What % of your portfolio are active vs passive funds?

cogito

100% active, carefully selected to avoid sectors that I don't want to be in - oil, extraction industries, banks and emerging markets

OldMusicGuy

About 5 years ago I had 100% active, as I didn't know about the likes of Vanguard et al.

As I learned more I decided to move largely to passive, a couple of years ago I was 85% passive with 15% in an actively managed income fund as I thought that would be a good way of providing some income in retirement.

However, I didn't like the way that was performing or being managed so sold it and went 100% passive, which is the way I will stay.

It may not have helped that I chose Woodford Income Focus as my active income fund. Maybe not the best example, but it highlighted for me the issue that I didn't like with with actively managed funds - you are betting on a fund manager.

cogito

Linton wrote: »

My active investments spread over 3 separate portfolios....

Shares and ITs:
Blackrock Frontier Trust
Chesnara
European Assets Trust
Fidelity Asian Values PLC
Jupiter European Opportunities Trust
New River Retail
Princess Private Equity
RIT
Ruffer Investment Trust
Worldwide Healthcare

Funds:
Artemis Global Growth I
Baillie Gifford Japan SC B
BMO US Smaller Companies C Inc
JPM Nat Res C
Jupiter Strategic Bond I Acc
L&G High Income Trust I Inc
Marlborough Special Situations P Acc
Premier Fortfolio Managers Global Infrastructure C Inc
Schroder Asian Inc Max Z
Schroder High Yield Opportunities Z Inc
Schroder Income Max Inc Z
Schroder QEP US Core Acc
Threadneedle Emerging Bonds I Inc
Threadneedle Euro Small Co Z
Trojan O Acc


I am not against passive funds. I am for appropriate funds to meet ones objectives and implement ones strategy. A fund's performance primarily depends on what it invests in. My strategy requires careful management of the portfolio asset allocation (what the funds invest in) with respect to geography, sector and company size for equities. This is not possible with market capitalisation (company size) weighted funds such as most of those based on indexes.

People with a different strategy or no strategy at all may decide on a different choice of funds and fund type.

That makes 25 different funds and ITs, some of which must be only about 2% of the total pot. I honestly don’t get that. Apart from the nightmare of trying to manage so many different investments, having less than 5% in anything can’t make a significant difference to overall performance. FWIW, I have five funds and two ITs and a handful of REITs.

neildt

bowlhead99 wrote: »

This implies there are some active funds that it's usual to have..

Maybe should of said 'popular'. Both Fundsmith and LT Global Equity have performed very well for me to date, whilst Baillie Gifford American has been volatile although am showing +15% now.

I have them in my ISA portfolio.

aroominyork wrote: »

I think any new investor's default strategy should be to go passive unless they have a good reason not to.

I agree to a point, but the reason I've selected these funds in particular Fundsmith and LT Global Equity is that they hold investments in companies I want to be invested in, and I;ve complimented these investments with some index trackers as well.

Filo25

SIPP 19% Passive

Work Pension 30% Passive

bowlhead99

cogito wrote: »

That makes 25 different funds and ITs, some of which must be only about 2% of the total pot. I honestly don’t get that. Apart from the nightmare of trying to manage so many different investments, having less than 5% in anything can’t make a significant difference to overall performance. FWIW, I have five funds and two ITs and a handful of REITs.

However, he has three pots for three separate and distinct purposes, allowing money to be fed from one to another periodically (income, growth, capital preservation? I can't remember exactly but he has a method).

Once you split the 25 funds over 3 pots (and pots have separate roles so you probably don't have a holding that is duplicated across the three pots) you are probably much less likely to have only 2% of a pot in a holding. It's more likely to be 5%+ of that pot, and as you say, if something is 5% of a strategy it can make a difference to overall performance.

You don't hear premier league football managers saying there's no point having this player because he's only 4% of a squad of 25. He might be 10% of the midfielders or 33% of the defensive midfielders.

*Edit - just checked, across my ISA and SIPP I have 9 emerging markets holdings (collectives, ie ignoring individually held stocks such as Tencent) - which some would find ridiculous. Some of those are single country/ region plays and a couple of others have quite a low weighting because I like their ideas but their track record is too short to give them a bigger piece, but I am willing to have a punt on a few thousand quid here or there. And yes I am comfortable that using multiple active funds in this area will not just 'give the same result as a passive but at higher cost', as the look through of holdings does diverge from the index

Linton

Thanks Bowlhead. I could not have explained it better, so I wont.

tin586

80% active, 20% passive.

On the active side, a few individual company shares and the following Investment Trusts:
AVI Global
Bankers
Law Debenture
Murray International
Scottish Mortgage
Witan

I do occasionally wonder to myself if I have just created an expensive tracker fund with the collection of Investment Trusts.

Linton

tin586 wrote: »

80% active, 20% passive.

On the active side, a few individual company shares and the following Investment Trusts:
AVI Global
Bankers
Law Debenture
Murray International
Scottish Mortgage
Witan

I do occasionally wonder to myself if I have just created an expensive tracker fund with the collection of Investment Trusts.

It is not clear what your strategy is as many of these seem to be global ITs with different but overlapping focuses (foci?):
AVI Global: High Japan and Europe(ex UK). Low US.
Bankers:Low US, high UK
Law Debenture:UK income
Murray International:High AsiaPac and EM, Low US
Scottish Mortgage: Average US, very low Japan
Witan:High in UK, low US

I suspect, but havent looked, that you would get similar different focuses in sectors and company size. So apart from you being not very keen on the USA it is not clear why you are choosing those investments.

These are in general funds where the manager has a particular approach. Either that approach is advantageous and compatible with your objectives/strategy or not. Just mixing them all up achieves nothing. You probably wont end up with a tracker with those funds but I doubt it is an allocation you woukld have chosen. I think you have 3 viable options:
- rely on one or two such funds whose approach you like.
- make your own allocations and buy niche funds to provide them
- go for a global tracker and let the market decide.

tin586

Thank you. A cull and/or a global tracker is what is in my thoughts.
Btw, my current passive exposure is overwhelmingly US.