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How many funds in a portfolio?
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I hold 20 different funds and wondered if this was normal for the average investor.
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newbinvestor wrote: »I hold 20 different funds and wondered if this was normal for the average investor.
It depends on the amount you have invested and the strategy you are following but 8-12 is typical as that gives you at least one fund per major investment area. Larger values or higher risk portfolios may need a few more to access more specialist areas.0 -
How many are active and passive?
I only have one fund, a global index tracker.0 -
I have ten, with a portfolio value of mid 5 figures, which will no doubt get me into trouble with this forum for being too many, but I like to be able to overweight/underweight specific geographies or cap sizes.
I imagine most novice investors have fewer, and more experienced older folk than I with a bigger portfolio would have slightly more, although there will be always be one with an eight figure portfolio with it all in a VLS60.0 -
What is normal, what's recommended, what's enough and what's sensible might all be different.
There is a "professional" mantra that you need to slice and dice your portfolio to capture lots of different sectors. If people are interested in this they should read French Fama's work on the subject. Today an investor can get a diverse set of investments with a single multi-asset fund (active or passive) and with index funds you can be pretty diverse by just owning 3 or 4 funds...I reference noobinvestor and their one global equity index...although cap weighting is an often sited criticism of this approach.
Personally I have a 7 figure pension pot that is invested in just 4 funds (3 index trackers and an actively managed income fund). It keeps things simple and efficient and has a long term annual return of 8.5%.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
High 6 figure total investment split into 3 separate very different portfolios: 9/8/5 giving a total of 22 funds. All are managed with regard to allocation across asset type, geography, size, and sector0
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This is the classic " How long is a piece of string" questions.
It really depends on a number of things.
1. In my opinion 20 different funds is far to high for the average investor. Such a person should be able to do the job with just one low cost, well diversified global multi asset fund. At the most say 5 funds.
2. Warren Buffet I believe, states in his will, the money left to his wife should be:-
90% in a low cost fund tracking S&P 500 and 10% in US treasure bonds.
3. Lars Kroijer thinks you just need a 2 fund portfolio.
https://www.kroijer.com/
4. Bogleheads think you need a 3 fund portfolio.
https://www.bogleheads.org/blog/the-three-fund-portfolio/
https://www.bogleheads.org/wiki/Video:Bogleheads%C2%AE_investment_philosophy
https://financinglife.org/best-books-on-investing/bogleheads-guide-three-fund-portfolio/
5. Here you can take your pick from some off those that are well respected.
https://portfoliocharts.com/portfolios/
You pays your money and takes your pick. You can make investing as simple or as complex as you like.
I always go for the simple. That way you can easily keep track of what the portfolio is doing and monitor the share/bond split to control the risk. Also making sure there is no overlap between funds is easier.0 -
Linton, would you mind me asking what is the percentage split between your growth, income and WP portfolios?0
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2. Warren Buffet I believe, states in his will, the money left to his wife should be:-
90% in a low cost fund tracking S&P 500 and 10% in US treasure bonds.
Indeed, although if there are two people in the world who don't have to lie awake at night thinking about how to finetune their asset allocation, it's the Buffetts!0 -
High 6 figure total investment split into 3 separate very different portfolios: 9/8/5 giving a total of 22 funds. All are managed with regard to allocation across asset type, geography, size, and sector
I resolve this each new ISA year by adding my £40k (me and partner) and selling a few smaller holdings and buying a couple of new or existing equities.
I'm aiming to get down to about 20 equities etc, so no individual holding will be more than about 5-10% of the total value.0 -
MaxiRobriguez wrote: »I have ten, with a portfolio value of mid 5 figures, which will no doubt get me into trouble with this forum for being too many, but I like to be able to overweight/underweight specific geographies or cap sizes.0
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