Ways to de-risk portfolio?

nick1234

Hi

I currently have a S+S account which is very heavy in EM Equity Funds and “exotic” sectors e.g. Turkey ETF/Gold/Russia/Small caps etc, which have done well but I am looking to diversify to reduce the risk.

I have no exposure to US, EU or UK apart from a few UK shares, having sold US Trackers last year. Is it worth investing in these eg US/EU – I realise they are also equities so can be volatile, or an EM Govt bond, like one below?

https://www.vanguardinvestor.co.uk/investments/vanguard-usd-emerging-markets-government-bond-ucits-etf-usd-distributing?intcmpgn=fixedincomeemerging markets_usdemergingmarketsgovernmentbonducitsetf_fund_link

http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000OYJR

thanks

BananaRepublic

The obvious answer is to move out of EM and exotic funds and into funds or bonds in Europe and the UK, and maybe the US. Lots of money has moved out of UK markets and funds over Brexit, so some argue that the UK is a good buy. Obviously bonds will be lower risk, and lower returns in the long run.

EdGasketTheSecond

BananaRepublic wrote: »

The obvious answer is to move out of EM and exotic funds and into funds or bonds in Europe and the UK, and maybe the US.

Out of the frying pan and into the fire then?


You can de-risk by realising the gains and taking your money out. Bonds are extremely high risk at the moment. Gold is good 'insurance'. You could use a gold or gold-mining ETF such as SGLN or SPGP.

kcrane

I have VEMT, only got in recently so not much experience to report. I like the low cost and the monthly income. Also chosen in order to diversify from equities and corporate bonds.

Thrugelmir

EdGasketTheSecond wrote: »

Out of the frying pan and into the fire then?

Foreign investors have been net sellers of US shares in the past year or so.

Voyager2002

You might consider investing in Infrastructure, and possibly sections of the energy sector. Look for collective investments (eg Investment Trusts) with low volatility

jamei305

Thrugelmir wrote: »

Foreign investors have been net sellers of US shares in the past year or so.

They must now be good value then


I'd start off by ditching the Turkey/Russia stuff, then review your whole portfolio. Why hold a big chunk high-risk equities alongside gold and bonds but no middle ground?