Suggested portfolio

robatwork

Nosmo_King_2 said:

I have been provided with a suggested portfolio for my £380K pension pot, and whilst I have no reason to doubt the suggestions by the IFA but wondered whether any should be avoided for any reason?

 

Yes - clearly the 1.20% in Rathbone Global Opp should be 1.15.  Crazy to have it at 1.20. And totally underweight in IF Brandywine GIOXI which should clearly be 0.87.

Did you not take one look at this and think - "what an absolute shower of shizz"?

This is a classic example of an IFA trying to show off when you'd doubtless be better off just putting it all in Vanguard Target Retirement 20xx. 

Don't avoid the funds. Avoid the IFA.

Cus

I think in the US they define sector funds as related to a particular industry or business (e.g. healthcare), where as in the UK a sector fund definitions seem a lot wider, including euro government bonds as an example.

And it does appear that lifestrategy funds in the UK do include these UK defined sectors, whereas the US versions do not include any sector funds, UK or US defined.

The devil is in the detail as they say.

[Deleted User]

Cus said:

I think in the US they define sector funds as related to a particular industry or business (e.g. healthcare), where as in the UK a sector fund definitions seem a lot wider, including euro government bonds as an example.

And it does appear that lifestrategy funds in the UK do include these UK defined sectors, whereas the US versions do not include any sector funds, UK or US defined.

The devil is in the detail as they say.

I am not in the US. I am in Canada.  “Sector” generally means just that.   Like an industry sector.  You are slicing and dicing and betting on “sectors” if you buy sector funds.  

Its not really relevant though. VLS = the whole world.   Saying “VLS contains X, Y or Z under the bonnet” is a red herring.  These funds (and similar from HSBC and others) don’t try to slice and dice investments.  The mechanics of how the strategy is implemented is irrelevant.  Its a very simple one-fund solution which is nothing like the nonsensical hotchpotch in post #1. 

dunstonh

I am not in the US. I am in Canada.  “Sector” generally means just that.   Like an industry sector.  You are slicing and dicing and betting on “sectors” if you buy sector funds.  

Its not really relevant though

You made it relevant by saying it was wrong.  

Saying “VLS contains X, Y or Z under the bonnet” is a red herring. The underlying investments in a fund are not a red herring.  How a fund invests is very important.


These funds (and similar from HSBC and others) don’t try to slice and dice investments.  The mechanics of how the strategy is implemented is irrelevant.  Its a very simple one-fund solution which is nothing like the nonsensical hotchpotch in post #1. The governance of a fund and strategy is a mandatory requirement in the UK.    So, whilst you consider it irrelevant in Canada, it is not irrelevant here.

You do need to make your mind up.  Earlier in this thread you said the use of more than 4 funds is bad investing.  Yet VLS contains 17 funds.     You also say the use of single sector funds is bad investing.  Yet that is what VLS uses.   But now you are saying its a simple solution.

[Deleted User]

You made it relevant by saying it was wrong.  

Guess I wasn’t clear.  For an investor to buy a bunch of sector funds is wrong. Betting on industries is wrong.  Reducing diversification is wrong.  Complex, unmanageable, expensive  portfolios are wrong.    

Nothing’s wrong  with one-fund solutions which maximize diversification at a low cost. 

Cus

Deleted_User said:

Cus said:

I think in the US they define sector funds as related to a particular industry or business (e.g. healthcare), where as in the UK a sector fund definitions seem a lot wider, including euro government bonds as an example.

And it does appear that lifestrategy funds in the UK do include these UK defined sectors, whereas the US versions do not include any sector funds, UK or US defined.

The devil is in the detail as they say.

I am not in the US. I am in Canada.  “Sector” generally means just that.   Like an industry sector.  You are slicing and dicing and betting on “sectors” if you buy sector funds.  

Its not really relevant though. VLS = the whole world.   Saying “VLS contains X, Y or Z under the bonnet” is a red herring.  These funds (and similar from HSBC and others) don’t try to slice and dice investments.  The mechanics of how the strategy is implemented is irrelevant.  Its a very simple one-fund solution which is nothing like the nonsensical hotchpotch in post #1. 

It is a hotchpotch in post #1, and agree that VLS (UK or US) is effectively a very simple one fund solution. In fact the UK version is very similar to the suggested 11 funds needed by Dunstonh.

dunstonh

Guess I wasn’t clear.  For an investor to buy a bunch of sector funds is wrong. Betting on industries is wrong.  Reducing diversification is wrong.  Complex, unmanageable, expensive  portfolios are wrong.    

No-one mentioned betting on industries until you brought it up.

Nothing’s wrong  with one-fund solutions which maximize diversification at a low cost. 

VLS is a portfolio of 17 funds.   So, why is it that VLS with 17 funds is ok but a portfolio of 8-15 funds is not?

Thrugelmir

Deleted_User said:

dunstonh said:

Then you need to select fund(s) to meet item 3.   The vast majority of people would be best served with a single fund portfolio.  Portfolios with around 4 funds may make sense as well.  Anything more than that would need a bloody good reason for it, eg;

That is your opinion but 4 funds can be equally unsuitable as having 40.    Generally speaking, around 8-15 tends to be the sweet spot when using a portfolio of single sector funds.

I am not going to persuade a self-serving IFA but single sector funds should not be used. Its bad investment advice. 

Any number of funds COULD BE “unsuitable” if they don’t follow asset allocation. If they do, then simple is beautiful.  Unnecessary complexity is bad for portfolio and these days one needs a really good reason to have more than 1 fund. 

Such as? Which fund provides an investor with a broad and diverse all weather portfolio. 

bostonerimus

Nosmo_King_2 said:

I have been provided with a suggested portfolio for my £380K pension pot, and whilst I have no reason to doubt the suggestions by the IFA but wondered whether any should be avoided for any reason?

 

What The ****! People will always argue about the number and composition of funds in a "suitable" portfolio, but I think most people will agree that 40 funds is just plain stupid. And 40% in VLS60??? Just using one or two multi-asset funds would be far more sensible. If this is being recommended to you by someone, then drop them immediately. I would never have less than 10% of your investable portfolio in each fund. So you'll have a max of 10 funds and that will make things manageable and more than diverse enough. Personally I use fewer funds and have done well enough with 4 or 5 that give me a cap weighted globally diverse equity portfolio and some bonds and cash. 

RogerIrvine

robatwork said:

Nosmo_King_2 said:

I have been provided with a suggested portfolio for my £380K pension pot, and whilst I have no reason to doubt the suggestions by the IFA but wondered whether any should be avoided for any reason?

 

Yes - clearly the 1.20% in Rathbone Global Opp should be 1.15.  Crazy to have it at 1.20. And totally underweight in IF Brandywine GIOXI which should clearly be 0.87.

Did you not take one look at this and think - "what an absolute shower of shizz"?

This is a classic example of an IFA trying to show off when you'd doubtless be better off just putting it all in Vanguard Target Retirement 20xx. 

Don't avoid the funds. Avoid the IFA.

Ha ha! Very good.