Please critique my proposed investment portfolio

Thrugelmir

Prism wrote: »

Exactly. VLS 80 (well all global funds really) benefit hugely from the drop in the pound and suffer when it goes back up

Perhaps better then to be more selective where one invests. Than buying "all". As not all companies will be impcted to the same degree.

purple_rose

"You could move some of the existing ISAs into pension too, especially if there's high rate tax to be saved."


How does moving a ISA into a pension save tax? Apologies if iam missing the obvious.

Alexland

purple_rose wrote: »

How does moving a ISA into a pension save tax? Apologies if iam missing the obvious.

Basically you spend the money in the ISA in place of your income which you contribute into a pension to get income tax relief and possibly also reduce national insurance too if your employer offers salary sacrifice.

However the tax saving isn't as high as it initially seems as some tax may be paid on withdrawal depending on your circumstances.

Alex

Wildsound

Thrugelmir wrote: »

Only around 24% is UK listed. Then when you consider where the major Blue Chips earn their money. The % drops even lower. .

Even if 24% is UK listed, unless the remaining 76% of holdings had a hedged strategy (highly unlikely), you will find that the sudden weakness in the pound had a major effect on the majority of the portfolio.

Wildsound

theGrinch wrote: »

I now want to rebalance my holding with an eye on the future.

My planned portfolio would be allocated similar to the following:

Equities
US 17.5%
UK 10%
European 7.5%
Japan 5%
Asia (non Japan) 5%
Emerging 5%

Bonds
UK Govt 10%
Corporate Bonds 10%
Global Bonds 10%

Other
Cash 10%
Gold 5%
Infrastructure Funds 5%

I would most likely hold managed funds and trackers

To the OP, I don't know how long you plan on holding such an allocation, or if you plan to rework your asset allocation regularly, but from an actively managed point of view, I would consider the following allocation at this point in time:

Equities
US 20% (I prefer to take a hedged share class if possible, my personal view is the pound is at it's bottom for now - if you disagree, then a standard share class will do)
UK 12% (There are some decent UK funds out there, so worth keeping a small allocation to UK)
European 10% (As with US, I prefer to take a hedged share class if possible)
Japan 8%
Asia (non Japan) 8%
Emerging 7%

Bonds - 30% is too much for someone your age, so recommend halving this with some strategic options
UK Govt 5% (index linked) - inflation likely to spike more so a hedge against this
Strategic Bonds 5% (outlook for corporate bonds is poor, I recommend strategic with a bias towards short dated high yield bonds)
Global Bonds 5%

Other
Cash 5%
Gold 5% (crypto has lost the hype as being a new storage of wealth, and political risk is rife, thanks Donald!)
Infrastructure Funds 5% (look for those with an asian bias, the chinese are all over spreading their infrastructure projects into other countries over the coming decades)
Global Absolute Return 5% (added to take the edge off any near corrections)

Just my thoughts

grey_gym_sock

some vital new info here that hasn't been commented on:

theGrinch wrote: »

3) Annually, I intend to transfer £20k (or the maximum allowed) from savings that I have built up over the years and earning 1% at present). As such, I could add £300k over the next 15 years.

4) The idea was to keep it tax free, but it seems I could be losing out on investment returns as I wait to add to my ISA; so should I think about a Pension?

wait ... so you already have close to £300k sitting on deposit, and you are planning to move this into investments gradually over the next 15 years? (i had assumed that you were instead saving about £20k a year from your earnings.)

if you have a lump sum, you can invest it all right away (well, not hastily, but as soon as you've arrived at a well-considered plan). yes, you should look at feeding as much of the lump sum as you can gradually into tax shelters (ISA and/or pension), but you can also invest the remainder unwrapped. and then gradually feed it into ISAs/pensions each year. you can just (e.g.) sell £20k-worth of unwrapped investments year year, put that £20k in an ISA, and buy back the same investments inside the ISA (this process is often called "bed & ISA"). and you should consider a similar process for pensions ("bed and pension"). (you wouldn't want all your capital inaccessible until you're 55+, but why not part of it? surely you don't plan to spend it all before then.)

8) After 2021, I should have an extra £10k income available, which I was then planning to put into a pension.

that's more new info! you're just pulling rabbits out of hats, here. how reliable is this mystery £10k a year? how long will it last? without knowing these kinds of things, we can't say anything very meaningful about the viability of your overall plan.

9) I envisage retiring by 60 (14.5 years from now) though 55 would be even better as my family tends to seldom pass 65.

do you smoke? do you have a medical condition which significantly affects your life expectancy?

if the answer to both those questions is no, then you are massively underestimating your life expectancy (as many people do). LE is generally much higher now than a few generations ago.

theGrinch

Thanks for the input so far, which has been very helpful. Special mention to grey gym sock, bowlhead99, Flobberchops, Alexland, kinger101, bostonerimus, kidmugsy and Wildsound.