ACC
£3695 - LEGAL & GENERAL UT L&G UK INDEX TRUST I ACC
£8666 - BLACKROCK FM LTD ISHARES NORTH AMERICAN EQTY
£1452 - FIL INV SVCS UK INDEX JAPAN W ACC NAV
£6371 - DODGE & COX WORLDW GBL STOCK A GBP ACC
£5397 - MARLBOROUGH FD MGR UK MICRO CAP GROWTH P ACC
£7127 - LINDSELL TRAIN LTD GLOBAL EQUITY B INC NAV
£5035 - BAILLIE GIFFORD JAPANESE SML COS B NAV ACC
£5211 - HENDERSON INVESTME EUROPEAN SMALLER COS I NAV
£6130 - BLACKROCK FM LTD EUROPEAN DYNAMIC FD ACC

bostonerimus

finellah wrote: »

My VLS 80 is up 2.5% since February/March. I perhaps missed some gain in Jan but suppose that a big chunk of the difference (obviously some asset allocation also) c.f. your 11% will be related to currency (e.g. GBP/USD 1.23 in Jan to 1.34 now).

I have very little invested in GBP stocks.

bigadaj

bostonerimus wrote: »

I have very little invested in GBP stocks.

Yes but relative performance here is also a function of currency, certainly who you might be holding a very different balance to the average uk investor.

Your gains this year will have made up for relative usnerperfomance in 2016 from a uk investor perspective, many equity heavy portfolios in the uk increased by maybe 25% in 2016, but around half of that performance was currency related as sterling fell against the dollar and euro.

finellah

bostonerimus wrote: »

I have very little invested in GBP stocks.

I do have quite a bit invested in US stocks in VLS 80 though....

bostonerimus

finellah wrote: »

I do have quite a bit invested in US stocks in VLS 80 though....

.......and currency fluctuations will show up in that. As the UK investor probably invests more outside the UK than the US investor does outside the USA they are going to be more sensitive to exchange rates.