How much to hold in any one fund

bostonerimus

BananaRepublic wrote: »

I would argue that you are too heavily invested in one market - the US - however, it's not for me to tell you how to invest, and you've probably done quite well, assuming you've been in the market for some years. I prefer a more diverse spread.

I'm overweighted in US equities, but that's common for people who live in the US. A more diverse spread is probably appropriate for someone in the UK, and I'd be closer to a global market cap weighted portfolio if I lived there. I have done well with my allocation over the years. For most of my 30 years of investing I was 40% US equity, 20% global ex US equities and 40% US bonds which has returned a 30 year annual average of 8.5%. If I'd been 60% US equities and 40% US bonds the return would have been a bit over 9%.

Audaxer

AlanP wrote: »

The OP started off asking about percentages, which for this type of thread are more helpful than £values.

£50k to one person might be over 100% of their pot, for others it might be as low as 1% (I wish )

The original question asked about maximum/minimum held in any fund/IT, although he later mentions percentages he would hold. I would be reluctant to hold more than £50k in any fund house irrespective of the percentage of my portfolio, as any more than that wouldn't be covered by the FSCS.

With regard to ITs, they are shares so I am reluctant to invest large sums in any one IT as there is the possibility the IT could go bust as could happen to any company, and they are not covered by FSCS. A fund could perform badly but could not go bust, so I tend to favour funds over ITs.

JohnRo

Funds and ITs both invest in assets, that's not to say they're the same thing, clearly they operate differently but given both are regulated and all else being equal it's the underlying holdings going bust you need to worry about not the vehicle itself holding them.

StellaN

Our overall investment portfolio is just over £500K and the maximum holding we have in our portfolio is around 20%.

bostonerimus

StellaN wrote: »

Our overall investment portfolio is just over £500K and the maximum holding we have in our portfolio is around 20%.

Having 50% of my portfolio in a single fund means that I have well over 7 figures in a single mutual fund. I don't worry about that because of the" mutual structure" of Vanguard where the share holders own the funds and the funds own Vanguard.

Linton

bostonerimus wrote: »

Having 50% of my portfolio in a single fund means that I have well over 7 figures in a single mutual fund. I don't worry about that because of the" mutual structure" of Vanguard where the share holders own the funds and the funds own Vanguard.

The structure of Vanguard shouldnt make any difference because the ownership of the underlying investments remains with the investor anyway. The only possible risks where the FSCS guarantee may be appropriate that people have managed to come up with are fraud and perhaps gross negligence. These are surely just as likely (or rather unlikely) with Vanguard as with say BlackRock.

ArchBair

Linton wrote: »

The amount I hold in any one active fund is that required to get close to my desired overall asset allocation in terms of geography, company size, industry sectors, etc. So in theory, if there was a manager who thought exactly like me, one fund would be enough. In practice about 10-15 are sufficient. No holding is above 20%. Any holding below 5% needs to be questioned and any one below about 2% wont make enough difference to be worth the effort. The funds held in small %s are focussed on a particular sector or other small market.

Out of interest, would you mind me asking what your largest holding is, if no holding is above 20%?

Linton

ArchBair wrote: »

Out of interest, would you mind me asking what your largest holding is, if no holding is above 20%?

In my Growth portfolio which is closest in objective to most portfolios discussed in the forum....

Artemis Global Growth at 18.5%. Most of the portfolio consists of separate country/region funds.

bostonerimus

Linton wrote: »

The structure of Vanguard shouldnt make any difference because the ownership of the underlying investments remains with the investor anyway. The only possible risks where the FSCS guarantee may be appropriate that people have managed to come up with are fraud and perhaps gross negligence. These are surely just as likely (or rather unlikely) with Vanguard as with say BlackRock.

Agreed. Any large diverse mutual fund or ETF is very safe...... apart from market variability. The funds I'd worry about would be small niche ones like junk bond funds and closed end funds where the chances of a bad loan, investment decision or fraud are slightly higher.

ArchBair

Linton wrote: »

In my Growth portfolio which is closest in objective to most portfolios discussed in the forum....

Artemis Global Growth at 18.5%. Most of the portfolio consists of separate country/region funds.

Funnily enough, when I was looking at Global funds, I did look at Artemis Global Growth and was very tempted especially as the fund manager Peter Sacke has been there since 2004. I also looked at Henderson Global Growth, Invesco Perpetual Global Opportunities and Fidelity Global Special Situations. I presume you prefer OEIC funds to IT's.