% to each region of the world?? Challenge

Venomspread3r

Just a hypothetical question because I'm sure I'll get the answer of "JUST USE A GLOBAL ALL WORLD CAP FUND" but if we wanted a equities global all world portfolio and there wasn't the world cap funds we have today how would you do it ? 

Id be keen to see if people have a bias etc or maybe you think a region of the world gets neglected.
Also do you think this could be done cheaply? 
For the sake of the experiment if we could keep it hedged to GBP.

So

US
UK/EUROPE
EMERGING MARKETS
PACIFIC 
JAPAN 

You personally what % would you have ? 

masonic

What I actually have at this moment (within my equities) is: US 45%, EUR 16%, UK 11%, EM 13%, Pacific 6%, Japan 9%

My bias is against a larger amount in US equities, though I wouldn't say this has done me much good so far. About a third of my portfolio is actively managed, so this isn't just market cap weighted.

Hoenir

Use one of the MSCI indices as a benchmark for your portfolio allocation. 

Venomspread3r

Hello again @masonic
I like those weightings.
What funds are they if you don't mind me asking & I'll ask the question - why this over an all world fund ?? 
Also what are the total fees ? 

Sorry lots of questions - I think you're the same as me, I'm currently currently attacking equities 100% for the next 10 years at least.

Cheers for the transparency regarding your investments.

Venomspread3r

Hoenir said:

Use one of the MSCI indices as a benchmark for your portfolio allocation. 

Well yes that makes perfect sense they are all pretty much weighted in the US favour (and why wouldn't they be) perhaps that's why people would maybe go down this route ..they might think they could shave a bit more off the US % 

masonic

For the trackers I have gone regional, as this gives me a bit more control and allows me to accommodate my legacy actively managed holdings (these are all investment trusts). I have a bit of a mix, spread over different accounts. I use CSP1 for all of my US exposure in my ISAs, then Lyxor and iShares ETFs for Europe and EM, and the iShares Class D OEIC funds for Pacific and Japan. These were what I considered to be the best options at the time, several years ago, and I'm not one to switch funds unless there's a very good reason (marginal savings in fees are worth it after accounting for bid/offer spread or swing pricing for the single priced funds). Overall my fees are currently 0.27% including all custody charges. They are rather high due to the active funds (the trackers themselves are between 0.07-0.14%).

However, I have a workplace pension that is 100% HSBC FTSE All-world Class C OEIC. It happened to be the cheapest option on my pension platform, and this is gradually moving my portfolio closer to an all-world allocation.

I don't recommend this approach for anyone else, not least someone designing a new portfolio. I think there is a lot to be said for the simplicity of something like FWRG if you want 100% equities. If there is a major market crash in the next few years (there probably will be), I don't rule out switching my portfolio into a neutral all-world allocation. The aftermath of market crashes is often a good time to take stock and rebalance after things have been levelled out and valuations look more attractive.

Albermarle

masonic said:

What I actually have at this moment (within my equities) is: US 45%, EUR 16%, UK 11%, EM 13%, Pacific 6%, Japan 9%

My bias is against a larger amount in US equities, though I wouldn't say this has done me much good so far. About a third of my portfolio is actively managed, so this isn't just market cap weighted.

I would not be too far off this either. Maybe a bit more UK and a bit less EM/Pacific/Japan. Also probably sacrificed some recent returns, but I am retired so looking for some stability over growth. Non equity is more slanted towards UK.

Venomspread3r

masonic said:

However, I have a workplace pension that is 100% HSBC FTSE All-world Class C OEIC. It happened to be the cheapest option on my pension platform, and this is gradually moving my portfolio closer to an all-world allocation.

I'll admit I'm a little jealous of your work place pension, my work place pension via AVC salary Sacrifice didn't offer an all world option the best I had was an all world ex UK with BlackRock equities obviously I took it for the saving of NI & TAX. 

But I do hear you regarding an all world fund a good friend if mine swears my 2 funds an all world 90% & 10% gold

Venomspread3r

Albermarle said:

masonic said:

What I actually have at this moment (within my equities) is: US 45%, EUR 16%, UK 11%, EM 13%, Pacific 6%, Japan 9%

My bias is against a larger amount in US equities, though I wouldn't say this has done me much good so far. About a third of my portfolio is actively managed, so this isn't just market cap weighted.

I would not be too far off this either. Maybe a bit more UK and a bit less EM/Pacific/Japan. Also probably sacrificed some recent returns, but I am retired so looking for some stability over growth. Non equity is more slanted towards UK.

What funds do you have if you don't mind me asking @Albermarle

Hoenir

Venomspread3r said:

Hoenir said:

Use one of the MSCI indices as a benchmark for your portfolio allocation. 

Well yes that makes perfect sense they are all pretty much weighted in the US favour (and why wouldn't they be) perhaps that's why people would maybe go down this route ..they might think they could shave a bit more off the US % 

Possibly because MSCI , amongst many other factors,  does take into account of where a company generates it's annual revenues. Brass plate location and where a company has it's primary stock listing are far too often misrepresented in social media discussions.  

Linton

Venomspread3r said:

Just a hypothetical question because I'm sure I'll get the answer of "JUST USE A GLOBAL ALL WORLD CAP FUND" but if we wanted a equities global all world portfolio and there wasn't the world cap funds we have today how would you do it ? 

Id be keen to see if people have a bias etc or maybe you think a region of the world gets neglected.
Also do you think this could be done cheaply? 
For the sake of the experiment if we could keep it hedged to GBP.

So

US
UK/EUROPE
EMERGING MARKETS
PACIFIC 
JAPAN 

You personally what % would you have ? 

My growth portfolio 100% equity is:

US                                     40%
UK/EUROPE                     30%
EMERGING MARKETS    Define?
PACIFIC                            18%
JAPAN                                 9%

It does not add to 100% because your regions are incomplete.  eg Canada.  Also it is impossible to separate EM and Pacific. Where does Emerging Europe fit?  However I think the figures I have used give a reasonable picture as the %s allocated to the unclassified areas are pretty low.

The intention is to move some money from Europe to Pacific, in particular China. Note that Pacific includes India for convenience.

As to how it is done - I have separate large and small company funds for each area plus a global multifactor index fund.   The regional %s are fixed and the component funds %s are adjusted as necessary.

Fund cost is not a major factor, the internal balance of size, value vs growth, and sector allocations are more important.