Portfolio

Jaguar_Skills

Hi all,

Just after some thoughts if I may.   Bit of background FWIW.   ART payer, aged 36.  I don't have huge amounts of knowledge re investing but I know generally speaking with 20 or so years to go until retirement (I like my job) it is generally better to have a higher amount in equities and to reduce down the closer I get. 

I have just sal sacrificed a large amount of my bonus into my pension to take advantage of employer NIC plus reduce my overall tax.   I am slightly unsure how to spread the money given the market, particularly as the last four funds have performed terribly since I invested in them (albeit they make up a very small portion of my portfolio).   

So a further bit of background, the first two funds were my own choices and the last four were off the recommendation of a friend who is a finanical adviser.   I appreciate things could well change but given how poorly the Baillie Gifford and Liontrust funds have done, I feel a bit reluctant to add big chunks of my cash there particularly when Vanguard and Blackrock have performed really well over the years I've held this. 

However I am all ears and happy to take advice on board.   I do wonder whether given my position an Independent Financial Adviser would be sensible.   

If any more info is needed, please shout. 

Vanguard LifeStrategy 80% Equity Acc – 46%

BlackRock Consensus 100 Fund D Acc – 41%

Baillie Gifford Managed Fund B Acc – 1%

Baillie Gifford Positive Change Fund B Acc – 0.5%

HSBC Global Strategy Balanced Portfolio C Acc – 11%

Liontrust Sustainable Future Managed Growth Fund Class 2 Net Accumulation – 0.5% 

dunstonh

  I appreciate things could well change but given how poorly the Baillie Gifford and Liontrust funds have done, I feel a bit reluctant to add big chunks of my cash there particularly when Vanguard and Blackrock have performed really well over the years I've held this. 

BG Managed would be expected to outperform the other two over the long term but perform worse in negative periods as it is higher risk.  Liontrust would be expected to underperform as ESG/Ethical funds historically do so.

HSBC GS funds have outperformed their VLS and Blackrock equivalents.

A 0.5% or 1% allocation to multi-asset funds is completely pointless.

Jaguar_Skills

dunstonh said:

  I appreciate things could well change but given how poorly the Baillie Gifford and Liontrust funds have done, I feel a bit reluctant to add big chunks of my cash there particularly when Vanguard and Blackrock have performed really well over the years I've held this. 

BG Managed would be expected to outperform the other two over the long term but perform worse in negative periods as it is higher risk.  Liontrust would be expected to underperform as ESG/Ethical funds historically do so.

HSBC GS funds have outperformed their VLS and Blackrock equivalents.

A 0.5% or 1% allocation to multi-asset funds is completely pointless.

Thanks dunstonh.  I think maybe because I have held VLS and Blackrock for much longer they look like they are doing better but when compared to HSBC but probably only because I have held that latter for longer. 

Would you just suggest then not investing any more in the low % multi-assets and plunging the split between VLS, BR and HSBC?

cloud_dog

Jaguar_Skills said:

Hi all,

Just after some thoughts if I may.   Bit of background FWIW.   ART payer, aged 36.  I don't have huge amounts of knowledge re investing but I know generally speaking with 20 or so years to go until retirement (I like my job) it is generally better to have a higher amount in equities and to reduce down the closer I get. 

I have just sal sacrificed a large amount of my bonus into my pension to take advantage of employer NIC plus reduce my overall tax.   I am slightly unsure how to spread the money given the market, particularly as the last four funds have performed terribly since I invested in them (albeit they make up a very small portion of my portfolio).   

So a further bit of background, the first two funds were my own choices and the last four were off the recommendation of a friend who is a finanical adviser.   I appreciate things could well change but given how poorly the Baillie Gifford and Liontrust funds have done, I feel a bit reluctant to add big chunks of my cash there particularly when Vanguard and Blackrock have performed really well over the years I've held this. 

However I am all ears and happy to take advice on board.   I do wonder whether given my position an Independent Financial Adviser would be sensible.   

If any more info is needed, please shout. 

Vanguard LifeStrategy 80% Equity Acc – 46%

BlackRock Consensus 100 Fund D Acc – 41%

Baillie Gifford Managed Fund B Acc – 1%

Baillie Gifford Positive Change Fund B Acc – 0.5%

HSBC Global Strategy Balanced Portfolio C Acc – 11%

Liontrust Sustainable Future Managed Growth Fund Class 2 Net Accumulation – 0.5% 

You (now) hold three different mixed asset funds, different manager, and at different equity/bond splits.  Back of a fag packet calculations shows you may have ended up with a equity 88% / bonds 12% allocation, is this what you were trying to achieve?

Is investing in an ethical way important to you or your strategy?  If not, why hold it?  (I appreciate it was a recommendation).

I have zero knowledge of your appetite for risk etc, but based on your listed investments, I might be tempted to simply pick one mixed asset fund (assuming a level of bonds are similarly important to your strategy) and use that.

I am unsure why all there different choices?  Either the friend just three new find options to you or they ignored what you already held, an unknown.

Jaguar_Skills

cloud_dog said:

Jaguar_Skills said:

Hi all,

Just after some thoughts if I may.   Bit of background FWIW.   ART payer, aged 36.  I don't have huge amounts of knowledge re investing but I know generally speaking with 20 or so years to go until retirement (I like my job) it is generally better to have a higher amount in equities and to reduce down the closer I get. 

I have just sal sacrificed a large amount of my bonus into my pension to take advantage of employer NIC plus reduce my overall tax.   I am slightly unsure how to spread the money given the market, particularly as the last four funds have performed terribly since I invested in them (albeit they make up a very small portion of my portfolio).   

So a further bit of background, the first two funds were my own choices and the last four were off the recommendation of a friend who is a finanical adviser.   I appreciate things could well change but given how poorly the Baillie Gifford and Liontrust funds have done, I feel a bit reluctant to add big chunks of my cash there particularly when Vanguard and Blackrock have performed really well over the years I've held this. 

However I am all ears and happy to take advice on board.   I do wonder whether given my position an Independent Financial Adviser would be sensible.   

If any more info is needed, please shout. 

Vanguard LifeStrategy 80% Equity Acc – 46%

BlackRock Consensus 100 Fund D Acc – 41%

Baillie Gifford Managed Fund B Acc – 1%

Baillie Gifford Positive Change Fund B Acc – 0.5%

HSBC Global Strategy Balanced Portfolio C Acc – 11%

Liontrust Sustainable Future Managed Growth Fund Class 2 Net Accumulation – 0.5% 

You (now) hold three different mixed asset funds, different manager, and at different equity/bond splits.  Back of a fag packet calculations shows you may have ended up with a equity 88% / bonds 12% allocation, is this what you were trying to achieve?

Is investing in an ethical way important to you or your strategy?  If not, why hold it?  (I appreciate it was a recommendation).

I have zero knowledge of your appetite for risk etc, but based on your listed investments, I might be tempted to simply pick one mixed asset fund (assuming a level of bonds are similarly important to your strategy) and use that.

I am unsure why all there different choices?  Either the friend just three new find options to you or they ignored what you already held, an unknown.

Thanks for this.   Qucik answers

Yes 90% equities is about what I'd look to be in, reducing this down nearer to retirement. 

Not particularly bothered about investing in an ethical way, I hadn't really thought about it, just followed the recommendation. 

I think what I will do then is just keep investing the money into Blackrock and VLS as a split which would be 90% equities BR 100% & VLS 80%)

[Deleted User]

In my opinion:

1. Holding less than 5% in any fund is pointless. Just adds completely at no benefit.

2. You are mixing passive and active approaches.  The first two funds are generally passive.  The rest are active.  We now have many decades of data from almost every country on the globe showing that less than half active funds outperform and that we can’t predict which ones would do so next.  And that when active funds outperform its not by much. When they underperform, its by a lot. Pick an approach and stick with it.

3. There is no point having both Vanguard and Blackrock funds. This approach introduces overlaps, duplication in certain stocks while being underweight in others.

Pick desired asset allocation and then select one of the two based on cost and other factors as you see fit.  These funds are built using similar ideology. Each owns “the world”, so you can’t get any more diversified by having two instead of one.  

If you want 90% equity and there isn’t a single multi-asset fund doing what you want, get two from the same provider (eg VLS 100 and 80) or something thats close enough (Blackrock consensus 85). 

Jaguar_Skills

Deleted_User said:

In my opinion:

1. Holding less than 5% in any fund is pointless. Just adds completely at no benefit.

2. You are mixing passive and active approaches.  The first two funds are generally passive.  The rest are active.  We now have many decades of data from almost every country on the globe showing that less than half active funds outperform and that we can’t predict which ones would do so next.  And that when active funds outperform its not by much. When they underperform, its by a lot. Pick an approach and stick with it.

3. There is no point having both Vanguard and Blackrock funds. This approach introduces overlaps, duplication in certain stocks while being underweight in others.

Pick desired asset allocation and then select one of the two based on cost and other factors as you see fit.  These funds are built using similar ideology. Each owns “the world”, so you can’t get any more diversified by having two instead of one.  

If you want 90% equity and there isn’t a single multi-asset fund doing what you want, get two from the same provider (eg VLS 100 and 80) or something thats close enough (Blackrock consensus 85). 

Thanks for this.  So would it make sense to pull money from some of these funds and just pool it all into the VLS? I'm happy to take the money out of the other funds although it just feels a bit like a loss.   But I could just not put any more into them. 

So I could put all my bonus into VLS and then pull Blackrock and transfer the funds.   I am not 100% sure about how I feel having 100% equities so 80% might be a better fit.  

Sorry for all the probably naive points.   I don't know huge amounts about investing, clearly! 

Linton

I see no problem with holding both passive and active funds.  A fund is simply an efficient  mans of holding a large number of individual shares that meet some criterion.  What is important is the overall portfolio allocation.  One chooses funds to achieve an overall alocation.  Whether they are active or passive is a secondary concern.

If you invest in a global tracker you will probably be entirely or almost entirely investing in larger companies from the main developed nations.  You may wish something different. For example some people are concerned about the 60% allocation to US companies in global index funds.  Sadly there are no global Ex-US funds available to create the balance you may want so you will have to set up a portfolio with individual funds to meet your wishes.

Similarly you may want to spice things up a bit with Small Companies or Far East.  Another factor you may want some control over is Value vs Growth. In the recent equity turbulence growth companies have fared badly whilst the more stable value companies have been far less affected.  

dunstonh

A portfolio is a sum of its parts, and it will have many underlying holdings of less than 5%.   Indeed, most will be less than 1%.

[Deleted User]

dunstonh said:

A portfolio is a sum of its parts, and it will have many underlying holdings of less than 5%.   Indeed, most will be less than 1%.

This is designed to mislead. 

Its the fund manager’s role to deal with multiple tiny holdings of stocks and bonds using the appropriate sophisticated software and the strategies they learned at Cambridge or Princeton.  

Individual investors, unless they are well qualified to compete with the experts and buy separate stocks, are already paying to the fund managers for this service.  There is zero need or indeed advantage in them buying numerous funds with less than 5% weight.  The complexity and psychological temptation to mess are massive disadvantages at no meaningful impact in performance. 

Jaguar_Skills

Linton said:

I see no problem with holding both passive and active funds.  A fund is simply an efficient  mans of holding a large number of individual shares that meet some criterion.  What is important is the overall portfolio allocation.  One chooses funds to achieve an overall alocation.  Whether they are active or passive is a secondary concern.

If you invest in a global tracker you will probably be entirely or almost entirely investing in larger companies from the main developed nations.  You may wish something different. For example some people are concerned about the 60% allocation to US companies in global index funds.  Sadly there are no global Ex-US funds available to create the balance you may want so you will have to set up a portfolio with individual funds to meet your wishes.

Similarly you may want to spice things up a bit with Small Companies or Far East.  Another factor you may want some control over is Value vs Growth. In the recent equity turbulence growth companies have fared badly whilst the more stable value companies have been far less affected.  

I think that would be all well and good if I knew anything about companies and who to invest in lol