Retirees Portfolio Revamp

chiang_mai

I’m looking at the current market turmoil as an opportunity to return to basics and start over again. I lost my nerve and sold everything over the course of several weeks but fortunately, only suffered a 3.6% loss from my 2025 high. My portfolio had become too wide spread, unwieldy and I was trying to monitor too many markets and funds at the same time. Subsequently, I’ve put everything into Money Market Funds with Vanguard and Fidelity, a 10% investment in Guinness Global Income which is a legacy fund I respect and like, plus a 4% holding in PIMCO GIS Low Duration Income Bonds. The question is, where next.

 At 75 years of age I can’t afford to be too adventurous so I’ve modelled a 40% equities, 40% fixed income and 20% percent money market portfolio  The equity funds part is not too difficult for me but finding lower risk, managed, global bond funds that produce reasonable monthly income is. If anyone has any pointers they wish to share, I’ll be pleased to consider them.

My equities funds will probably end up being Guinness, BNY Global MA and Invesco Pacific.

TIA for any constructive comments.

El_Torro

It depends on how much money you're going to need. Most of us don't know how long we're going to live of course but how much growth you need to fund your lifestyle will at least partly dictate how much risk you want / need to take. Also if you plan to leave inheritance or if you're happy to not have much left at the end of your life. 

I'm not close to retirement but my plan is to have between 3 and 5 years worth of cash (some would argue that money in money markets is as safe as cash) when retired to be able to ride through dips in equities. Do you have this? Bonds tend to be less volatile than equities but I wouldn't rely too much on that assumption. 

Regarding equity funds I just stick to multi asset funds but if I was going to look for less volatile equity funds I'd probably look at funds that specialise in giving high dividends. Some have a very good track record, though as we know past performance doesn't necessarily predict future performance.

chiang_mai

I'm happy with slow growth of around 8%/10% per year, as long as the fund keeps growing I'll be happy. 

I also like multi asset funds but I'm not a big fan of VG Life series, I do however like the BNY MA Balanced fund.

dunstonh

I'm happy with slow growth of around 8%/10% per year, as long as the fund keeps growing I'll be happy. 

That is not slow growth.   That is the median return of 80-100% equities portfolios.  You are not going to get that return on 40% equities unless the world enters a golden age.

chiang_mai

dunstonh said:

I'm happy with slow growth of around 8%/10% per year, as long as the fund keeps growing I'll be happy. 

That is not slow growth.   That is the median return of 80-100% equities portfolios.  You are not going to get that return on 40% equities unless the world enters a golden age.

You're no doubt correct, except I've been accustomed to higher than average returns for quite a while, so for me, 8/10% is slow growth. I perhaps need to recalibrate this figure, if I'm only investing in safe markets. But I do agree very much with your subsequent comment.

chiang_mai

I suppose that using cash as a proxy for bonds, when I for one don't fully understand if the inverse relationship works or not, and if it does, with which bonds, seems reasonable. Ditto the idea of dividend funds, Fidelity global Dividend caught my eye and is worth exploring perhaps.

thunderroad88

chiang_mai said:

I suppose that using cash as a proxy for bonds, when I for one don't fully understand if the inverse relationship works or not, and if it does, with which bonds, seems reasonable. Ditto the idea of dividend funds, Fidelity global Dividend caught my eye and is worth exploring perhaps.

That’s my strategy…haven’t seen the need to risk bonds for the last few years and probably the next few too. Seven years cash held in various bank deposit accounts and mmfs have and will yield 4-6%, as much or more than bonds, with less risk so that will do for me for now. My only bond exposure is the little contained in my Orbis Global Balanced fund. I also hold Fidelity Global Dividend as a less volatile, US exposure reducing option.

chiang_mai

thunderroad88 said:

chiang_mai said:

I suppose that using cash as a proxy for bonds, when I for one don't fully understand if the inverse relationship works or not, and if it does, with which bonds, seems reasonable. Ditto the idea of dividend funds, Fidelity global Dividend caught my eye and is worth exploring perhaps.

That’s my strategy…haven’t seen the need to risk bonds for the last few years and probably the next few too. Seven years cash held in various bank deposit accounts and mmfs have and will yield 4-6%, as much or more than bonds, with less risk so that will do for me for now. My only bond exposure is the little contained in my Orbis Global Balanced fund. I also hold Fidelity Global Dividend as a less volatile, US exposure reducing option.

Thanks for that, I may be on the right track after all.

I live in Asia so am perhaps more inclined towards investing here. For that reason, I like Invesco Pacific which has a 30% Japan element plus 27% split between India and China. Those are huge markets and the fund has performed well for me in the past albeit it got hammered during the recent volatility spike. For anyone looking for alternatives to the US, it's worth looking at. 

chiang_mai

In the end I decided to leave my PIMCO income bond in situ and added L&G Strategic Bond, which I'd held successfully in the past. 

On the equities front.....I reduced my US based holdings to just 12% and went with Fidelity Global Divi, Invesco Pacific and an iShares Core FTSE100 ETF, for a total of 19% equities and 9% bonds. Everything else remains in money markets. That gives me a good concentration in the UK, EU, 9% in Japan and 8% in Dev Asia plus the sectors are fairly well balanced. I'll watch and wait to see how things look going forward......thanks for some useful comments.

masonic

It might be worth considering the major wealth preservation investment trusts for a slice: Personal Assets Trust and (although it's come of the boil a bit recently) Capital Gearing Trust. Particularly as interest rates fall and money market funds lose their shine.

chiang_mai

Thanks for the thought. I did hold CGT and PAT for some years but concluded that money markets were probably equally as safe (currently over 70%) as an interim step and that they aren't funds I would hold for the longer term. I may of course revisit that thought, as I get older.