Reducing Risk Level through Further Investment

RichestoRetire

Hey,


My portfolio is currently sat within the 'higher' risk sphere and I'm looking to invest further over the next twelve months but in the lower risk areas with a view to rebalancing the overall portfolio.


I like the idea of investing in lower risk income funds, gold and possibly bonds.



Do you have any advice on which income funds would be 'safe' (i.e: more geared towards capital protection than growth) and the best way to invest in global (I'm not interested in physically holding bars etc).


Finally, I'm a bond novice, is there somewhere you can point me to learn more about this area and/or some advice around reliable bonds (US Treasury etc)?



Thanks in advance

Thrugelmir

Portfolios should always be diversified. No particular market segment is ever going to outperform for ever.

What are your current holdings?

MaxiRobriguez

Assessment of risk is based on multi-decade norms, e.g: shares highest risk, bonds low, cash lowest. Emerging markets highest risk, development market low etc.

But we're in an environment whereby bond yields in developed markets are at record lows, some negative yielding, an central bank rates only an unexpected inflation surge away from rising.

Think about risk yourself, don't rely on what it says on the tin.

RichestoRetire

Current Holdings;

ASI Asia Pacific Equity Class I - Accumulation (GBP) - 4.6%
ASI Global Smaller Companies Class S - Accumulation (GBP) - 2.6%
Baillie Gifford Emerging Markets Growth Class B - Accumulation (GBP) - 7.8%
Barings Europe Select Class I - Income (GBP) - 6.3%
BlackRock Latin America Fund (Offshore) Inclusive - Class A2 - Accumulation (GBP) - 2.3%
First State Global Listed Infrastructure Class B - Accumulation (GBP) - 13.9%
HSBC GIF Russia Equity Inclusive - Class AD - Income (GBP) - 4.75%
iShares Pacific ex Japan Equity Index Class H - Accumulation (GBP) - 4.38%
JPMorgan Emerging Markets Class B - Accumulation (GBP) - 4.95%
Legal & General Global 100 Index Class I - Accumulation (GBP) - 2.72%
LF Woodford Equity Income Class Z - Accumulation (GBP) - 2.5%
Lindsell Train Global Equity Class D - Income (GBP) - 9.72%
Marlborough Special Situations Class P - Accumulation (GBP) - 2.94%
Schroder ISF Middle East Inclusive - Class A - Accumulation (USD) - 4.32%
Scottish Mortgage Investment Trust Ordinary Shares 5p - 16.84%
Stewart Investors Asia Pacific Leaders Class B - Accumulation (GBP) - 2.25%
Vanguard LifeStrategy 100% Equity Accumulation (GBP) - 6.99%

bostonerimus

What are the percentages in the funds and how did you develop this portfolio. One thing I'd do would be to vastly reduce the the number of funds to make it easier for you to see the allocation between various sectors and investment types and to rebalance

MaxiRobriguez

RichestoRetire wrote: »

Current Holdings;

ASI Asia Pacific Equity Class I - Accumulation (GBP)
ASI Global Smaller Companies Class S - Accumulation (GBP)
Baillie Gifford Emerging Markets Growth Class B - Accumulation (GBP)
Barings Europe Select Class I - Income (GBP)
BlackRock Latin America Fund (Offshore) Inclusive - Class A2 - Accumulation (GBP)
First State Global Listed Infrastructure Class B - Accumulation (GBP)
HSBC GIF Russia Equity Inclusive - Class AD - Income (GBP)
iShares Pacific ex Japan Equity Index Class H - Accumulation (GBP)
JPMorgan Emerging Markets Class B - Accumulation (GBP)
Legal & General Global 100 Index Class I - Accumulation (GBP)
LF Woodford Equity Income Class Z - Accumulation (GBP)
Lindsell Train Global Equity Class D - Income (GBP)
Marlborough Special Situations Class P - Accumulation (GBP)
Schroder ISF Middle East Inclusive - Class A - Accumulation (USD)
Scottish Mortgage Investment Trust Ordinary Shares 5p

Stewart Investors Asia Pacific Leaders Class B - Accumulation (GBP)
Vanguard LifeStrategy 100% Equity Accumulation (GBP)

What's the strategy?

You have BG EM, JPMorgan EM - why both? Why then also have funds for Latin America, Russia and Middle East?

VG Lifestrategy 100% equity, L+G Global Eq doing the same thing.

Woodford and special situations seem like they're picked at random.

Not sure what this portfolio is trying to achieve? Appears to dial up the risk and look for growth, but has picked a load of funds from a "high risk" basket at random.

RichestoRetire

Percentages now added Bostonerimus.



My idea was to add circa £60k-£80k in additional lower risk investments early next year to offset some of the higher risk elements of the current portfolio to rebalance.

RichestoRetire

MaxiRobriguez wrote: »

What's the strategy?

You have BG EM, JPMorgan EM - why both? Why then also have funds for Latin America, Russia and Middle East?

VG Lifestrategy 100% equity, L+G Global Eq doing the same thing.

Woodford and special situations seem like they're picked at random.

Not sure what this portfolio is trying to achieve? Appears to dial up the risk and look for growth, but has picked a load of funds from a "high risk" basket at random.

The initial idea was to seek circa 8% growth and that remains the aspiration (it's achieved it to date but I'm aware that such performance is in broadly positive market conditions).


The logic was for a wide geographical spread with specific punts on the middle east, latin america and russia.

bostonerimus

RichestoRetire wrote: »

The initial idea was to seek circa 8% growth and that remains the aspiration (it's achieved it to date but I'm aware that such performance is in broadly positive market conditions).


The logic was for a wide geographical spread with specific punts on the middle east, latin america and russia.

You have lots of overlap and seriously anything less that 10% allocation is pretty useless. Before adding to your portfolio you need to be reducing the number of funds first.

Alice_Holt

After rationalising your current holdings to eliminate unnecessary overlaps, you may wish to look at:
Personal Assets Investment Trust - https://www.moneyobserver.com/fund/Personal-Assets-Ord;
RIT Capital Partners - https://www.ritcap.com/:
Capital Gearing - https://www.moneyobserver.com/fund/Capital-Gearing-Ord
All three are multi-asset funds focused on wealth preservation.

Also consider a move from VG Life-strategy 100% equity to 80% or 60% equity.

Of course, holding cash (and not shifting it into S%S) would also provide an element of balance / risk reduction. You should measure your overall financial situation, not just the S & S portion.

RichestoRetire

Alice_Holt wrote: »

After rationalising your current holdings to eliminate unnecessary overlaps, you may wish to look at:
Personal Assets Investment Trust - https://www.moneyobserver.com/fund/Personal-Assets-Ord;
RIT Capital Partners - https://www.ritcap.com/:
Capital Gearing - https://www.moneyobserver.com/fund/Capital-Gearing-Ord
All three are multi-asset funds focused on wealth preservation.

Also consider a move from VG Life-strategy 100% equity to 80% or 60% equity.

Of course, holding cash (and not shifting it into S%S) would also provide an element of balance / risk reduction. You should measure your overall financial situation, not just the S & S portion.

Alice - this is really helpful - thank you.