Please help narrow down these funds

mr_fishbulb

I've been thinking more about investing (thanks to all who answered on my thread on the ISA board). I'm probably going to drip-feed with £50 payments a month into each of 3 funds. The problem I have now is narrowing down my selections into the 3 funds.

Any views on the following?

Commodities (oil and/or gold):
- JPMorgan Natural Resources; or
- BlackRock Merrill Lynch Gold & General

Commodities (agriculture):
- CF Eclectica Agriculture A; or
- Wait to see Sarasin Chiswell's offering this month.

Infrastructure:
- First State Global Listed Infrastructure (very new fund)

Global Emerging:
- Allianz RCM BRIC Stars A; or
- Aberdeen Emerging Markets

I'm keen on the first 3 groups, but got worried I'm focusing too much on one area - should I drop one and spice it up with one of the Global Emerging funds?

Should I leave the infrastructure one until I can see how it's performing?

They are all mid-high to high risk but I am investing for the long term. I'm due a payrise and will pay it straight into this, so I won't notice any difference each month. I can afford to have a higher risk level on this as I have a company contributed pension investing in a medium-average risk group of funds.

Thanks for any advice.

MrMicawber_2

Assume when you say long term you are talking 10 - 20 years.

I like JPM Natural Resources as it spreads risk more than the Merrill Lynch Gold & General and probably has a bit more flexibility.

The Eclectica Agriculture and the infrastructure fund are so new that they have no track record. If you are new I am a big fan of M&G Global Basics and might consider building a sum in here first.

Allianz RCM BRIC Stars and Aberdeen Emerging Markets are both good. If you are going long term then maybe Allianz BRIC stars.

This is still a 'very adventurous' mix so hopefully not your lifes savings.

purch

I think the two funds you list in Agriculture and Infrastructure are so new, both in time since launch and concept that they are very hard to evaluate.

The First State Infrastructure fund especially may sound rather clever as an idea, but you could end up with broadly similar exposure using a different fund with a longer track record.

The two Emerging Market funds are quite different in what they are trying to do, and might be better used in conjunction with each other.

Again the JPM Natural Resources and Blackrock ML G&G are different from each other in many ways.

I don't necessarily think that in those two categories it is a straight choice between the two funds, as you will be taking on a substantially different exposure.

All these funds are high risk, and as a portfolio on their own extremely high risk.

Gold hasn't seen these levels in 30 odd years, and whilst the charts look good for it, there is a chance that there could be a significant reversal if some of the factors pushing the price up go away. Oil too, whilst on target to bust through $100 is held up on factors that could easily change overnight. Nothing is a sure thing in these markets.

I think all the funds you mention are a good idea to spread/mitigate risk in a decently balanced portfolio.

P.S. Sorry......that didn't help a lot in 'narrowing' down your choice

mr_fishbulb

purch wrote: »

All these funds are high risk, and as a portfolio on their own extremely high risk.

Yeah I know, but it's difficult to get a balanced portfolio when you're just starting off. The max I can put aside each month is £150, and the min seems to be £50 per fund. Plus all the high profile investments look more exciting

I'm balancing it with 3 years worth of cash in ISA and a medium-risk company contributed pension.

Buying bonds doesn't seem that attractive when they only pay slightly higher than cash, and property doesn't seem that safe at the moment.

Thanks for the tips - I'm going to read into the funds more today.

mr_fishbulb

MrMicawber wrote: »

The Eclectica Agriculture and the infrastructure fund are so new that they have no track record. If you are new I am a big fan of M&G Global Basics and might consider building a sum in here first.

Thanks - I'll take a look

egamar

Mr_Fishbulb - your attitude to risk in your portfolio is appalling. Exactly the same as mine was when I started!

I was lucky, I started in 02/03 when things were on the floor and any fool could have made money (this fool did, as you hopefully have seen in my email).

All of your favourite funds (that were around in 02/03) were mine too (and M&G Global Basics has been good to me too). But I don't think I'd be buying into them right now.

My approach in 02/03 was to have bought what had fallen least in the 'crash' just past. The current 'crash' (or correction or distortion or whatever) has driven some of your choice of funds high, not low and I - in my simplistic way - put that down to problems in specific areas (not the least being banking) rather than a general market-wide problem. Indian and Chinese demand have driven natural resources / miners up (and down, and up and down, but trending up) and that and 'flight to gold' in times of trouble has driven MLG&G high. Unless - as is quite possible - I'm talking through my a*se.

Private investors (you and me) apparently have an irresistible temptation to buy when things are high and have nowhere to go. If I were you I'd be either waiting for some stability to arrive and then making a judgement, or looking for something fundamentally sound that's fallen like a rock and is more likely to go up than are the funds that have already been driven high.

wombat42_2

I think you should ditch all the funds you have listed and go for top performing global funds.

1/ Neptune Global Equity - Has no constraints on sector or geography. Currently high on emerging markets and the Uk.
2/ Artemis Global Growth - More conventional with about 40% Europe and about 30% US.

Both are agressive funds but the two balance each other quite well as they have different investment philosophies. You can stick with them for the long term as the fund manager will adjust sector and geographical weightings for you over time.

Also worth considering are:
Gartmore Global Focus
Jupiter Global Managed

mr_fishbulb

egamar wrote: »

Mr_Fishbulb - your attitude to risk in your portfolio is appalling. Exactly the same as mine was when I started!

I was lucky, I started in 02/03 when things were on the floor and any fool could have made money (this fool did, as you hopefully have seen in my email).

Haha - cheers egamar Haven't been able to read the email yet (it's blocked from my work).

egamar wrote: »

If I were you I'd be either waiting for some stability to arrive and then making a judgement, or looking for something fundamentally sound that's fallen like a rock and is more likely to go up than are the funds that have already been driven high.

Very good advice, but finding an area like that would be the holy grail (and quite difficult for a new-starter like me).

Reading Merv King's comments at the moment, there might not be stability in the markets for a while. The 2 main falls (I can see in the news) seem to be banking and US property.

ramagel

wombat42 wrote: »

I think you should ditch all the funds you have listed and go for top performing global funds.

1/ Neptune Global Equity - Has no constraints on sector or geography. Currently high on emerging markets and the Uk.

I don't know about the ditching bit: but that one looks interesting - worth some research, methinks.

Aegis

ramagel wrote: »

I don't know about the ditching bit: but that one looks interesting - worth some research, methinks.

wombat42 seems to go throuhg phases of really liking certain funds. Until a couple of months ago he was raving about how great Gartmore's China Opportunities and Threadneedle's similar product were, to the point that he was essentially saying that people should ditch all other funds and invest exclusively in those.

He's now moved on to global funds. Nothing wrong with any of his funds during either of these fads that I can see, but he does seem to go after his current choices like a bull in a china shop (if you'll pardon the puns...). As such, it's no surprise to see him recommend ditching everything but those funds, but most savvy investors will realise that long term investing and diversity are the keys to avoiding disaster when the markets sour.

wombat42_2

ramagel wrote: »

I don't know about the ditching bit: but that one looks interesting - worth some research, methinks.

Neptune Global Equity has been a consistent top performer over the last 5 years and currently top performing global fund. A big reason i suspect is that it is hi in emerging markets.

http://www.h-l.co.uk/fund_research/security_details/sedol/3067905.hl

Has a higher risk profile than probably any other global fund but fund manager has good reputation and, as i understand it, the fund allocation is very dynamic for example it is currently high on emerging markets but maybe it a months time emerging markets allocation could get ditched altogether. Currently quite a lot on Russia as fund manager is expert on Russia and he feels its worth a good allocation.