Uk Allocations

learningmoneybasics

Hi,
1st post here, although I have been reading the forums a while and have gained a lot of information. I do have a question to ask or to seek views of others:

When people mention the Vanguard Strategy range of funds it's often commented on how they have a high UK allocation and the others, ie HSBC Global Strategy have an allocation more aligned with actual global weightings. Is there an ideal UK allocation or do you have any preferred number? or is just a case of go with whatever the fund allocates?

I've only got two funds split as below:

HSBC Global Strategy Balanced: 70%
Baillie Gifford Managed: 30%

This gives me, according to Morning Star, around 11% UK and I was wondering is this too much or too little? Or is this another of those "down to personal preference and there is no real right or wrong answer only hindsight will tell" type of questions?

dunstonh

I've only got two funds split as below:

HSBC Global Strategy Balanced: 70%
Baillie Gifford Managed: 30%

BG Managed being higher risk. Was your split for that reason?

I was wondering is this too much or too little?

What is your opinion? (remember everyone else posting in response will have their opinion but there is no right or wrong here).

learningmoneybasics

Hi Dunstonh,

The split was to add a little extra risk to the profile and increase the UK weighting a bit.I did wonder if its one of those subjective questions. I was aiming for 10-12% as I felt one was too high and the other two low so aimed for middle ground.

Linton

IMHO:


There is no ideal number for allocations. It depends on strategy, objectives, personal preference and no doubt other things. Using somewhat arbitrary numbers I would question anything above 25% or below 5% for a UK allocation. Between the two one should be able to justify the allocation against an overall strategy. For example if one is going for Small Companies or Income the UK has historically been a good place in which to invest. On the other hand if one is focussed on the world market generally the UK represents about 6%.

bostonerimus

How long is a piece of string? Just stay within spitting distance of the UK''s global weighting. A global multi asset fund will do that for you so while people will discuss the allocations of different multi-asset funds the biggest factors in whether you meet your financial goals is your own behaviour, not a few percentage points difference in sector allocations. So make sure you keep making contributions and you have a plan to help you through the inevitable drops in value.

Thrugelmir

Only hindsight will tell. That's the challenge of investing. Take your pick from Brexit, the US heading for recession, the FED recommencing QE, China growth being downgraded, flagging global growth, pronounced slowdown in Europe........ More red flags than positive signals. Might be the most volatile trading markets in some time.

There again the clouds might blow away and the sun shines over a tranquill sea.

learningmoneybasics

Thank you all for the comments. It took a while to find the fund mix and allocation I'm happy with. Not knowing where my comfortable levels are etc. Last years dip was a good test for both funds and I was comfortable with the the way they reacted, which was a good test for me as well.

I started investing a couple of years ago now and that's when I found this board so learnt a lot along the way. I think at some point there can be too much info out there and then the temptation to "tinker" sets in as you doubt yourself and start thinking "is this too much or too little" or "should I be invested in A, B, C etc etc" based on an article found on the internet. Oddly, when I was on a % based platform the temptation to tinker was always there as there was no buying or selling fee since moving to a flat rate platform I always think would buying & selling be worth the fee? So I'm became less inclined to swap and change.

Sometimes I think you learn a lot about yourself not just investing.