Passive trackers

apollo9

After my recent thread on active v passive funds, I would like to move half my portfolio into passive tracker funds(Which will be into a SIPP)

I am not an expert so want something that is invest and forget. Other than the initial bulk transfer there will be a monthly drip as well.

My horizon is 15 years and I am middle of the road in terms of risk, and am happy investing in emerging markets and would like exposure to small caps as well in more developed economies.

I realise the wisdom is a VLS / L&G type fund but I am willing to stick 100% with equities. I am not sure of the likelihood of much upside with bonds, even with the income re-invested.

Thanks

Lokolo

Are you asking us to build your portfolio? No-one here will do that. If you want to go passive DIY, you need to be the one to research what you invest in.

You've got the VLS funds, which does have a 100% equities porfolio.

You can make a portfolio using a number of iShares instead if you want more say in the asset allocation. HSBC also have a number of passive trackers as well.

AnotherJoe

Aren't all trackers passive, by definition ?

ValiantSon

apollo9 wrote: »

After my recent thread on active v passive funds, I would like to move half my portfolio into passive tracker funds(Which will be into a SIPP)

I am not an expert so want something that is invest and forget. Other than the initial bulk transfer there will be a monthly drip as well.

My horizon is 15 years and I am middle of the road in terms of risk, and am happy investing in emerging markets and would like exposure to small caps as well in more developed economies.

I realise the wisdom is a VLS / L&G type fund but I am willing to stick 100% with equities. I am not sure of the likelihood of much upside with bonds, even with the income re-invested.

Thanks

If you are a medium risk investor then you don't want to be in 100% equities: that's high risk!

Additionally, your 15 year time frame is one and a half economic cycles (roughly) so you could find yourself trying to cash in during a downturn. As the end of your investment period approaches, you should really be looking at de-risking your portfolio. If you do decide that actually you are a high risk investor, then going 100% on equities for c.10 years and then introducing bonds to try and protect wealth might be a way forward, but I'm not convinced you are high risk. Perhaps consider a 70% equities allocation and still de-risk as you approach the end of the investment period.

Look at VLS; HSBC Global Strategy; Blackrock Consensus; and L&G MI funds.

apollo9

Thanks, my aversion to the VLS, Blackrock funds is their bond holding. I should do some more research.

IanSt

You say your horizon is 15 years - does that include the number of years that you'll be in drawdown in your pension?

You could find that you're actually going to be invested for a lot longer than that period unless you're planning on purchasing an annuity - which currently is not likely to be the best means of providing for the start of your retirement.

dunstonh

I am not an expert so want something that is invest and forget.

If that is your criteria, then why are you picking index tracking funds that will require you to make changes every year?

My horizon is 15 years and I am middle of the road in terms of risk, and am happy investing in emerging markets and would like exposure to small caps as well in more developed economies.

Sounds like you are making a lot of management decisions. That doesnt really fit with a passive philosophy.

My horizon is 15 years and I am middle of the road in terms of risk,

100% equities does not fit with that risk profile. Middle of the road would be around 50-60% equities.

100% equities is about 9 or 10 out of 10 on a typical 1-10 scale.

I should do some more research.

indeed you should.

ValiantSon

apollo9 wrote: »

Thanks, my aversion to the VLS, Blackrock funds is their bond holding. I should do some more research.

VLS offer a 100% equities version and Blackrock Consensus does too. HSBC Global Strategy Adventurous is almost completely equities too. I do wonder, however, what your reasoning is for avoiding bonds, as 100% equities does not fit with your stated risk attitude. You also need to see bonds as a bit more diverse than just one thing, UK gilts and investment grade corporate bonds are quite different from each other, for example.

bostonerimus

My horizon is 15 years and I am middle of the road in terms of risk, and am happy investing in emerging markets and would like exposure to small caps as well in more developed economies.

Sounds like you are making a lot of management decisions. That doesnt really fit with a passive philosophy.

This is perfectly consistent with a passive approach. You can set any asset allocation you want and use passive trackers in the portfolio, but you might argue that inefficiencies in some markets can be exploited better by active funds.

bostonerimus

apollo9 wrote: »

I realise the wisdom is a VLS / L&G type fund but I am willing to stick 100% with equities. I am not sure of the likelihood of much upside with bonds, even with the income re-invested.

Thanks

OK then buy a few passive trackers; a global equity, small cap and EM tracker. This will avoid the fees associated with a multi-asset fund. Just rebalance every so often.

dunstonh

This is perfectly consistent with a passive approach. You can set any asset allocation you want and use passive trackers in the portfolio, but you might argue that inefficiencies in some markets can be exploited better by active funds.

it is not consistent with a passive approach as it is selecting sectors whilst eliminating others. Those are management decisions.

OK then buy a few passive trackers; a global equity, small cap and EM tracker. This will avoid the fees associated with a multi-asset fund. Just rebalance every so often.

But the op wants a lazy investor option. So, no self rebalancing.

Everything points to a multi-asset fund as that is the only lazy investor option. its really a case of nailing down the risk level at this stage.

Any single sector investing, whether managed or passive, requires work by the individual to rebalance.