Adding active funds

Agile01

Hello all,
I started my investment journey over year ago and invested 100% into Vanguard global all cap.

Now I’m looking to add some active funds using this year ISA allowance:

Target portfolio:
50%: Passive (Vanguard global all cap)
50%: Active (
35%: Fundsmith Global equity
35%: LIndsell train equity
20%: BG global discovery
5%: BG Japanese small
5%: Marlborough UK micro cap)

Any feedback/criticism appreciated Cheers

AlanP_2

Why do you want to alter your chosen asset allocation / strategy? What are you aiming to achieve?

Alexland

I would stick with the All Cap fund rather than chasing things that have done well recently.

[Deleted User]

Your target portfolio equals 200%?

coyrls

No, the OP is showing the breakdown of the 50% active portion. That does mean that the 5% shown is actually 2.5% of the portfolio. I would suggest you would need at least £0.5M before you started thinking about allocating only 2.5% of your portfolio to an investment. I would like to see the asset allocation model used to arrive at the suggested allocations, I suspect, however, that there isn't one.

badger09

newbinvestor wrote: »

Your target portfolio equals 200%?

No.

50% of total investment will be passive = Vanguard Global all cap

50% of total investment will be active.

Of that active amount
35% will be Fundsmith
35% will be Lindsell Train
etc

Beaten by coyrls

MaxiRobriguez

coyrls wrote: »

No, the OP is showing the breakdown of the 50% active portion. That does mean that the 5% shown is actually 2.5% of the portfolio. I would suggest you would need at least £0.5M before you started thinking about allocating only 2.5% of your portfolio to an investment. I would like to see the asset allocation model used to arrive at the suggested allocations, I suspect, however, that there isn't one.

I hear this a lot, that until you reach a certain portfolio value there's no point holding small allocations.

Why not? If the charges are low and the person is adding to the allocations over time what's wrong with that approach?

It may make sense for more novice type investors, who typically have the lower volume of cash, to invest in a global index tracker to stop them making poor allocation judgements, but that is a concern of experience, rather than value.

Agile01

AlanP wrote: »

Why do you want to alter your chosen asset allocation / strategy? What are you aiming to achieve?

I'm looking to invest for another 20 years, trying to get more exposure to small cap through active funds.

Thrugelmir

MaxiRobriguez wrote: »

I hear this a lot, that until you reach a certain portfolio value there's no point holding small allocations.

Impact (positive upside) on portfolio is minimal.

coyrls

MaxiRobriguez wrote: »

I hear this a lot, that until you reach a certain portfolio value there's no point holding small allocations.

Why not? If the charges are low and the person is adding to the allocations over time what's wrong with that approach?

It may make sense for more novice type investors, who typically have the lower volume of cash, to invest in a global index tracker to stop them making poor allocation judgements, but that is a concern of experience, rather than value.

If there are no transaction charges, then it could make sense but otherwise the transaction costs associated with purchases and rebalancing would start to be significant. There's also a question of whether the absolute (as opposed to percentage) return on small allocations are worth the hassle of managing a portfolio with a large number of holdings.

Agile01

Alexland wrote: »

I would stick with the All Cap fund rather than chasing things that have done well recently.

Agree, these active funds have done well recently and for last few years


If someone willing to accept risk and have 50% active portfolio then these 4 funds doesn't diversify enough globally except EM.