Mainly Passive ETF portfolio

Glen_Clark

pip895 wrote: »

think the pound will probably move up once brexit is behind us.

If Brexit was behind us we would be staying in the EU, and then I'm sure the pound would move up. But it looks like we are leaving so Brexit will never be behind us.
As it is, the market cap of FTSE 100 is about 5 times that of the FTSE 250. Diverting your allocations away from that looks Active, rather than Passive?

Linton

Audaxer wrote: »

Yes, maybe if having more small companies, gold, high yield bonds etc. were so important to get a balanced portfolio, passive and active multi asset funds would include them in their funds?

What do you mean by a balanced portfolio? Is it the same as diversified?

On small companies....
1) Large funds may not be able to buy enough Small Company shares to make a significant difference. You cant easily buy or sell £1M worth of a £50M company without severely disrupting the market.
2) Small Company portfolios require more effort. Extra effort means extra cost for a commercial company.
3) There are no satisfactory small company indexes - those indexes that do exist tend to include suprisingly large companies. Last time I checked, the MSCI world SC index would include about 30% of the FTSE100.
4) Multi-asset funds are perhaps more concerned with risk management than putting in the effort to squeeze a few extra % performance. People who are interested in maximising performance wouldnt naturally buy a multi-asset fund.

Malthusian

Glen_Clark wrote: »

Do you think S&P 500 companies are dependent on a single country?

No, but nor are Nikkei companies and it didn't stop the Japanese stockmarket having a lost decade.

Can you tell us a 5 star fund cheaper than 0.07% ?

(- the i shares S&P 500 ETF I use - CSP1 https://markets.ft.com/data/etfs/tearsheet/summary?s=CSP1:LSE:GBX )

The OP was using a DB-Trackers ETF with a TER of 0.16%, which has a number of cheaper unit trust alternatives.

firestone

with regards smaller companies the Vanguard global small cap tracker has done pretty well over the years and while favoring the US is still very diversified due to the number of holdings it has

Glen_Clark

Malthusian wrote: »

cheaper unit trust alternatives.

Can you avoid stamp duty and platform charges like you can with ETF's?

Linton

firestone wrote: »

with regards smaller companies the Vanguard global small cap tracker has done pretty well over the years and while favoring the US is still very diversified due to the number of holdings it has

Yes, it has performed significantly better than say VLS100. However it follows the MSCI World Small Cap Index. The average market cap of that index's holdings is $1.4B, say £1B. For comparison this is larger than Stobart, Stagecoach, AA, Balfour Beatty. just to name a few from a quick search. The largest holding is $12B, say £9Bn. A company this size would be around the midpoint of the FTSE100.

So although it could well be worthwhile as a significant holding for a more adventurous passive investor it doesnt seem to me to be focussed on the type of company that most people have in mind when they want to invest in "Small Companies".

firestone

Linton wrote: »

Yes, it has performed significantly better than say VLS100. However it follows the MSCI World Small Cap Index. The average market cap of that index's holdings is $1.4B, say £1B. For comparison this is larger than Stobart, Stagecoach, AA, Balfour Beatty. just to name a few from a quick search. The largest holding is $12B, say £9Bn. A company this size would be around the midpoint of the FTSE100.

So although it could well be worthwhile as a significant holding for a more adventurous passive investor it doesnt seem to me to be focussed on the type of company that most people have in mind when they want to invest in "Small Companies".

Must admit not in a position to check but when i took it out a few years back i thought the top holdings in the VGSC had market caps at an average of a Billion or Two but guess small is the new big:) But even so with over 4000 holdings its pretty well spread over companies & values.Guess if you want to go Micro cap it needs to be active

pip895

I hear what you are saying re the number of funds but getting it down to 10 seems pretty good to me. My ISA - for which I use mainly active funds has 18 funds in it and it's half the size of this one lol.:o

The third iteration is as follows -
HSBC MSCI World NAV GBP 30%
HSBC MSCI Emerging Markets GBP 5%
iShares £ Corporate Bond 0-5yr UCITS ETF GBP 15%
iShares Developed Markets Property Yield UCITS ETF GBP 7%
iShares Global High Yield Corp Bond GBP Hedged GBP 10%
Vanguard FTSE 250 UCITS ETF 5%
ETFS Physical Gold GBP 5%
BlackRock World Mining IT 3%
JP Morgan European Smaller Companies Trust PLC Ord 5P 3%
JP Morgan Japan Smaller Companies Trust Plc 2%
JP Morgan Smaller Cos IT plc 5%
Cash 10%

I have taken on board the advice regarding using a global fund for my basic large company exposure. I don't think etf's or indeed passives are best for small companies so I have gone back to using IT's for these + I have also added a Resources IT in place of a small amount of the property etf - hopefully active management in this area will reduce the impact of weaker companies going under. The risk factor is down to 67 and the performance has improved, so I am pretty happy with that.

Audaxer

pip895 wrote: »

The risk factor is down to 67 and the performance has improved, so I am pretty happy with that.

Where do you establish what the risk factor is for the whole portfolio?

pip895

I put the portfolio into Trustnet and do the analysis there.