Portfolio Advise

ciscobloke01

Hi
I know peeps usually pay for this kind of thing, just wondering where is the cheapest/best place to get advise on my current portfolio and any tips?

AXA Framlington Managed Balanced
Inclusive - Class R - Accumulation (GBP)
Value £7,639.58
Cost £5,829.44 Gain/Loss £1,810.14 31.05%

Fundsmith Equity
Class I - Accumulation (GBP)
value £1,342.66
Cost £1,098.74 Gain/Loss £243.92 22.20%

HL Multi-Manager Asia & Emerging Markets
Accumulation (GBP)
Value £314.86
Cost £249.56 Gain/Loss £65.30 26.17%

HL Multi-Manager Income & Growth Trust
Class A - Accumulation (GBP)
Value £457.17
Cost £438.70 Gain/Loss £18.47 4.21%

HL Select UK Growth Shares
Acc (GBP)
Value £2,701.66
Cost £2,299.59 Gain/Loss £402.07 17.48%

HL Select UK Income Shares
Accumulation (GBP)
Value £249.13
Cost £250.00 Gain/Loss £-0.87 -0.35%

Investec Cautious Managed
Inclusive - Class A - Accumulation (GBP)
Value £2,312.88
Cost £1,847.47 Gain/Loss £465.41 25.19%

Jupiter India
Inclusive - Accumulation (GBP)
Value £976.37
Cost £1,000.00 gain/loss £-23.63 -2.36%

Legg Mason IF Japan Equity
Class X - Accumulation (GBP)
Value £578.54
Cost £500.00 gain/loss £78.54 15.71%

Lindsell Train Global Equity
(Inclusive - Class A - Income (GBP) & Class D - Income (GBP))
Lindsell Train Global Equity
Class D - Income (GBP)
Value £9,724.85
Cost £8,326.49 Gain/Loss £1,398.36 16.79%

Lindsell Train Global Equity
Inclusive - Class A - Income (GBP)
Value £11,238.15
Cost £6,807.38 gain/loss £4,430.77 65.09%

Liontrust Special Situations
(Inclusive - Class R - Income (GBP) & Class I - Income (GBP))
Close
Liontrust Special Situations
Class I - Income (GBP)
Value £225.88
Cost £198.28 gain/loss £27.60 13.92%

Liontrust Special Situations
Inclusive - Class R - Income (GBP)
Value £3,248.67
Cost £2,820.50 gain/loss £428.17 15.18 %

Marlborough UK Micro Cap Growth
Class P - Accumulation (GBP)
Value £1,346.86
Cost £995.60 gain/loss £351.26 35.28 %

Old Mutual UK Smaller Companies Focus
Class R - Income (GBP)
value £542.96
Cost £542.96 0.00 0.00 (NEWLY ADDED)

Scottish Mortgage Investment Trust
Ordinary Shares 5p
Value £15,290.37
Cost £13,432.99 gain/loss £1,857.38 13.83%

Cheers in advance

Alexland

Welcome to the forum,

Is there any logic underpinning this portfolio or is it just a bunch of stuff you heard about, researched and bought along the way? With the devaluation of the pound it would be hard for most of these funds not to achieve healthy gains.

Tell us a bit about yourself and your investment objectives?

Alex

ciscobloke01

Hi, no logic.. its exactly as you said stuff I tried to research and took a punt on, adding them to my portfolio. I have no idea if they are good choices and more importantly have no idea if I need to add other less risky funds to my portfolio or if this is a good mix as it is? I'm 38 and don't have a scoopy doo wit things like this, just read then take a gamble. I'm hoping to add to this S&S ISA monthly to by about £200 pm moving forward.

Im 38, married with 2 children. Our goal is Growth for retirement and either of us have a pension other than the crap work had to legally offer us.

We have 3 rental properties 2 of which are on interest only mortgages. We save £500pm in another S&S ISA in similar funds with the hope that when the mortgages are due in 25 yrs time we have enough to pay these off without having to sell up, so that we will then have about £1500pm coming in to help us in retirement. I worked out that based on saving £500 pm we need the portfolio to grow by about 2.3% average per year. Hopefully more so I have some money left over. Out of interest what is the average growth in S&S historically?

Alexland

Hi,

If you are saving for retirement have you considered the advantages of using a pension (additional contributions to your employer scheme if you get salary sacrifice or a parallel SIPP) or LISA rather than an ISA? Are your pension pots balanced so that each of you are able to withdraw tax efficiency?

Is your platform choice optimised to minimise fees for the investments you intend to hold?

In terms of your portfolio one of the first questions is to understand your tollerence to volatility. For example have you considered the historical stock market crashes and the pounds and pence impact to your valuations if a 50%+ drop was to occur again?

Most people would be very uncomfortable and worse still behavioural investing may cause them to sell low as they fear they may loose everything. It's important you give this some deep thought as it will determine how you apply the alchemy of asset allocation using uncorrelated assets (such as bonds, equity hedging, commercial property, gold and cash).

These uncorrelated assets tend to have limited (if any) growth or income opportunity but dampen volatility which through the magic of fixed allocation portfolios and rebalancing can cause the overall portfolio to perform more consistantly.

Next you need to consider the active versus passive debate and the one element of fund performance you can control - fees. None of the funds you have listed above look cheap!

Research has mostly shown that very few active managers can outperform the market on a constant basis. Some active managers will have a broad set of funds to hedge their bets and then just advertise the ones that have randomly performed well in recent years to gain new investors. I have more respect for those such as Fundsmith or Orbis where they limit their fund range to focus on performance however they tend to have very concentrated investments which carries greater risk - just look at Woodford. The danger is that if they underperform they place increasingly risky bets trying to recover the situation.

Passive funds track the market (there are still decisions to be made on global and sector weighings) at low cost. Costs compound over time and work against you. There are lots of debates on if these funds should be weighed by market cap (favouring large companies and the US), geography (but the markets in some emerging countries are too small and synthetic replication carries additional risk) or gave greater UK bias (as this is where you will probably spend the money). Many investors and pension providers would use passive funds as the core of their portfolio.

Next you need to consider interest rates as the stock's real value isn't determined by the current share price but it's fundamental ability to generate income - the forward p/e ratio and if investors are able to get a better return elsewhere (such as if cash deposits started providing a higher return) this may cause valuations to drop.

Finally the big issue for a UK investor is the risk that the Brexit related devaluation of sterling will unwind back the the norm. A number of funds offer currency hedging which can reduce the impact so you need to consider your exposure.

Good luck,
Alex

Ps I would expect the average investor has been making around 10% per annum (so 7% above inflation) in the long recovery since the financial crisis. 2015 was a fairly quiet year and the returns in 2016 were significant because of the currency movements. However with current P/E ratios unless there is an unexpected rise in earnings then that rate is unlikely to continue so my view is that earning 2% above inflation is a realistic target.

BLB53

I'm 38 and don't have a scoopy doo wit things like this, just read then take a gamble

I suppose the main advice would be to try and develop more structure and create a simple plan to get you where you want to be in say 20 years.

You are mostly invested in equities which have done well over the past few years but are you prepared for a sudden fall in the markets. Some investors feel more at ease with a diverse mix of bonds and property to smooth out the equities.

For example, you could substitute some of your holdings for Vanguard Lifestrategy 60 (or 80) which hold government bonds.

Here's an article from DIY Investor which may explain things a little better

http://diyinvestoruk.blogspot.co.uk/2015/07/what-does-it-takes-to-be-successful.html

Also, just check the charges on your investments and the platform costs where you hold them...if the combined costs are over say 0.75% then you may be paying over the odds.

ciscobloke01

Many thanks for your replies, all appreciated even if what you are saying is wayy over my head. :-)

Is the gist of it to balance my portfolio a little so less exposure to equities? Would the Vanguard 40 be better with only 40% in equities? The 40 and 60 both look OK to me

BLB53

Is the gist of it to balance my portfolio a little so less exposure to equities? Would the Vanguard 40 be better with only 40% in equities?

I think its just a case of matching your holdings with your appetite for risk and taking account of the inevitable market falls to come.

With 100% equities you could lose maybe 30% of the current value but with a higher percentage of bonds/cash you may only be down say 10% or 15% which would be easier to handle.

Its all about risk/reward and adopting a sensible asset allocation which you can hold long term.

ciscobloke01

Thanks, out of interest. Which of my current funds would you sell off/swap with Vanguard to balance the portfolio?
I'm thinking
Legg Mason IF Japan Equity
Jupiter India
HL Select UK Income Shares
HL Select UK Growth Shares
HL Multi-Manager Income & Growth Trust
Fundsmith Equity
AXA Framlington Managed Balanced.
And maybe some of the Lindsell Train Global Equity

This would be £14 to £20k worth

Alexland

We really can't tell you what to do but we can help educate, make suggestions but you need to find your own path.

ciscobloke01

Can I get peeps views on Artemis Strategic Bond as a option for smoothing out risk in my portfolio?

jimjames

I can't really comment about bond funds as I'm 100% equity but you might be better using something like Vanguard VLS40 or VLS60 as the balance for volatility.

Personally I'd also do something about the heavy focus on expensive HL funds. Having income, growth and income & growth funds seems huge overkill especially with all the other funds you have. You also have some key areas missing like USA.