31 Dec Annual Rebalance

Alexland

Anyone else doing their annual review, market risk assessment and rebalance planning today?

I decided to stick with VLS80 in my SIPP for another year (partly due to the Halifax VLS trading issue) and have just placed instructions to adjust my workplace scheme (no trade costs and very cheap to hold gilts) so my overall pension position is back to 70% shares, 10% bonds, 10% gilts and 10% in a cash fund which earns modest interest.

By going DIY on my pensions I am saving around £850 in annual fees (only paying 0.33% total) compared to my workplace default funds which would have returned around 3% less in 2017 for a similar risk profile.

I ran the various types of ISA aggressively in 2017 with an average of 80% shares but am pulling back to an average of 70% shares, 30% bonds and some equity hedging for 2018 (again no trade costs) as some of the global stock markets are looking a bit too hot at the moment for my liking. I will no longer run any accounts with 100% shares as I am expecting an eventful year ahead.

Thanks to everyone who contributes to these forums (even those who only ask questions) for helping me further develop my investment thinking and platform knowledge over the past 12 months. When I started investing fees under 0.5% were unthinkable.

Alex.

Audaxer

Alexland wrote: »

I ran the various types of ISA aggressively in 2017 with an average of 80% shares but am pulling back to an average of 70% shares, 30% bonds and some equity hedging for 2018 (again no trade costs) as some of the global stock markets are looking a bit too hot at the moment for my liking. I will no longer run any accounts with 100% shares as I am expecting an eventful year ahead.

Sounds like a good move, although I thought you had mostly multi asset funds?

bowlhead99

Alexland wrote: »

Anyone else doing their annual review, market risk assessment and rebalance planning today?

Not me. First week of April is the deadline for making and implementing the decisions about what capacity I have in different tax wrappers, what marginal tax rate I am on and what it will cost to invest via different methods with the trade off of how soon I could access the money etc etc. So March is usually when I am putting a slug of new money to work if I have it, or restructuring and juggling stuff.

Basically the fact that December is the end of the calendar year doesn't really trigger me doing anything special because there are no deadlines to do anything. It's not even the deadline to finalise and clear off last year's tax bill or refund (that's a month away). It's only a deadline to load up on fizzy wine to see in a new year with good friends or family.

Good luck with the latest iteration of your plan and best wishes to everyone for 2018. I suspect my traditional new year's resolution to cut down on the time I spend on MSE will probably go no better than it has the last few times (I tend to say it every year end and most summers as well), so see you around no doubt!

Alexland

Audaxer wrote: »

Sounds like a good move, although I thought you had mostly multi asset funds?

That's true but some multi asset funds are only one asset type (eg VLS100) or include equity hedging (eg Orbis Balanced). Also I use a few individual funds in my workplace pension to get my final target asset allocation and optimise fees.

Alexland

bowlhead99 wrote: »

Not me. First week of April is the deadline for making and implementing the decisions about what capacity I have in different tax wrappers, what marginal tax rate I am on and what it will cost to invest via different methods with the trade off of how soon I could access the money etc etc. So March is usually when I am putting a slug of new money to work if I have it, or restructuring and juggling stuff.

Unfortunately my work gets really busy as my employer and main customer's financial year end occurs on 31st March so I try and get a few small accounts fully funded in the first few months the tax year and by now I have a pretty good view of how my regular contributions and personal tax position will land.

Prism

My main global fund is pretty much untouched from last year. Its 100% equity, balanced reasonably closely with MCSI global allocations. Its about 65% active and 35% passive. Charges are 0.75% for the funds and about 0.38% for the platform. Charges don't particular worry me so I'm happy with that level.

I have opened a second, more future themed focused SIPP ready for this year with just three funds in it - Baillie Gifford global discovery, a Robotics ETF and FEET. Even though this was meant for next year really its already up 4.9% in the last 3 weeks since I invested so my hopes are up. I don't have any regional allocation or risk plans for it - just the idea to invest in the future themes of AI, robotics, the emerging consumer and global small growth companies. Not very scientific I know..

capital0ne

I re-balance on 6th April, when I fund my ISA with the max amount. ETFs and ITs are my choice

Thrugelmir

Alexland wrote: »

Anyone else doing their annual review, market risk assessment and rebalance planning today?

Regular contributions plus income reinvestment now make it a continuous monthly task. Though as I primarily aim to buy and hold. Sales are now somewhat fair and few between.

Linton

I mainly rebalance during March and April. Rebalancing is complex involving cash in PBs, funds in 4 different accounts spread over 3 platforms and the need to drawdown into S&S ISAs sufficient from my SIPP to use up my basic rate tax band

capital0ne

Linton wrote: »

I mainly rebalance during March and April. Rebalancing is complex involving cash in PBs, funds in 4 different accounts spread over 3 platforms and the need to drawdown into S&S ISAs sufficient from my SIPP to use up my basic rate tax band

If you use a spreadsheet (i'm sure you do) this will simplify the task greatly, for example my wife just completed her tax return (16/17) online in 35 mins, and paid her underpayment.

Her income comes from four pensions, state pension, NS&I products, several bank accounts paying interest, share dealing and P2P accounts.

All very easy with a spreadsheet - keeping her tax bill to a minimum Income £23k, Tax £1.6k

She should have paid no tax, but she took a lump sum from a small pension which was taxed.
My advice was to stop her state pension for a year, use the lump sum for income and then restart her state pension + 10.2%. She didn't like the sound of this and decided not to do it :-(

Ditto when I rebalance both of our portfolios in April, I minimise the number of trades by adding our ISA allowance and then rebalance by mainly buying rather than selling and buying, it's all so easy with a spreadsheet

Linton

Calculating tax isnt a problem, MS Money can produce reports of tax related transactions.

The complication is that I run 3 separate portfolios, Growth, Income and Wealth Preservation spread across 4 accounts (his & hers SIPPs and ISAs). These are managed as a single entity. I dont treat the ISAs and Sipps or His and Hers separately, a particular Growth or WP fund for example could be held in any of the accounts. Under these conditions if one doesnt take care one eventually ends up with bits of every fund in every account. To avoid this I may sell a fund in one account and buy the same fund in another to consolidate holdings.

Rebalancing isnt a matter of keeping fund %s constant but rather managing the total assets held in each of the 3 separate portfolios in line with my objectives and keeping the asset allocation in each portfolio roughly constant.