Newish to investing.

Ridethewave

Though not adverse to risk...having been burnt a little spreadbetting a year ago.... I decided less risk was definately advised
I noticed that my old mutual self select pension funds had been doing well...10% peryear since 1998 and 14%py over last 5 years and about20% over last year.

So I decided to open a stocks and shares isa on Charles Stanley platform ...10K

funds...
axa framlington glob tech
axa fram uk small cos
henderson glob tech
invesco hong kong and china
invesco small cos equity
henderson china opportunities
Marlborough uk micro cap growth
old mutual uk small cos
liontrust uk small cos

Ive kept away from japan at the moment because of north korea fears
my funds are all accumulation funds roughly equal in size.
started 13th september 17
since then it dropped 2% then went to plus 4.5 and last week dropped back to 2%(tech stocks and china fallng back)

Im sure I have lots to learn and am new here... so HI!

I probably have lots of questions but for now....
comments please.

AnotherJoe

IMO, Too many funds for £10k.

To balance that, half of them are covering the same grounds, you’ve gone very risky with half your equity in small companies (and 80% of that in one economy), and then half the remainder in two sectors, tech and China region.

You might therefore just as well have bought one UK smaller cos, one China, one global tech, and your performance will reflect that, I’d expect it to be quite volatile especially with 40% being in smaller cos in the U.K. which could be significantly impacted by Brexit.

Ridethewave

Do I lose or gain anything by taking out 10 funds instead of 3?.

ColdIron

Would you lose or gain anything by taking out 100 funds instead of 10?

Apart from unnecessary complication, one area where you lose out is fund charges. Instead of following the strategy of one fund or fund manager you are creating a blend or strange mish mash of them all with no dominant objective or strategy. What you end up with is tracker like performance whilst paying active fund manager charges to achieve it

Linton

Ridethewave wrote: »

Do I lose or gain anything by taking out 10 funds instead of 3?.

You dont gain much by having multiple similar funds, just some protection against a very foolish fund manager. You lose because....
1) Possibly extra dealing charges - fund purchases/sales are often fixed price.
2) Extra work deciding which to buy/sell and rebalancing.
3) Lack of immediate clarity in where you are investing
4) You may have a mistaken belief that you are increasing diversification.

If you only have a £10K portfolio any benefit of £1K in fund A and £1K in fund B rather than £2K in fund A is probably small change in £ terms and not worth the time thinking about.

AnotherJoe

Ridethewave wrote: »

Do I lose or gain anything by taking out 10 funds instead of 3?.

The more funds you have in the same sector, the more their overall performance approximates a tracker fund, which means you are paying unnecessarily high management fees for a tracker. When you set out to get better performance by paying more for better management, so that’s wasted.

At the extreme, with 100 funds (to answer the Q from Coldiron), that’s an absolute given, so in that case you are probably losing at least 0.5% every year which might not seem like a lot but if long term performance is 5% you are reducing overall performance by 10%

Filo25

Ridethewave wrote: »

Do I lose or gain anything by taking out 10 funds instead of 3?.

It depends on how charges are applied to your account I suppose, if it is a flat fee on funds held then not directly from a financial perspective.

Otherwise it probably just means you need to keep a closer eye on where you might be over/underexposed.

Ridethewave

fund dealing is free on CharlesStanley.
It seems that reducing funds now and reinvesting in the one remaining fund would lose more money than keeping the others which all pretty much have the same management charge..approx 0.75%.
Correct me if I'm wrong.

any other comments welcome

John:p

jimjames

Ridethewave wrote: »

Ive kept away from japan at the moment because of north korea fears

Curious about this bit when you've got 2 funds invested in China which borders North Korea. Is there a reason you think the impact will not be felt across Asia?

Ridethewave

although china does of course border north korea, as far as I know north korea is not pointing its weapons in that direction. Wheras Japan and south korea are far more seen as allies of USA.

dunstonh

So I decided to open a stocks and shares isa on Charles Stanley platform ...10K

funds...
axa framlington glob tech
axa fram uk small cos
henderson glob tech
invesco hong kong and china
invesco small cos equity
henderson china opportunities
Marlborough uk micro cap growth
old mutual uk small cos
liontrust uk small cos

Way to go. Classic fashion investing and talk about going right in at the deep end. That is going to be a rollercoaster of a ride. Less Ridethewave and more ridetherollercoaster

You should be a sticky thread in this section on what to avoid.

since then it dropped 2% then went to plus 4.5 and last week dropped back to 2%(tech stocks and china fallng back)

Who cares about 2-4% swings when that spread is capable of 70% losses. And that is not a joke. Seriously, that is the sort of swing that spread is capable of.

Trying to build a bespoke portfolio on just £10k is pointless. Building a bad bespoke portfolio on any amount is not a good idea but picking the highest risk niche funds and putting random amounts into each is not the way to invest sensibly.

It seems that reducing funds now and reinvesting in the one remaining fund would lose more money than keeping the others which all pretty much have the same

How would it lose money by putting it right? Getting it wrong is likely to cost you far more.