Rebalancing portfolio

Aged

bostonerimus said:

masonic said:

Aged said:

There were 10 holdings. Woodford accounted for 1/10th of the portfolio. 4 x equity funds accounted for 40% - all UK. Fixed Interest 20%. UK Property 10%. Cash 10%. Mixed Investments 20%. This is just one step - I'm trying to get some more equity income rolling in, and to get away from being too heavily reliant on UK equity income. 

So from 40% equities, all UK to 10% global, 30% UK. That's a step in the right direction, but the proportion of companies listed in overseas markets paying a high dividend is considerably more limited, so it may make more sense to go global with a more general fund.

I think it should be closer to 10% UK and 30% Global Equity...probably even less of a UK weighting. I'd take this opportunity to reduce the number of holdings. Is it really necessary to have 3 or 4 x UK equity funds?

I did think about reducing the number of holdings, but on reflection I decided to stick with it. It keeps the size of each holding at a good size ie not too small, but not so big that I might worry about fund houses collapsing etc! I guess it suits my cautious nature. It would make things much simpler with fewer funds though, so I will definitely think seriously about that going forwards.

Aged

Hmm, some responses seem to have been deleted. I presume it's because someone recommended a fund and that's not allowed? 

masonic

Aged said:

masonic said:

Aged said:

There were 10 holdings. Woodford accounted for 1/10th of the portfolio. 4 x equity funds accounted for 40% - all UK. Fixed Interest 20%. UK Property 10%. Cash 10%. Mixed Investments 20%. This is just one step - I'm trying to get some more equity income rolling in, and to get away from being too heavily reliant on UK equity income. 

So from 40% equities, all UK to 10% global, 30% UK. That's a step in the right direction, but the proportion of companies listed in overseas markets paying a high dividend is considerably more limited, so it may make more sense to go global with a more general fund.

Can you explain what you mean by 'more general' please? 

Equity income funds focus on companies paying a high dividend. That means you're missing out on a fairly wide cross-section of global companies.

masonic

Aged said:

Hmm, some responses seem to have been deleted. I presume it's because someone recommended a fund and that's not allowed? 

People can delete their own posts if they realise they've posted to the wrong thread, or repeated something already mentioned. I don't think the forum team are that fast!

Aged

masonic said:

Aged said:

masonic said:

Aged said:

There were 10 holdings. Woodford accounted for 1/10th of the portfolio. 4 x equity funds accounted for 40% - all UK. Fixed Interest 20%. UK Property 10%. Cash 10%. Mixed Investments 20%. This is just one step - I'm trying to get some more equity income rolling in, and to get away from being too heavily reliant on UK equity income. 

So from 40% equities, all UK to 10% global, 30% UK. That's a step in the right direction, but the proportion of companies listed in overseas markets paying a high dividend is considerably more limited, so it may make more sense to go global with a more general fund.

Can you explain what you mean by 'more general' please? 

Equity income funds focus on companies paying a high dividend. That means you're missing out on a fairly wide cross-section of global companies.

OK so something where the objective is something like 'income and capital growth' rather than income only (or growth only).

LHW99

Aged said:

bostonerimus said:

masonic said:

Aged said:

There were 10 holdings. Woodford accounted for 1/10th of the portfolio. 4 x equity funds accounted for 40% - all UK. Fixed Interest 20%. UK Property 10%. Cash 10%. Mixed Investments 20%. This is just one step - I'm trying to get some more equity income rolling in, and to get away from being too heavily reliant on UK equity income. 

So from 40% equities, all UK to 10% global, 30% UK. That's a step in the right direction, but the proportion of companies listed in overseas markets paying a high dividend is considerably more limited, so it may make more sense to go global with a more general fund.

I think it should be closer to 10% UK and 30% Global Equity...probably even less of a UK weighting. I'd take this opportunity to reduce the number of holdings. Is it really necessary to have 3 or 4 x UK equity funds?

I did think about reducing the number of holdings, but on reflection I decided to stick with it. It keeps the size of each holding at a good size ie not too small, but not so big that I might worry about fund houses collapsing etc! I guess it suits my cautious nature. It would make things much simpler with fewer funds though, so I will definitely think seriously about that going forwards.

Plenty of people feel that your UK allocation should be small, as the UK is a fairly small part of the global financial markets. Then again, there is an argument that the UK has been undervalued for years, and may be on the point of improving. They are both opinions and it depends on what you feel most comfortable with. Our household portfolio tends to hover around 20% UK, because that suits what we aim for.

I think bostonerimus is USA based, and the US is a very large part of the global markets and most trackers have 50%+ in the US. Which is fine, unless you believe the US is about to catch a cold (or you don't want too much of your portfolio in the Facebook, Apple Tesla etc companies).

[Deleted User]

Sorry for the hit you took on Woodford, Aged. 
One of the worst aspects of of the fiasco is that many or most private investors in his funds thought they were investing in stolid defensive "high income" companies.

masonic

Aged said:

masonic said:

Aged said:

masonic said:

Aged said:

There were 10 holdings. Woodford accounted for 1/10th of the portfolio. 4 x equity funds accounted for 40% - all UK. Fixed Interest 20%. UK Property 10%. Cash 10%. Mixed Investments 20%. This is just one step - I'm trying to get some more equity income rolling in, and to get away from being too heavily reliant on UK equity income. 

So from 40% equities, all UK to 10% global, 30% UK. That's a step in the right direction, but the proportion of companies listed in overseas markets paying a high dividend is considerably more limited, so it may make more sense to go global with a more general fund.

Can you explain what you mean by 'more general' please? 

Equity income funds focus on companies paying a high dividend. That means you're missing out on a fairly wide cross-section of global companies.

OK so something where the objective is something like 'income and capital growth' rather than income only (or growth only).

Yes, or a fund that seeks to track the performance of a suitable index.

Aged

LHW99 said:

Plenty of people feel that your UK allocation should be small, as the UK is a fairly small part of the global financial markets. Then again, there is an argument that the UK has been undervalued for years, and may be on the point of improving. They are both opinions and it depends on what you feel most comfortable with. Our household portfolio tends to hover around 20% UK, because that suits what we aim for. I think bostonerimus is USA based, and the US is a very large part of the global markets and most trackers have 50%+ in the US. Which is fine, unless you believe the US is about to catch a cold (or you don't want too much of your portfolio in the Facebook, Apple Tesla etc companies).

I take on board that UK is 'small' compared with the bigger global picture, but at the same time my conscience dictates that as a UK citizen I should be investing in my own country. 

bostonerimus

LHW99 said:

Aged said:

bostonerimus said:

masonic said:

Aged said:

There were 10 holdings. Woodford accounted for 1/10th of the portfolio. 4 x equity funds accounted for 40% - all UK. Fixed Interest 20%. UK Property 10%. Cash 10%. Mixed Investments 20%. This is just one step - I'm trying to get some more equity income rolling in, and to get away from being too heavily reliant on UK equity income. 

So from 40% equities, all UK to 10% global, 30% UK. That's a step in the right direction, but the proportion of companies listed in overseas markets paying a high dividend is considerably more limited, so it may make more sense to go global with a more general fund.

I think it should be closer to 10% UK and 30% Global Equity...probably even less of a UK weighting. I'd take this opportunity to reduce the number of holdings. Is it really necessary to have 3 or 4 x UK equity funds?

I did think about reducing the number of holdings, but on reflection I decided to stick with it. It keeps the size of each holding at a good size ie not too small, but not so big that I might worry about fund houses collapsing etc! I guess it suits my cautious nature. It would make things much simpler with fewer funds though, so I will definitely think seriously about that going forwards.

Plenty of people feel that your UK allocation should be small, as the UK is a fairly small part of the global financial markets. Then again, there is an argument that the UK has been undervalued for years, and may be on the point of improving. They are both opinions and it depends on what you feel most comfortable with. Our household portfolio tends to hover around 20% UK, because that suits what we aim for.

I think bostonerimus is USA based, and the US is a very large part of the global markets and most trackers have 50%+ in the US. Which is fine, unless you believe the US is about to catch a cold (or you don't want too much of your portfolio in the Facebook, Apple Tesla etc companies).

My advice to reduce the UK equity allocation and increase the international equity allocation has nothing to do with my location, I think many people would advise against such a heavy domestic overweighting.