How many Global Funds or IT's?

StellaN

In my ISA account I hold three of your brothers global funds, Bankers, Monks & Fundsmith. I also hold the OEIC equivalent of Edinburgh Worldwide which is Baillie Gifford Global Discovery. I also hold another global fund which is the Evenlode Global Income fund so I have 5 in total.

Sue58

Its all down to personal preference. For instance some members when posting portfolio's for critique tend to go for regional funds covering UK, USA, Europe, Japan, Asia, EM etc whereas others simply go for an all world tracker or choose a selection of global funds which is what your brother has decided is right for him.

At the moment I am still undecided as to whether selective regional funds or the global funds route is more effective....

MarkCarnage

I hold 6 global equity ITs between my SIPP, ISA and unwrapped portfolios.

I also hold a three wealth preservation/real return ITs, and one similar fund in my SIPP, three specialist ITs, two UK biased ITs and two income ITs, plus a gold exposure.

I hold Monks and Scottish Mortgage - the holdings overlap isn't huge, and the former is more diversified in numbers of holdings.

Getting a 'look through' asset allocation on that lot can be a bit time consuming, as some of the holdings aren't classified correctly by systems that claim to do this. However, I have a pretty good idea in my head as to what it is. Most ITs I hold tend to have relatively low portfolio turnover, as do I.

AnotherJoe

Sue58 wrote: »

At the moment I am still undecided as to whether selective regional funds or the global funds route is more effective....

I think regional funds are generally pointless nowadays because of the global nature of business.

So, invest in Korea, get Samsung, no doubt 95% of their business is outside Korea.

Invest in Switzerland, get Nestle, same story, invest in UK get "British" Petroleum, again 95% outside, invest in USA get Apple, etc etc etc. Might as well go with a global.

MarkCarnage

I think regional funds are generally pointless nowadays because of the global nature of business.

In some, probably most, cases I agree. Exception being small caps particularly in relatively closed economies.

Sue58

MarkCarnage wrote: »

I hold 6 global equity ITs between my SIPP, ISA and unwrapped portfolios.

I also hold a three wealth preservation/real return ITs, and one similar fund in my SIPP, three specialist ITs, two UK biased ITs and two income ITs, plus a gold exposure.

I hold Monks and Scottish Mortgage - the holdings overlap isn't huge, and the former is more diversified in numbers of holdings.

Getting a 'look through' asset allocation on that lot can be a bit time consuming, as some of the holdings aren't classified correctly by systems that claim to do this. However, I have a pretty good idea in my head as to what it is. Most ITs I hold tend to have relatively low portfolio turnover, as do I.

6 global IT’s - apart from SMT & Monks would you mind me asking what the other 4 global IT’s are?

bostonerimus

If you do hold several global funds or regional funds how do you select the percentage allocations? and how do you rebalance/manage the allocations through market cycles?

MarkCarnage

6 global IT’s - apart from SMT & Monks would you mind me asking what the other 4 global IT’s are?

Currently it's Alliance, Bankers, Brunner and Edinburgh Worldwide. I also hold Witan which I counted under equity income first time as it is in my SIPP drawdown portfolio, not really an income IT though yield is over 2%.

RIT Capital Partners is kind of halfway house between global IT and wealth preservation fund in my book.

Sally57

MarkCarnage wrote: »

Currently it's Alliance, Bankers, Brunner and Edinburgh Worldwide. I also hold Witan which I counted under equity income first time as it is in my SIPP drawdown portfolio, not really an income IT though yield is over 2%.

RIT Capital Partners is kind of halfway house between global IT and wealth preservation fund in my book.

In my OP I was wondering if my brother holding 4 global IT’s was too many but clearly not.

Surely with Bankers, Brunner, Witan & Alliance Trust there must be quite a bit of crossover or duplication? I’d be very interested in your point of view on this.

bowlhead99

Sally57 wrote: »

In my OP I was wondering if my brother holding 4 global IT’s was too many but clearly not.

Surely with Bankers, Brunner, Witan & Alliance Trust there must be quite a bit of crossover or duplication? I’d be very interested in your point of view on this.

Does it matter if there is crossover/duplication, if your goal is to capture the fund managers' best ideas and strategies to build a diversified set of holdings?

For example:
If Bankers thinks they should put 3% into Company A and 2% in Company B and 0% in Company C and 0% in Company D.
And Witan thinks they should hold 0% of Company A and 2% of Company B and 3% of Company C and 0% of Company D.

Then if you split your money 50:50 between both funds, you will get 1.5% in A, 2% in B, 1.5% in C, and 0% in D.

That is less in A but more in C than you would have got by just buying Bankers. And it's less in C but more in A than you would have got by just buying Witan. So following the sectors and themes that Bankers and Witan like to use, you will have a more diversified portfolio than if you just followed one or other of their strategies, and it might suit you better than just going all in on one manager, as different strategies and themes may have different relative successes while global sentiment and economies wax and wane over time.

What you would get by following those two strategies is something that avoids D, which might feature heavily in an index but which both Bankers and Witan agree should not form the bedrock of either of their strategies. Following the best ideas of a few managers whose strategy you believe appropriate, can be as much about avoiding certain companies or industries or themes as it is about including other certain companies or industries or themes.

Some will say that if you buy products from all the asset managers in a specific weighted proportion you will end up with something that, overall, tracks the market index while charging you active management prices for doing so, which is grossly inefficient. For that reason, I don't recommend you buy all the active managers' funds in a proportion which would give you that index-like exposure. Of course, picking four specific investment vehicles out of the 400+ funds and investment trusts in the Global Equity and Global Equity Income sectors does not come close to getting you the 'index' result.