Retirement Portfolio?

tacpot12

My large cap investment selections, and in fact all my selections, are based on a conscious decision about investing style, risk and cost (risk vs. reward). I have consciously bought into the "sales pitch" for each investment, having decided that its aim and approach made sense in the context of the role of the investment in my portfolio.

I have 9 sectors that I'm investing in, and a total of 20 (collective) investments. For sectors where I want to invest larger amounts, I have selected 2 or even 3 investments, with similar investment approaches. So I understand and expect that there is a lot of overlap in the underlying share holdings. Holding these near duplicate investments is being done for resilience - none of the funds within a sector share the same investment management company. I would understand an argument that says if I am investing in active funds, then I'm effectively building a passive tracking portfolio using more expensive funds, but I've tried to pick the best 2/3 investments that meet my needs (from sectors that might include hundreds of funds), so I expect these active funds to beat the passive options by enough to make the additional risk worthwhile. I have a mixture of active and passive investments in the portfolio, with a bias towards the active model.

Over the next 10-20 years, I would expect to prune the portfolio, swapping out investments that have failed to perform and might use this as an opportunity to reduce the number of holdings if the portfolio performs well, or switch into more passive investments if my active selections don't out perform the passives. As an amateur, I will be using this portfolio to increase my knowledge, and being able to watch my pension investments perform gives me both the opportunity to learn and the necessity to do the best job I can. After 20 years, I expect to either buy an annuity, or hand the portfolio over to a discretionary manager.

I've always been quite adventurous with investment risk, and have other income and DB pensions, so I'm comfortable with managing my SIPP myself. I also have a background in financial modelling as well, which helps.

Hopefully the OP finds this discussion useful in the context of his question.

bostonerimus

Cat333999 wrote: »

So beyond the good advice kindly imparted so far (thanks to all and also Dunstonh for his multiple contributions) how about some suggestions for allocating a £1m pot into actual funds that achieve a suitable split of asset classes.

I'm in the US and basically have 50% US equity index, 25% global (ex US) equity index and 25% US bond index. I could replace the equities with a single cap weighted global tracker. I have complimentary assets like a rental property and some old deferred annuity contracts that are boring but very safe and reliable. So my 3 fund Vanguard portfolio is

VTSMX 50%
VTIAX 25%
VBTLX 25%

I the UK you might want a little more UK equity and less US equity and UK bonds and gilts. Job done....there's too much fun to be had in retirement to waste a lot of time on complicated portfolios.

kidmugsy

Cat333999 wrote: »

how about some suggestions for allocating a £1m pot into actual funds that achieve a suitable split of asset classes.

I can do better than that; I can tell you what not to invest in.

https://forums.moneysavingexpert.com/discussion/comment/74609517#Comment_74609517

Audaxer

dunstonh wrote: »

Platform splitting isnt an issue if you use mainstream.

dunstonh, with a £1m portfolio is it definitely safe to have it all on the one platform? Although the risk loss through a major fraud is low, if it did happen I would have thought the impact would be high. If investor funds disappeared through a major fraud or for any other reason, would mainstream platforms like HL, AJ Bell and Halifax Share Dealing reimburse investors before having to resort to claim through the FSCS?

ffacoffipawb

OldMusicGuy wrote: »

Like dunstonh said, why? It looks pretty random. That kind of portfolio looks like the thing an IFA should put together.

As a cautious DIY investor just 6 months into retirement, I have a portfolio of 3 multi asset passive funds for a large portfolio that seems fairly resilient to downside (based on its performance through this year's correction).

I did have an actively managed fund focused on income generation but I found it too volatile for my liking, but YMMV.

Hi could you tell me what these multi asset funds are please?

Thanks

dunstonh

dunstonh, with a £1m portfolio is it definitely safe to have it all on the one platform?

I see no issue if you stick to mainstream, both on platform and the investments you use.

If investor funds disappeared through a major fraud or for any other reason, would mainstream platforms like HL, AJ Bell and Halifax Share Dealing reimburse investors before having to resort to claim through the FSCS?

What are the odds of a fraud large enough to cause that?

Most of the platforms no longer use in-house software. You invest in funds across fund houses and you use an administration platform. A fraud would have to capture all of those.

Anything is possible. You cannot say aliens wont land next week and take control of Brexit. However, if you are that worried about a platform then perhaps you shouldnt be invested at all.

bostonerimus

Audaxer wrote: »

dunstonh, with a £1m portfolio is it definitely safe to have it all on the one platform? Although the risk loss through a major fraud is low, if it did happen I would have thought the impact would be high. If investor funds disappeared through a major fraud or for any other reason, would mainstream platforms like HL, AJ Bell and Halifax Share Dealing reimburse investors before having to resort to claim through the FSCS?

I'm not in the UK, but I see no problem with putting that sort of amount on a single platform as long as it is one of the major well respected ones. Given my small number of funds and relatively large portfolio I end up with large amounts in single funds and I sleep ok at night.

Audaxer

dunstonh wrote: »

I see no issue if you stick to mainstream, both on platform and the investments you use.

Thanks, that's good.

What are the odds of a fraud large enough to cause that?

Probably pretty slim. What if certain individual's accounts were targeted and you were unlucky to be hit. Could that possibly happen? If an individual or group of individuals were targeted that way, would the mainstream platform reimburse these individuals?

Anything is possible. You cannot say aliens wont land next week and take control of Brexit. However, if you are that worried about a platform then perhaps you shouldnt be invested at all.

I'm not worried about the volatility of investments as I stick to funds, because I am confident they will recover from crashes. I was just looking for reassurance from knowledgeable people like your good self that mainstream platforms are definitely safe for portfolios well over the FSCS limit.