Suggested portfolio

daveharruk

There are some good funds there, but I simply can't see any reason for having so many and many are very similar to each other. The more funds you have, generally the higher the dealing charges will be for them. Why on earth would you hold both JPM Asia Growth and Fidelity Asia, for example, when most of the top 10 are identical? There will likely be a large number of unnecessarily duplicated holdings. Also, I tend to prefer Investment Trusts to Unit Trusts where there is an equivalent option (Edinburgh Worldwide vs Global Discovery, for example), as Investment Trusts tend to outperform

dunstonh

The IFA used Defaqto Engage for research and concluded that Fidelity Funds Network would be the most suitable provider.

Nothing wrong with Fidelity as a platform provider.  Not my cup of tea but platforms are software tools and everybody has different views on what software they like or do not like.    

 I figured that an IFA would have been the way forward (maybe not then?)   

In this case, it seems excessive.   Although if the IFA is using a DFM for some of the money then it would make more sense (how you came by that many funds rather than the reason there is that many).    

I would be questioning the IFA as why there are so many funds.     IFAs are required to have governance behind their investment strategy and be able to evidence it.  i.e. why this fund or that fund and why x% into US equities and y% into UK etc.     The days of picking numbers of out of a hat and a handful of fashionable funds should be long gone.

bostonerimus

Stop worrying about the unicorn that is "the perfect portfolio" or owning enough individual funds to have "a bit of everything" or what someone else is doing or league tables...or indeed last year's performance. Use a few broadly based global funds and maybe overweight with a few sector funds if the tea leaves tell you something. Personally I use a US equity index fund, an international equity index fund and an active, but conservatively managed, multi-asset fund for a small percentage of bonds. I'm not interested in beating anything or anyone and have averaged 10% annual growth for the last 34 years which is enough for me. I've never paid a financial advisor or done anything complicated.

BritishInvestor

BritishInvestor said:

tigerspill said:

I think my IFA was just lazy - as I mentioned above - he had a few fixed portfolios and he used one to match the risk level of the customer.

Many financial planners believe the vast majority of clients will be best served by a globally diversified, low-cost portfolio, and offer a range of portfolios (typically less than 10) with differing ratios of equities/bonds etc to meet client requirements. Each of these portfolios typically consists of a handful of funds, ranging from one (multi-asset) to around 6 (bonds, equities, property etc).

I'm not sure that there is anything lazy in offering a range of portfolios such as this - simple tends to work.

Those that offer complex portfolios with many funds tend to be the traditional IFAs, where the focus is on the product rather than the planning, the latter requiring a greater investment of time and resources.

A smorgasbord of funds can be used to give the impression of adding value, but if you look at who is typically taking a chunk out of your returns:

Adviser
DFM
Active funds managers

you have to wonder how much value is left for you.

Furthermore, you are introducing more variables/risk into the equation, ranging from performance chasing to investment style drift (both from the underlying funds and the DFM itself).

A portfolio containing lots of funds may give the illusion of diversification, but if you have a quick look at the holdings above, they seem to be filled with funds that are "working now" - typically large-cap growth - this is not really diversification.

I would also question the benefit of High yield bonds and Absolute return funds

"they seem to be filled with funds that are "working now"

And the last few weeks have shown us what happens when a certain style stops working. Take the first fund - down >12% YTD.