Woodford Equity Income

RobStaffs

I have been downsizing my investment in this fund for some time. I have now come to the conclusion to pull out all together and switch to another fund/s. I have around £16k to get rid of but I want to spread it over a range of funds. I have particular favourites which normally include

Stewart Investors Asia Pacific Leaders Acc
Vangaurd Life Strategy 40% equity
I Shares Japan Equity Index Class H Acc
Jupiter India Class X
Malborough Special Situations
Stewart Investors Asia Pacific Leaders Acc
LT Global Equity Class D Inc
Vangaurd Life Strategy 80% equity
First State Global Infrastructure


In recent years I have been switching increasing my exposure to trackers but I still invest in Active Funds as well. The Jupiter India Fund is not performing very well at present but I think this is one for the longer term so happy to continue with this. I am 54 so have to invest in medium risk to high risk funds as I have sufficient cash savings in place. Any ideas ? I am more than happy to pick out a new fund all together.

AnotherJoe

Why have you got VLS 40 and 80 ??

If looking for ideas for long term hold, Ive just been looking at so-called alternative energy investments since I believe in that timescale they will be the mainstream and oil coal gas will be the "alternative" ones. A lot of money being spent in this area. Check out TRIG and INRG amongst others.

RobStaffs

AnotherJoe wrote: »

Why have you got VLS 40 and 80 ??

If looking for ideas for long term hold, Ive just been looking at so-called alternative energy investments since I believe in that timescale they will be the mainstream and oil coal gas will be the "alternative" ones. A lot of money being spent in this area. Check out TRIG and INRG amongst others.

Cheers for that. Sometime ago I switched from a number couple of active funds in the Mixed Investments 20-60% and bundled them all into the VLS 40%. A couple of weeks ago I sold some of my Woodford Portfolio and split it over two or three higher medium risk funds including VLS 80%.

AnotherJoe

Might you as well just have VLS60 ?

RobStaffs

AnotherJoe wrote: »

Might you as well just have VLS60 ?

I chose the 40 as part of balancing out my risk profile. The 80 was recommended. I didn't chose the 60 as it was probably too similar to the 40. Hope I am making some sort of sense :rotfl:

AnotherJoe

RobStaffs wrote: »

I chose the 40 as part of balancing out my risk profile. The 80 was recommended. I didn't chose the 60 as it was probably too similar to the 40. Hope I am making some sort of sense :rotfl:

Not really . If you have the same amount in 40 and 80 each, thats literally identical to having double that amount in 60. eg £10k in 40 and £10k in 80 will give you the same results as £20k in 60. Now you probably dont have the exact same amount so you might actually have teh equivalent of (say )VLS 49 or VLS 73 or whatever.

Add the relative proportions of both and halve.

RobStaffs

AnotherJoe wrote: »

Not really . If you have the same amount in 40 and 80 each, thats literally identical to having double that amount in 60. eg £10k in 40 and £10k in 80 will give you the same results as £20k in 60. Now you probably dont have the exact same amount so you might actually have teh equivalent of (say )VLS 49 or VLS 73 or whatever.

Add the relative proportions of both and halve.

To be honest I have 10 times the amount in 40. Are you saying its pointless having money in both even though they are in different sectors?

AnotherJoe

Then you effectively have VLS 44 So there's really little point in having teh VLS80 you might as well put it somewhere else.

Don't know what you mean by "in different sectors". They have exactly the same underlying investments merely with different proportions of equities to bonds,VLS40 has 40% equities and VLS80 has 80% of the exact same equities. Same for bonds but obviously 60/20 ratio.

bowlhead99

RobStaffs wrote: »

To be honest I have 10 times the amount in 40. Are you saying its pointless having money in both even though they are in different sectors?

The point is, they are not really in different sectors.

Each of them is x% in global equity indexes and y% in global bond indexes, with a quarter of the global equities being UK stockmarkets and three quarters being non-UK stockmarkets. The only thing that's different is the ratio of x to y.

In the VLS 80% equity, the x is 80. In the VLS 40% equity, the x is 40; but the other ratios (what type of equities, what type of bonds) are the same as they are in the 80 product.

So the point is, if you have £1000 of VLS 40 (£400 equities and £600 bonds) and £1000 of VLS 80 (£800 equities and £200 bonds), you might as well dump them all and buy £2000 of VLS60 because that would give you pretty much the same ratios of everything on the overall £2000 (60% of global equities and 40% global bonds gives £1200 equities and £800 bonds)

If you have a massive amount more in one fund than the other then it is not quite so simple. For example £1000 in VLS80 and £15000 in VLS40 gives £6800 in equities (42.5%) and £9200 (57.5%) in bonds. But that is not much different from just having it all in VLS40. As you are not building your portfolio to a recognised model, just slapping funds together in the proportions you feel like, and you have a bunch of other funds from other providers in your mix as well, there is probably no point in using two VLS funds together in proportions to create a blended equity allocation of the total VLS money of something specific like (e.g.) 42.5% ; you could just use the 40% fund and be 'close enough'.

bowlhead99

RobStaffs wrote: »

I chose the 40 as part of balancing out my risk profile. The 80 was recommended. I didn't chose the 60 as it was probably too similar to the 40. Hope I am making some sort of sense :rotfl:

The 80 was recommended for people who want the risks of 80% in equities and 20% in bonds

By contrast, the 40% is suitable for people who want the risks of 40% in equities and 60% in bonds

Wanting to have simultaneously 80% in equities and also only 40% in the same equities (with the other side being only 20% in bonds but at the same time 60% in the same bonds) does not make a lot of sense.

RobStaffs wrote: »

The Jupiter India Fund is not performing very well at present but I think this is one for the longer term so happy to continue with this.

What it has done in the short term is largely irrelevant to what it will do in the longer term. Over the last five to eight years it has done similar to a rival fund I use JPM India Investment trust; both have done better than the average global emerging markets fund, as India's markets have done better than others.

If you want it as a small part of your portfolio that's fine, as long as you're willing to take heavy paper losses from time to time - maybe up to 75% in a big crash. The JPM one I have lost 60% in less than a year, back in 2008, but did better than a number of rivals (Jupiter India wasn't going at that time and missed the start of the crash).

I note that a third of the companies held by the Asia Pacific Leaders fund are India listed so even if you did want some sort of tilt towards India in your portfolio, you already have it via that fund.

bowlhead99

On your Woodford question:

RobStaffs wrote: »

I have now come to the conclusion to pull out all together and switch to another fund/s. I have around £16k to get rid of but I want to spread it over a range of funds. I have particular favourites which normally include
.
.
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Any ideas ? I am more than happy to pick out a new fund all together.

The Woodford fund is focused on equities listed in the UK, and was originally billed as targeting a high level of income alongside capital growth. Whereas your 'particular favourites' are not focused on equities listed in the UK and do not target a high level of income. So they are aiming to do something completely different from what the Woodford fund was aiming to do.

If you want to change the £16k of Woodford fund for something else because you no longer have confidence in using Woodford for a strategy of achieving a high level of dividends from mostly UK equities, but you still want to invest in a fund that aims to achieve a high level of dividends from mostly UK equities, you would look for a UK equity income fund. There are several which could fit the bill.

However, if you want to change the fund for a different one because you no longer want a UK equity income fund at all - because you have decided to invest much more globally rather than on a region-specific basis, e.g. Lindsell Train Global, Global Infrastructure, Vanguard Lifestrategy etc - then you would not be looking at a UK equity income fund but instead be looking at a whole different sort of global equities fund.

At the moment your 'particular favourites' is a confusing mix because it is partly global (V LS, LT Global, Global Infrastructure) and partly regional specialists in certain regions (Japan, Asia Pacific ex-Japan, UK special situations) but some areas not having regional funds (e.g. Europe, US, non-Asian emerging markets). So it is difficult to know what you are trying to achieve, and without any stated objectives or knowledge of what proportions your portfolio currently holds, nobody can really recommend anything.

Our recommendations of something that might fit the bill, as total guesswork on our part, would be like you previously having VLS 80 'recommended' to you (which sounds like it would fit the bill for medium risk to high risk funds) when it is clear from what you hold that you did not actually want a portfolio that holds what VLS 80 holds and so you decided just to put some token small percentage of your assets in it while leaving all the other funds that you like which do totally different things.