3 questions

gudda96

3 questions

1- is this a good spread for my portfolio of funds
SMT 12.5%
FS 12.5%
LTGE 12.5%
LS 80/20 12.5%
VAN PAC ex JAPAN 12.5%
L 7G HEALTHCARE 12.5%
VWRL 12.5%
CASH 12.5%

2- BEST fund/TRUST for the cash

3- am I better with all in LS 80/20

Prism

I have had many of those funds over the years so looks fine for a start

I keep cash out of my investment accounts but otherwise you could always use a money market fund

I prefer a mix of active funds and passive funds

Lomcevak

I guess my only comment is that the equal percentage mix of very broad trackers (VLS80, VWRL) with some quite specific funds (L&G Healthcare, PAC ex-JAPAN) is a bit unusual and probably pushes the risk quite hard. Just talking 12.5% VWRL + 12.5% Pacific-ex-Japan pairing, that's half-everywhere, half very overweight on one small region. What's your goal here?

As for "am I better with all in LS80/20", it's hard to say because it depends what you want. Personally I go for that sort of approach - e.g. my S&S ISA is 65% VWRL, 10% VFEM, 25% global bond tracker, and the only reason I avoided VLS is the UK-overweighting - but it's personal preference really.

badger09

What are you trying to achieve?

How much is involved?

gudda96

Thanks guys...

Lomcevac

Quite detailed reply which I appreciate but in MY ignorance, am a bit confused, which fund(s) do you think carrry the risk you imply.

What/why I am want is as follows>>>

I am an active 78 yr old and "her to be obeyed" id 76 and we dont have a massive income, but get by adequately, so our capital has 2 requirements.

1- to retain value for obvious reasons and to leave to kids.
2-to take income whilst doing no 1, and rather than look for income/dividends, I take any growth profit at the appropiate times.

I must admit, I am guilty of checking daily as I enjoy it, but at the same time, I would like to be in the position of being able to sit back more knowing its safe and sready.

BTW, I was notified of replies, have I not ticked something to activate same, or must I visit forum.

gudda96

What are you trying to achieve?

How much is involved

Badger

First quested answered in my reply to Lomcevac and I think amount is irrelevant really, no offence of course.

Appreciate reply

Lomcevak

Quite detailed reply which I appreciate but in MY ignorance, am a bit confused, which fund(s) do you think carrry the risk you imply.

Allocation gets a bit philosophical, but there are two broad views. One is that you have no edge and can't beat the market, so you are best off buying a very broad tracker at the lowest cost possible, and accept that you'll approximate broad market returns. If you go for this "buy the world" view, then things like VWRL or VLS80 are a pretty good bet, with the equity/bond ratio in the VLS funds reflecting risk attitude - conceptually high equity/low bond is generally higher return, higher variance, low equity/high bond is lower return, lower variance. Actual performance varies, of course

The other view is that you can beat the market with asset allocation, so by weighting allocations in one direction or other (depending on your allocation strategy) you hope to do better than the broad market. Conceptually specialized sectors carry higher risk, along with the potential for higher returns. As an example, you'd have done very well from picking a single-sector tech fund in 1996 and selling in early-2000 but very badly if you'd gone all-in in early 2000 and sold post-crash in 2001. Although the broader market also slumped in 2001, declines were less extreme than the tech sector crash.

So buy buying Pacific-ex-Japan or Pharma, you're putting a heavy bet on small sectors doing well, in the hope that they outperform. That's fine, but carries risk. Buying a global tracker accepts you'll never do better than market average (minus fees and tracking error, etc.), but your downside is somewhat reduced (absent a global recession).

A third option is to go mostly global, but supplement with smaller allocations to sector-specific funds, e.g. small-cap, or tech, or gold, or whatever. That's quite common, and can be done for a number of reasons - both to broaden diversification and to bias allocation in certain directions.

So what looks odd to me is that you've picked a common set of well-liked funds, but they're a mix of global and sector-specific, with all equally 12.5% weighted. That seems neither one way or the other, and very light on bonds. Hence wondering what the goal was.

Aminatidi

You're heavily in equities so large drawdowns are quite possible.

Nothing wrong with that if you're aware of it and know you have the nuts to sit it out but you did mention "safe and steady".

The amount is relevant maybe not as a "cash" amount but in so much as if it's your life savings that's different to if it's money that you truly can afford not to need to care or worry about for the foreseeable future.

Let's say it's £100K.

Happy to wake up in a years time and be looking at £50K?

Lomcevak

Let's say it's £100K.

Happy to wake up in a years time and be looking at £50K?

I agree with the point, but would add the time factor - if you wait it out, the market has historically recovered (although you might have a "lost decade" or so to wait), so equity-heavy is ok if you are looking long-term and don't need the money any time soon.

If you will need the money, or if you might panic and sell out at the bottom (noting you say "I must admit, I am guilty of checking daily as I enjoy it") then equity-heavy is a risky place to be.

DrSyn

As I understand it you are 78 and interested in capital preservation.

Your portfolio has a large share element in it. Are you prepared for the large up and down swings in share price that can be expected from this portfolio. People often think they are but it can be very scary during a bear market.

For your age and stated objective would not a global multi asset fund(conservative or balanced) be more suitable?

Have you considered Capital Gearing Trust PLC (CGT) with its stated aim of wealth preservation as part of your portfolio.

I would think these would be more safe and steady than the portfolio you have shown.

gudda96

Hi Guys
Thanks for a good response, let me try to clarify and create my profile to help you advise me.

Its far lower than £100k
As I said, when I see growth, and time is right, I take profit (for income)
I like Vanguard for their low cost, and good to deal with
I bought L & G (right or wrongly) based on populations of old people growing
Have always liked FS
LTGE gets rave reviews on Citywire forum
I hear contradiction (not here)like spread into many funds, then LS80 is good enough to have it only

Any scaling down you can suggest, and the reason, I will listen to, thats why I am here.