What % are folk investing in the UK?

SpeedSouth

I've realised I've omitted UK equities from my main pension fund selection.  Given US prices at present this is a happy mistake, but clearly does outline the pitfalls of DIY investing.

Currently I have 1 pension invested here https://www.trustnet.com/factsheets/P/r75k/sw-ssga-international-equity-index-pn-cs8/

I need to put some UK back into this I think.
I've got ISAs in VLS so they are (too) heavily weighted in the UK for some, and another SIPP invested in Vanguard FTSE Global All Cap. 

The All Cap only has 3.33% in the UK at present, so at that % nothing much would be changing anyway in monetary terms given the small %'s.

Anyone got any thoughts, or links to good reading/videos on regions?  At this point I'm not going to over complicate things, essentially I just want a global tracker so will keep the fund I have, but sell off a % and put in a UK fund.  

Thanks

eskbanker

SpeedSouth said:

The All Cap only has 3.33% in the UK at present, so at that % nothing much would be changing anyway in monetary terms given the small %'s.

You effectively need to decide whether to use global cap-weighting (such as that Vanguard fund) to allocate a 'natural' representative percentage to the UK, or to choose a different allocation that suits your own opinion about the UK's prospects relative to the rest of the world.

SpeedSouth said:

Currently I have 1 pension invested here https://www.trustnet.com/factsheets/P/r75k/sw-ssga-international-equity-index-pn-cs8/

[...]

At this point I'm not going to over complicate things, essentially I just want a global tracker so will keep the fund I have, but sell off a % and put in a UK fund.

You presumably made a conscious decision to buy into an ex-UK fund, but if you want a global tracker, why not just sell the ex-UK one and buy a global tracker, rather than having to take on responsibility for keeping multiple funds balanced?

Linton

A UK small companies fund representents 5% of my 100% equity growth portfolio.  5% was chosen because UK Small Companies are an interesting investment area and my general rule is that no holding of less than 5% is worth bothering with.

On the other hand I run a separate portfolio focussed on generation of income.  The asset allocation includes about 50% equity.  Of this some 50% is in UK companies since they provide higher % dividends than are available from most other markets.

So as with all investment decisions the right choice of % UK depends on what you are trying to achieve.

MK62

As above, plus you have to be aware of the sterling exchange rate and it's effect on the sterling value of your investments (unless you hold a GBP hedged a share class). The eg S&P500 could do nothing, but if GBP fell 5% vs USD over a period, you'd get a c.5% boost on your S&P500 investment.......while if GBP rose 5% vs USD, the reverse is true. 

masonic

MK62 said:

As above, plus you have to be aware of the sterling exchange rate and it's effect on the sterling value of your investments (unless you hold a GBP hedged a share class). The eg S&P500 could do nothing, but if GBP fell 5% vs USD over a period, you'd get a c.5% boost on your S&P500 investment.......while if GBP rose 5% vs USD, the reverse is true.

I expect you'd see some increase in the FTSE100 too, given the amount of non-domestic revenue earned by many of the constituents.

Beddie

Linton said:

A UK small companies fund representents 5% of my 100% equity growth portfolio.  5% was chosen because UK Small Companies are an interesting investment area and my general rule is that no holding of less than 5% is worth bothering with.

On the other hand I run a separate portfolio focussed on generation of income.  The asset allocation includes about 50% equity.  Of this some 50% is in UK companies since they provide higher % dividends than are available from most other markets.

So as with all investment decisions the right choice of % UK depends on what you are trying to achieve.

Regarding your income portfolio, are you using funds, ITs, ETFs, individual shares or a mix?

Hoenir

Have been an investment trust investor for many decades. These by default are UK listed companies. However they provide me with a broad global exposure. Prefer to spend my time considering the sectors where I want my money to be invested. Rather than getting too hung up where a company is primarily listed or where it predominantly trades. Best returns come from investing in the smaller companies. As have the ability to nimble and upscale very quickly. In this regard prefer UK fund management. Purely from the ability of accessing both people and informative information / data. 

Linton

Beddie said:

Linton said:

A UK small companies fund representents 5% of my 100% equity growth portfolio.  5% was chosen because UK Small Companies are an interesting investment area and my general rule is that no holding of less than 5% is worth bothering with.

On the other hand I run a separate portfolio focussed on generation of income.  The asset allocation includes about 50% equity.  Of this some 50% is in UK companies since they provide higher % dividends than are available from most other markets.

So as with all investment decisions the right choice of % UK depends on what you are trying to achieve.

Regarding your income portfolio, are you using funds, ITs, ETFs, individual shares or a mix?

Funds and ITs.  ETFs, being mainly passive, dont pay as good dividends as active funds perhaps since it requires human judgement to decide whether the historic % dividend of an underlying stock is high because it is a good dividend payer or high because the price is deservedly low. Also passive income funds can be poorly diversified - look at the performance of IUKD during the 2008 crash.  If you had been taking the dividend your investment would still be worth less in £ terms then before the crash thanks to its over-reliance on banking shares.
i
Individual dividend shares other than ITs  would require too much work researching and monitoring each company.  I am more than happy to let the fund managers do this.  50% of the equity in the income portfolio is invested outside the UK mainly in Asia and Europe where buying the individual shares could be a serious hassle. 

El_Torro

My pension has roughly a 10% UK weighting. My ISAs are about the same. I use mainly multi asset funds for both and have some VLS which means that my pensions and ISAs are more overweight in the UK than if I had gone with funds that stick to a global weighting. 

Not that I particularly think that companies listed in the UK are going to outperform other markets, I'm happy with the amount of home bias I have though.

Beddie

Linton said:

Beddie said:

Linton said:

A UK small companies fund representents 5% of my 100% equity growth portfolio.  5% was chosen because UK Small Companies are an interesting investment area and my general rule is that no holding of less than 5% is worth bothering with.

On the other hand I run a separate portfolio focussed on generation of income.  The asset allocation includes about 50% equity.  Of this some 50% is in UK companies since they provide higher % dividends than are available from most other markets.

So as with all investment decisions the right choice of % UK depends on what you are trying to achieve.

Regarding your income portfolio, are you using funds, ITs, ETFs, individual shares or a mix?

Funds and ITs.  ETFs, being mainly passive, dont pay as good dividends as active funds perhaps since it requires human judgement to decide whether the historic % dividend of an underlying stock is high because it is a good dividend payer or high because the price is deservedly low. Also passive income funds can be poorly diversified - look at the performance of IUKD during the 2008 crash.  If you had been taking the dividend your investment would still be worth less in £ terms then before the crash thanks to its over-reliance on banking shares.
i
Individual dividend shares other than ITs  would require too much work researching and monitoring each company.  I am more than happy to let the fund managers do this.  50% of the equity in the income portfolio is invested outside the UK mainly in Asia and Europe where buying the individual shares could be a serious hassle. 

Thanks for your reply. I tend to feel the same way about passives not being so good for income and I like Investment Trusts for this purpose too. I'm not yet building an income portfolio, but will be over the next 2 or 3 years, so appreciate your thoughts.

AlanP_2

Personally I don't get overly hung up on which account has what in it. The fact that the pension had 0% and the ISA has got c24% of the VLS value in the UK wouldn't matter as long as the overall allocation to the UK was what I wanted.