MUSINGS OF A NEWBIE

natsplatnat

Can anyone shed any light on the funds available from Openmoney? I Really do not want to go through their financial review online just to see what they offer. If this info is available on their site and I have just missed it I apologise in advance.

Ps, looking at them simply because their 'do it for me' investment has the lowest fees (according to MSE).

natsplatnat

Okay, so my research continues (also, I have the portfolio details from OM).... and I have a few more questions / thoughts in relation to S&S ISAs....

• why are funds generally so heavily focussed on North America?
• If there are thoughts that the UK market is under-valued should I be looking for a higher % there?
• Is a larger % in North America the 'riskiest' bit of the fund if the thought that is that market is potentially over-valued?
• Would having a similar fund for ISA and pension be a good/bad idea (I definitely want an ISA so there is the potential for access if absolutely needed - I do have separate "emergency+" savings)?
• What is the general thoughts about Region Allocation in Japan? Is 8-9% usual?

Sorry to bother you all - but I read up on one area and then get distracted / interested by another (and then another) and I am just overloading my (poor little) brain with info.

Alexland

Sorry I don't know much about what Open Money are offering you but here goes:

why are funds generally so heavily focussed on North America?

Most portfolios are weighted by capitalization (stock market size) and as you can see from the below out of date graph the US has been a large market within the developed world for the last 100 years. It's just home to lots of large-cap companies that operate globally like Microsoft, Google, etc.

If there are thoughts that the UK market is under-valued should I be looking for a higher % there?

Yes some companies in the UK market seem undervalued (and I am selectively overweight on UK around 15% compared to around 5% global cap weighting) but there are some large UK companies with structural issues although this pandemic has shaken some of them down.

Is a larger % in North America the 'riskiest' bit of the fund if the thought that is that market is potentially over-valued?

You are getting the hang of this - yes valuations in the US look steep at the moment but then some of the highly valued companies are already very successful with good growth records. By having some home UK bias it dilutes the US exposure.

Would having a similar fund for ISA and pension be a good/bad idea (I definitely want an ISA so there is the potential for access if absolutely needed - I do have separate "emergency+" savings)?

It depends on your objectives for each account. I prefer to have an income tilt in our ISAs as it's reassuring to have a smoothed flow of regular dividends that we can access if required. Global passive trackers tend to have a growth tilt because that's what has done well recently.

natsplatnat said:

What is the general thoughts about Region Allocation in Japan? Is 8-9% usual?

Probably more like 7% of the equities if going for a portfolio containing both developed and emerging markets.

natsplatnat

Alexland said:

Would having a similar fund for ISA and pension be a good/bad idea (I definitely want an ISA so there is the potential for access if absolutely needed - I do have separate "emergency+" savings)?

It depends on your objectives for each account. I prefer to have an income tilt in our ISAs as it's reassuring to have a smoothed flow of regular dividends that we can access if required. Global passive trackers tend to have a growth tilt because that's what has done well recently.

Thank you! It is good to know that my thinking isn't completely wrong. Whilst I am not risk-adverse, I do like to (at least feel) like I have an understanding.
With regards to the S&S ISA, I am just looking to potentially return more than savings. Looking at my pension it is 44% USA, 11.4% UK with the other usual suspects in there. I am starting to shy away from the OM options as they are pretty similarly weighted to my pension and I think the ISA could be different. There is a fund that is 22% UK, 20% Global, 17% EM and 14% US. Now I am wondering if this is too bigger swing the other way and I should just plump for something in the middle? I mean, 2.5% growth is well above any other interest rate currently.
Grrr, at this rate I will be retired (many years off yet!) before I feel like I can make a decision. 
Can you change your investment 'fund' within your ISA easily enough?

Alexland

natsplatnat said:

Can you change your investment 'fund' within your ISA easily enough?

Depends on the provider. If starting off with a new S&S ISA it's worth considering Vanguard Investor as their platform fee is very low at 0.15% and the index tracker or multi asset funds you might be using would generally cost under 0.25% so less than 0.40% total.

Vanguard have an all in one LifeStrategy multi asset fund series with a range of different equity/bond ratios which tend to have around 25% UK equity bias or pure global trackers such as their FTSE Global All Cap which has around 5% UK exposure and could be mixed in with a bond fund such as their Global Bond Index Hedged. You could even mix in a custom ratio of UK exposure with their FTSE All Share tracker although I am not a fan of index tracking the UK market but still for £100 per month it's probably good enough for what you need to get started.

Here are some links to the funds I mentioned

https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds

https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-acc

https://www.vanguardinvestor.co.uk/investments/vanguard-global-bond-index-fund-gbp-hedged-acc

https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-uk-all-share-index-unit-trust-gbp-acc

natsplatnat

Thanks... again! I've had a quick look and will dedicate some time over the weekend to having a proper look. 
I have also been tempted by some of the fund options from Wealthify. Anyone got any views on them?  I feel like a kid in a sweet shop right now... too much choice!!

natsplatnat

Just as a little side thought - I am looking at having a little 'fun' dabble in trading... Minimal monthly amount until I feel like I have got to grips a bit with it. Like many others I was looking at T212 for this, but they currently have a wait list to join. I have a couple of other platforms earmarked (all 'free' - yes I understand they are not actually free but with a small dabble I don't want to pay 'fees'). I have a 'watch list' of shares that have caught my eye over the past month or so, but I am struggling to find a platform where they are all / majority of them are available to trade.

Here's a few that I can't locate....

GRWG

JRV.AX

1VY.MU

I am guessing I have missed a fundamental and very basic bit of info and that is why I am struggling!!

AlanP_2

I am guessing I have missed a fundamental and very basic bit of info and that is why I am struggling!!

TBH I think you are struggling because you are over-thinking it and attempting to cover every base known to man from long-term investements all the way through to day trading at the same time.

Eat the elephant 1 bite at a time.

Write a simple 4 or 6 step plan for the next 12 months that covers what you want to do in priority order and work on No. 1 and leave No's.2-6 until No.1 is complete.

PS - Personally trading would be No. 999 on my list but each to their own.

Alexland

Yes I don't understand how the commendable ambitions to build wealth for retirement at the start of the thread have lead us to the sordid depravity of gambling money on day trading. Sounds like you have taken the wrong path on the journey so trace back a few steps and try again. Some of these platforms are like the casinos that give free drinks - best avoided.

Thrugelmir

natsplatnat said:

 I feel like a kid in a sweet shop right now... too much choice!!

The novelty at some point will wear off. Emotional detachment is a useful skill to master.  Boring investments are generally the place to start. A few people get lucky. The vast majority don't.