What's your portfolio?

Alexland

Similar to Masonic when bonds were unattractive I wasn't holding them so dodged their revaluation but am very pleased it happened as they are attractive again and so I am now around 25% bonds 75% developed world equities (the ratio is a nod to Benjamin Graham). If inflation stays low then I would be very happy with bonds as all I ever wanted from my investments was a couple of percent above inflation each year. 

aroominyork

Alexland, what flavour bonds do you have?

Masonic, what flavour are you planning?

Alexland

aroominyork said:

Alexland, what flavour bonds do you have?

I'm not as much of a bond-nerd as you. Most of my bonds are via a Markit iBoxx £ Non-Gilts Index tracker fund in my workplace pension which looks fairly attractive. Slight negative return over the past 5 years so must be good!

My workplace pension also has a longer duration Gilt fund that has lost 8.1% pa for the past 5 years.

Workerbee999

Currently 

53% STMMF, mainly Av MyM Blackrock Sterling Liquidity plus some Royal London STMM
41% Global mainly excl UK : Av MyM BlackRock Aq Connect World ex UK Equity Index, Standard Life Overseas Tracker Pension Fund, HSBC Global Strategy Dynamic Portfolio, 
6% UK: Av MyM BlackRock Aq Connect UK Equity Index

The funds choice is impacted by what’s available on the different platforms, mainly previous employer DC.

All long term needs are covered by both our DBs and SP, this pot will be used until we reach NRD/SP and the 25% is planned to be spent so the higher proportion of STMM is because it will be accessed in 18 months and then mainly exhausted over the next 5 years.

it’s tempting to increase the STMM for the certainty and current high interest rates but at the same time the equity rally at the moment is hard to withdraw from and interest rates are likely to fall. 

Maybe it’s time for bonds? But I don’t really understand them…. The only one in my DC seems to be: Av MyM BlackRock Aq Connect All Stocks UK Gilt Index. Or Av MyM Legal & General (PMC) Future World Annuity Aware (but I’m not buying an annuity). Any views very welcome 

aroominyork

Alexland said:

aroominyork said:

Alexland, what flavour bonds do you have?

My workplace pension also has a longer duration Gilt fund that has lost 8.1% pa for the past 5 years.

Yes, that's about right for a gilt fund averaging 20 years' duration, though "pa" is a little misleading - the loss was all between Oct 21 and Oct 22.

inflationbuster

I am retired and hundred percent of my SIPP is in BT shares.  It’s not 100 of my pension as l have a 2nd pension (company).

masonic

aroominyork said:

Masonic, what flavour are you planning?

In the past I've held HSBC GS Cautious as a proxy, but I think there are cheaper pure bond options today. I'd just opt for an unhedged global aggregate fund or ETF. There is an iShares Core ETF that looks to fit the bill. Unhedged because historically that has delivered the best risk-adjusted return in combination with equities. Perhaps as there is a flight to the global reserve currency (currently USD and not likely to become GBP again) in times of fear.

aroominyork

masonic said:

aroominyork said:

Masonic, what flavour are you planning?

In the past I've held HSBC GS Cautious as a proxy, but I think there are cheaper pure bond options today. I'd just opt for an unhedged global aggregate fund or ETF. There is an iShares Core ETF that looks to fit the bill. Unhedged because historically that has delivered the best risk-adjusted return in combination with equities. Perhaps as there is a flight to the global reserve currency (currently USD and not likely to become GBP again) in times of fear.

So unhedged AGGG instead of hedged AGBP? I get the logic although it goes against the usual advice; maybe this is a sophisticated vs. unsophisticated investor issue. It's important and seems to merit its own thread.

Alexland

aroominyork said:
So unhedged AGGG instead of hedged AGBP? I get the logic although it goes against the usual advice; maybe this is a sophisticated vs. unsophisticated investor issue. It's important and seems to merit its own thread.

I'd agree with Masonic when the stock market crashes people tend to flee to the safety of USD which causes unhedged global bonds to increase in GBP value. So if you are looking to simply reduce portfolio volatility with bonds then going unhedged has been a good strategy for a UK investor. Especially as some of us might take the opportunity to over-rebalance some (maybe eventually all) of the bonds back into equities... Keeping bonds long term I guess it depends on what you are going to spend the money on as to if hedged or unhedged would be more appropriate to preserve spending power.

MX5huggy

inflationbuster said:

I am retired and hundred percent of my SIPP is in BT shares.  It’s not 100 of my pension as l have a 2nd pension (company).

😮 wow that’s a bold strategy.