Potential portfolio analysis

peterg1965

I've been working on a potential investment portfolio for my £190k pension drawdown pot - I will not be touching this part of my portfolio for at least 8 years. There are 7 funds in the portfolio, two passive and the remainder active. Five are Mixed Investment (2x 0-35% shares (35% of portfolio) , and 3 x 40-85% shares (55% of portfolio)) and two Global funds (10% of portfolio)
This is the X ray analysis - does it make sense for a 'moderate' risk 10 year plus outlook? Overall about 20% in Bonds/Fixed interest and the rest largely equities with a predominate UK/US focus.

Back tested against this years drop, it seems to have faired reasonably well, which may (or may not) bode well for any future perturbations in the markets.

bigadaj

Overall looks ok to me apart from the very large uk bias, I'd want to reduce the uk element to at least less than 20% and probably less than 10%.

Albermarle

bigadaj said:

Overall looks ok to me apart from the very large uk bias, I'd want to reduce the uk element to at least less than 20% and probably less than 10%.

Personally I would also be  concerned about the UK bias on the equities but not really concerned about any UK bias on the fixed income/bonds side . Maybe even a good thing.

[Deleted User]

Not a fan of backtesting over a couple of years.
The “sector” pie chart is confusing. “Equities” make up 3.7%? “Other” makes up almost 50%? 

What is “other” in the first pie chart? 

In general, this looks too complex and kinda pointless. If 5 out of 7 are active funds then tomorrow your splits could be different. You are putting your trust in fund managers, so x raying isn’t all that useful. 

dunstonh

How does it backtest over 2000-2003 or 2007-2009?

peterg1965

dunstonh said:

How does it backtest over 2000-2003 or 2007-2009?

Trustnet tool only allows you to go back max 5 years unfortunately.  However, most of the funds I have chosen were not around 10 years ago.
Here is the portfolio

Here is the 5 year backtest

BritishInvestor

You mention moderate risk but as the average return is in excess of LS80 I think many might question that.

bigadaj

Albermarle said:

bigadaj said:

Overall looks ok to me apart from the very large uk bias, I'd want to reduce the uk element to at least less than 20% and probably less than 10%.

Personally I would also be  concerned about the UK bias on the equities but not really concerned about any UK bias on the fixed income/bonds side . Maybe even a good thing.

UK gilts are listed separately to uk fixed interest which appears to me to have a big chunk of uk corporate debt, 

Linton

If you want to check the details of portfolio allocation I recommend you use morningstar rather than trustnet. Two problems with trustnet:
1) It doesnt have data on funds that dont pay to be included.  Morningstar's data is nearly complete. ( or perhaps more funds are prepared to pay Morningstar than Trustnet).  Trustnet tends to show large %s as "others" when they are really "dont know".  Morningstar "others" tends to mean real "others" like private equity which are not included in the main categories.
2) Trustnet seems to use the funds own description of the sectors.  For example in your printout you get 20.1 in North American Equities and 6.9 in US Equities.  Presumably most of the NA equities are US, it's just that the fund managers have different geographic categories.  Morningstar bases their allocation reports solely on their own standard categories.

Where trustnet excels is in its charting facilities.  These do allow you to go back up to about 30 years, at least for those funds which were around over that timescale.  So long duration backtesting is straightforward.

peterg1965

Thanks for all of the replies. I will check out Morningstar for the 20 yr + backrest, but it’s a mute point if it actually helps as most of the funds are relatively new.

I’m still not totally convinced I have the right portfolio yet, I have 6 weeks or so before I commit to it. It’s largely there, I do like the Mixed Investment funds but need to ensure I have the right mix and diversification and it matches my risk requirement.

hyperhypo

Peter, interested in your post as i have similar task to sort with an almost identical amount of savings in an ex works DC scheme, which i'm in process of transferring out to Fidelity. Can i ask why you are needing to commit within a six week window ? 
Also have a not dissimilar  mix ..although dominated by a single VLS40 fund rather than two, and the BG Managed Fund, plus the diversified version of the RL fund. 
Difference is that i will need to commence drawdown in 4 years time.
I'm aiming to simplify my short set of funds using a mix of cash, Blackrock MyMap 3 and vanguard VLS40 for short to medium term, and holding on to the BG Managed and the RL funds for longer term. 
If i'm being honest i don't really know what i'm doing with it..i have been tempted for time being to move the lot something like a Vanguard Target 2020, whilst i validate my strategy. With simplicity the key.
And as others have comented these broad mix of funds have a high uk bias.
I know what i'd like from it ....aspirational 3% commencing in four years time...but i've found making the transition from acc to inc 
much more difficult than i assumed.  I'd be prepared to pay for some advice too, but have been unable to find anyone , rather than wasn't wanting to take £2k as a gatekeeper to a Prufund, or tied to some other institution...willing to provide some transactional advice.
So interested to hear how you go ....