Rebalancing portfolio

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masonic said:

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masonic said:

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masonic said:

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masonic said:

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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.

... or, another strategy could be to have an income fund AND a growth fund?

Yes, that could work too. The objective would be to avoid unintentionally excluding a large subset of companies just because they don't meet the rigid criteria of one type of fund.

How about a split (not necessarily equal) between 'UK Equity Income', 'UK All Companies', 'Global Equity Income' and 'Global Equity' - would that work as a strategy?

bostonerimus

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masonic said:

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masonic said:

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masonic said:

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masonic said:

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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.

... or, another strategy could be to have an income fund AND a growth fund?

Yes, that could work too. The objective would be to avoid unintentionally excluding a large subset of companies just because they don't meet the rigid criteria of one type of fund.

How about a split (not necessarily equal) between 'UK Equity Income', 'UK All Companies', 'Global Equity Income' and 'Global Equity' - would that work as a strategy?

This is a "word salad". The investment industry loves jargon and to create categories. If you are young own a large percentage of equities, I've always gone with a cap weighted global tracker portfolio. If you are close to retirement you might want to emphasize dividend stocks, investment grade bonds, index linked bonds if you are worried by inflation and keep some more cash. 

masonic

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masonic said:

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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.

... or, another strategy could be to have an income fund AND a growth fund?

Yes, that could work too. The objective would be to avoid unintentionally excluding a large subset of companies just because they don't meet the rigid criteria of one type of fund.

How about a split (not necessarily equal) between 'UK Equity Income', 'UK All Companies', 'Global Equity Income' and 'Global Equity' - would that work as a strategy?

Potentially. It would be worth taking your chosen mix and plug it in to one of the many portfolio analysis tools to check the overall geographic/market-sector allocation is well spread and that there isn't too much overlap between the funds you have selected. Those sector labels are quite a crude way of differentiating between funds - some funds may only just fit into the sector, while others could fit with more than one of these sectors. For example, Global Equity Income could almost be considered a subset of Global Equity.