Fund selection sanity check please

Tommohawk

george4064 said:

You’re asking a very broad and open question, by asking these types of questions does really show that you are a beginner investor.

As others have pointed out, you don’t seem to have much method or reasoning to hold the Liontrust and Trojan alongside your core HSBC fund. With the Liontrust and Trojan both 20% allocation each I would say that’s significant enough to form part of your core portfolio, so you need to have good reason to hold them.

On the other hand, if you did indeed want to invest in those funds as your satellite funds I would adjust the allocations accordingly so that they are only satellite funds (at least from when you start this portfolio). Something like 85% HSBC GS Balanced as your core holding and 7.5% each in Liontrust and Trojan as your more ‘fun’ satellite holdings. Equally could do 90%/5%/5%, depending on how much belief you have in those two satellite funds.

OK thanks for that. Maybe I haven't explained me reasoning well and maybe it isn't sound reasoning!

I was trying to build in some flexibility as per other suggestions - but as I have said I'm very happy to receive alternative ideas! Maybe stick with the HSBC GS and ditch the others? Or something else?

Albermarle

JohnWinder said:

TBH my head is spinning with all the data and graphs and articles I've read and I cant really process any more information.

You (we, anyone) can make it a lot more complicated than it needs to be. It's easy to get the returns the market has to offer (less costs); reflect on why you should get more than that.

All you need to do is choose the proportions you will have in stocks, bonds and cash, based on your risk capacity; choose broadly diversified fund(s) that spread the risk widely; keep costs low.

"Investing is simple. To be sure, you can make it ludicrously complicated.” https://www.whitecoatinvestor.com/the-majesty-of-simplicity/

From the link I like this quote the best by Warren Buffet 

“To invest successfully, you need not understand beta, efficient markets, modern portfolio theory, option pricing or emerging markets. You may, in fact, be better off knowing nothing of these.”

Audaxer

Tommohawk said:

Audaxer said:

To keep it simple but well diversified, I'd just keep VLS60 and HSBC GS Balanced in equal proportions. I'm not sure the other funds would give you any additional benefit. I've just sold Troy Trojan Income X as I've not been that happy with it's performance.

Interesting.

I could certainly be talked out of Troy - but was looking for flexibility. Seem to get good review too. And returnd 8.5% cf 5.5% for sector, no? (3 years)

Maybe I should buy the dip? 

Yes, these returns look okay, but no better than Troy O Inc which is more of a Wealth Preservation Fund with only 44% equity and therefore lower risk, but also has 8.4% annual returns over 3 years. I also have a fair bit in VLS60 and HSBC Global Strategy as I think they are really good multi asset funds.

Rollinghome

Tommohawk said:
BMO Universal MAP C ISA: Diversified, low cost volatility managed, good Lipper and Trustment ratings, outperforms volatility managed sector.

Trustnet list:

BMO Universal MAP Adventurous C Acc
BMO Universal MAP Balanced C Acc   
BMO Universal MAP Cautious C Acc   
BMO Universal MAP Defensive C Acc
BMO Universal MAP Growth C Acc   
BMO Universal MAP Income C Acc

But not BMO Universal MAP C afaics.

Whatever you invest in, be sure to check the ISIN or SEDOL to ensure you buy the intended fund and class, and be a little wary when using Trustnet, Morningstar etc. "ratings".

Tommohawk

Deleted_User said:

Not everything new that one learns has to be used like that. It can be better for a new piece of knowledge to give one a deeper understanding of why one's relatively simple portfolio is fine as it is.

Completely agree. And simple one stop solutions do seem very attractive.... that said most folks commenting on MSE do seem to have a mix of one sort or another.

Rollinghome said:

Tommohawk said:
BMO Universal MAP C ISA: Diversified, low cost volatility managed, good Lipper and Trustment ratings, outperforms volatility managed sector.

Trustnet list:

BMO Universal MAP Adventurous C Acc
BMO Universal MAP Balanced C Acc   
BMO Universal MAP Cautious C Acc   
BMO Universal MAP Defensive C Acc
BMO Universal MAP Growth C Acc   
BMO Universal MAP Income C Acc

But not BMO Universal MAP C afaics.

Whatever you invest in, be sure to check the ISIN or SEDOL to ensure you buy the intended fund and class, and be a little wary when using Trustnet, Morningstar etc. "ratings".

My bad. I meant BMO Universal MAP Growth C. It's a good shout...  with similar funds names it's easy to choose one, but pick the wrong one or wrong class when it comes to buying. I do routinely check ISIN codes when looking funds up.

Talking of which I wonder why Trustnet's chart tool doesn't seem to allow selection by ISIN code. You have to specify by sector/manager /fund, but cant just insert code in the same way you would in the main search area. Maybe I'm missing something?

bostonerimus

For me simplicity and keeping costs low are key and you can get those and diversity using one if the many inexpensive multi-asset funds. In the accumulation phase these can rebalance your portfolio automatically and then you can adjust your asset allocation as you approach retirement. A potential drawback of multi-asset funds is that they don't let you sell particular assets when you sell. Anyway I've always kept things simple and used a few large index funds; a domestic stock index, an international stock index, a bond index and at some times a REIT.  This has given excellent returns (around 9% annual average over the last 30 years) and has allowed me to use a simple rebalancing strategy that has kept my blood pressure down.

pip895

If I am picking a group of funds to form a portfolio the first thing I look for is that they give me something distinct that adds to the whole.  For three funds I might go for a core global tracker 100% equity (at 50 or 60%) a bond fund or bond proxy such as Invesco Tactical Bond or Troy Trojan (~30%) and a conviction fund at (10-20%) this could be a more active global fund such as Fundsmith or an active UK fund including small companies, like Chelverton UK Equity Growth.  

Going for multiple multi asset funds is messy - You would be better sticking with just one or perhaps one tracker and one active.

Rollinghome

Tommohawk said:

My bad. I meant BMO Universal MAP Growth C. It's a good shout...  with similar funds names it's easy to choose one, but pick the wrong one or wrong class when it comes to buying. I do routinely check ISIN codes when looking funds up.

Talking of which I wonder why Trustnet's chart tool doesn't seem to allow selection by ISIN code. You have to specify by sector/manager /fund, but cant just insert code in the same way you would in the main search area. Maybe I'm missing something?

Well, with investors worried about falls in both equities and bond prices, there's plenty of choice now in the global multi-asset space with any number of choices for ratios of bonds to equities.  If you like the management style of Paul Niven, which inevitably is similar to FCIT, and the holdings, it could suit you well.

Whether you need *3* global multi-asset funds plus Troy Trojan and a lump of UK All companies fund on top of their PFs is something else.   But there's no one way to do it: I know one person with over 200 separate holdings to manage and another with his entire life savings in just one global IT, FCIT, all bought through their regular savings scheme.  Both seem to sleep OK.

I agree that the Trustnet search is bit of a pain.  I find HL fund charting quicker to navigate sometimes but has a lot of omissions.  Their share charting will accept fund ISINs for comparisons against stocks but not for the initial search.