Reducing Risk Level through Further Investment

Albermarle

Personal Assets Investment Trust - https://www.moneyobserver.com/fund/Personal-Assets-Ord;
RIT Capital Partners - https://www.ritcap.com/:
Capital Gearing -

From my own research and comments in other threads ; RIT is less good at capital preservation in a downturn than the other two, but of course then sees more growth in the upturn .

DrSyn

You can make investing as simple or as complicated as you like. But 17 funds!

1. Why so many funds to begin with?
2. Have you tried to find where there is overlap between these funds?
3. Do you know the percentage you have at the moment between shares and bonds?

My opinion is that you have way too many funds.

If you do not know the share/bond split you have at the moment, how are you going to gauge the degree of risk reduction when you start to add the new bond funds your portfolio.

For whats it worth I suggest one possible option.

First watch this:-

http://www.kroijer.com/

Then consider investing in low cost Global Multi Asset Fund at a level of risk rating you are happy with. Two which you might like to consider are these.

https://www.hsbc.co.uk/investments/isas/hsbc-global-strategy-portfolios/

https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds?intcmpgn=lifestrategyfunds_learnmore_link


Even if you make the global muti asset fund the core of your portfolio and then add another fund to give your portfolio a particular slant . That would be less complex, cheaper and easier to manage than what you have now.

Whatever you decide to do, a good start would be to reduce the number of funds in your portfolio.

Good Luck.

PS. If you are after capital protection look up the share /bond split for Capital Gearing (CGT) or Personal Assets (PNL). Then chose the share/bond split which is nearest to that in your chosen Global Multi Asset Fund .

Thrugelmir

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).

That's an overly optimistic expectatation. You'd have to be running a highly concentrated portfolio extremely well to achieve that.

aroominyork

bostonerimus wrote: »

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.

From the perspective of someone who (like boston) just holds three index funds that might seem fair, but for an active investor it is not. How would I have an appropriate allocation to UK or European smaller companies? In fact if I am not overweighting the UK and wanted a UK-specific fund how would I manage that at all? I have ten funds and 4% as my floor allocation.

bostonerimus

Thrugelmir wrote: »

That's an overly optimistic expectatation. You'd have to be running a highly concentrated portfolio extremely well to achieve that.

That might well be true in today’s and future markets, but a cap weighted 60/40 global portfolio would historically have achieved around 8%. In fact over the last 30 years my simple indexing and rebalancing approach as returned an average of almost 9% per year and I mostly did nothing.

bostonerimus

aroominyork wrote: »

From the perspective of someone who (like boston) just holds three index funds that might seem fair, but for an active investor it is not. How would I have an appropriate allocation to UK or European smaller companies? In fact if I am not overweighting the UK and wanted a UK-specific fund how would I manage that at all? I have ten funds and 4% as my floor allocation.

Slicing and dicing is a technique championed by French and Fama and there are good arguments that it can produce better returns that other approaches, but it takes a lot of work and analysis and the data and it’s interpretation is continually questioned . People that like it use funds like those offered by DFA.

Also while I have most of my money in just 3 index funds, I also own property, a deferred annuity and a couple of old multi asset funds one of which is the actively managed Wellesley fund. My portfolio management is now to just reinvest dividends and interest and I haven’t done anything else for the last 5 years.. The challenge with portfolios like the OP’s is to know what to do as simple rebalancing becomes less than obvious.

Alexland

This portfolio seems very complicated and you could tweak it endlessly and still never get it right.



I suggest you keep it simple with a multi asset fund or 2 fund portfolio of equities and bonds.

Alex

Thrugelmir

bostonerimus wrote: »

That might well be true in today’s and future markets, but a cap weighted 60/40 global portfolio would historically have achieved around 8%. In fact over the last 30 years my simple indexing and rebalancing approach as returned an average of almost 9% per year and I mostly did nothing.

We are talking about the future not the past.

If past history was all there was to the game, the richest people would be librarians.

Warren Buffett

RichestoRetire

Thanks to you all for your comments.


I have today sold a batch of the funds with a view to investing in a global world index fund as per Kroijer.


I will balance that with a capital preservation fund and a couple of personal slants.


Much appreciated.


PS: Would I be best off drip feeding the global world index investment or going all in?

Alexland

RichestoRetire wrote: »

PS: Would I be best off drip feeding the global world index investment or going all in?

Historical data suggests you would be better just investing the money. But you might get unlucky, who knows? If you are worrying about this then are you sure you want to experience the volatility associated with such a high equity weighting? Stock markets are like a roller coaster and you must not get off when things get scary

Alex