US fund "ideas"

GazzaBloom

masonic said:

GazzaBloom said:

Armchair economists abound..

For me it's not really about economic predictions. Three closely related companies now make up nearly 20% of the S&P500. That's a bit too much concentration risk for my liking. Going global gets them down to 12% and I've further tweaked my allocation to reduce them to about 8%.

Putting all your eggs in a single country basket is an active management decision driven by economic arguments. Or do you have a non-econonic reason for picking the USA over your home market or world?

I don't just invest in the US but do have more invested in US than the global index has allocated. I don't have any concerns or fears of concentration in the leading US companies.

My reasoning is based on an over arching set of simple long term beliefs that are broader than macro economics which I don't attempt to forecast. I certainly don't try to guess whether large caps, small caps or whatever are going to be in favour in the coming months or years.

As for home country, 33% of my net worth is invested in UK property, ie, my home. I have no desire to invest in the UK beyond that.

GazzaBloom

Bostonerimus1 said:

The "irrational exuberance" of the US stock markets over the last few days means I'm up silly amounts of money. I have fears for the US economy because of the incoming administrations inclination to protectionist policies and the ethics of many in government and business. I will be tilting a bit away from the US and taking profits to give to organizations that I hope will help the US survive the next 4 years.

The rise this week does indeed appear exaggerated and I may also top slice some of that exuberance before the inevitable reversion. If I do, I will top slice to cash though to boost my impending retirement “risk off” asset allocation accumulation efforts. If it wasn't for that specific reason I would let it ride.

I have no fear that the US will fail to survive the next 4 years. The sun will rise and fall and world continue to turn regardless of who is US President.

Bostonerimus1

GazzaBloom said:

Bostonerimus1 said:

The "irrational exuberance" of the US stock markets over the last few days means I'm up silly amounts of money. I have fears for the US economy because of the incoming administrations inclination to protectionist policies and the ethics of many in government and business. I will be tilting a bit away from the US and taking profits to give to organizations that I hope will help the US survive the next 4 years.

The rise this week does indeed appear exaggerated and I may also top slice some of that exuberance before the inevitable reversion. If I do, I will top slice to cash though to boost my impending retirement “risk off” asset allocation accumulation efforts. If it wasn't for that specific reason I would let it ride.

I have no fear that the US will fail to survive the next 4 years. The sun will rise and fall and world continue to turn regardless of who is US President.

True enough, but for certain segments of the US population the Sun won't be as bright. From an economics POV many of the incoming administration's policies are radically free market, but with a protectionist attitude to foreign trade. You can get away with that in an economy the size of the US in a way that Truss just couldn't do, but I think that eventually it might be a very bad combination. I think a US investment is probably more of a gamble now.

noclaf

I recently attempted to simplify my SIPP and S&SISA, using a 3 etf portfolio in SIPP and the ISA is all invested into SWLD so ideally don't want to tinker more but am nervous about US markets.....in line with Bostonerimus comments wondering when it could turn (or not).

For now I will do nothing but thinking may need to take the 'edge' of the ISA.

LHW99

I have used NAIT to move a little away from the big 7. It's been quite good this year, less so the previous two, but I have been aiming for a moderate overall growth level over the last 10 years, with gradually increasing dividend income.

Wouldn't suit anyone wanting to go all out for growth.

aroominyork

masonic said:

As it happens I bought some SPX4 on Monday. Only 5% to my 45% CSP1 in order to broaden my broadly market cap-weighted US exposure. I had then been meaning to sell some CSP1 to bring my allocation back to 45%, for which the opportunity came today. Lucky timing on both counts for once. I also finally took the opportunity to reintroduce a small holding of global aggregate bonds into my portfolio.

Do you prefer ETFs to OEICs? Vanguard US Equity Index has 3500 holdings so drills down into mid/small caps. Or is that further than you want to drill?

Hoenir

aroominyork said:

masonic said:

As it happens I bought some SPX4 on Monday. Only 5% to my 45% CSP1 in order to broaden my broadly market cap-weighted US exposure. I had then been meaning to sell some CSP1 to bring my allocation back to 45%, for which the opportunity came today. Lucky timing on both counts for once. I also finally took the opportunity to reintroduce a small holding of global aggregate bonds into my portfolio.

Vanguard US Equity Index has 3500 holdings so drills down into mid/small caps. Or is that further than you want to drill?

Drill deeper and it's surprising how many listed US companies are unprofitable. There's a good reason the main focus is on the S&P500. Rather than the broader market indices. 

masonic

aroominyork said:

masonic said:

As it happens I bought some SPX4 on Monday. Only 5% to my 45% CSP1 in order to broaden my broadly market cap-weighted US exposure. I had then been meaning to sell some CSP1 to bring my allocation back to 45%, for which the opportunity came today. Lucky timing on both counts for once. I also finally took the opportunity to reintroduce a small holding of global aggregate bonds into my portfolio.

Do you prefer ETFs to OEICs? Vanguard US Equity Index has 3500 holdings so drills down into mid/small caps. Or is that further than you want to drill?

OEICs are more expensive for me to hold, so I prefer exchange traded investments. I also prefer the S&P indices, which are filtered by profitability, than the Russell or MSCI indices, which are not.

S&P500 + S&P mid cap 400 gets me over 90% of the way there. It's hard to justify the presence of the S&P small cap 600 too, unless I significantly overweight it.

Bostonerimus1

noclaf said:

I recently attempted to simplify my SIPP and S&SISA, using a 3 etf portfolio in SIPP and the ISA is all invested into SWLD so ideally don't want to tinker more but am nervous about US markets.....in line with Bostonerimus comments wondering when it could turn (or not).

For now I will do nothing but thinking may need to take the 'edge' of the ISA.

I have the majority of my investments in a US equity index ETF that tracks the CRSP US Total Market. It's done very well for me. It's cap weighted and so is biased to large cap. The post election spike in prices was mostly due to an expectation that business taxes won't now revert back to their previous levels and might even fall. The incoming administration's policies have a very "IEA" feel to them. The size of the US economy and having the dollar means that they have a better chance of being allowed to pan out than in the UK. But there is bound to be instability with such changes and I will probably become a little more defensive, take some US equity profits and put them in savings looking for 5%ish and move away from the US markets over the next year.

aroominyork

What's IEA please? All I can find is International Energy Agency...

I can't imagine Trump doing much to harm US large cap but surely, at some stage, they are due some kind of reckoning. Whether that means rebalancing to US mid caps or non-US is an interesting question which, I am sure, we will all answer perfectly with hindsight in a couple of years. Because I am underweight US (around 45%, like masonic) the logical reaction is towards US mid-caps (more for balancing than for the reason I opened this thread).