The right time to switch funds?

Bobster48

Hi everyone, 
Over the last 12 months I have started paying more attention to my pension, which for the last 20 years has been invested 100% in UK Equities with Standard Life, so I have missed out on the huge US gains during that period. 
With the help of this forum I made the decision last year to move to a Global Tracker. 

However, I never actually got around to it, which has served me quite well for once. My pension is 6% up YTD (still not fully recovered to its previous peak) and all of the other funds I was tracking and was potentially going to switch to are 7% down YTD and about 2-3% up over the last 12 months.

Is now a good time to be making a switch like this with so much uncertainty surrounding tariffs and the US or should it be done in a more settled period? Most of the funds I was entertaining seem to be heavily weighted to the US and while I hear a lot about 'buying the dip', I am not confident that we will see a settled period for the next few years. 

Is it possible to switch 50% of my fund to a Global Tracker and keep 50% where it is?

Marcon

Bobster48 said:

Hi everyone, 
Over the last 12 months I have started paying more attention to my pension, which for the last 20 years has been invested 100% in UK Equities with Standard Life, so I have missed out on the huge US gains during that period. 
With the help of this forum I made the decision last year to move to a Global Tracker. 

However, I never actually got around to it, which has served me quite well for once. My pension is 6% up YTD (still not fully recovered to its previous peak) and all of the other funds I was tracking and was potentially going to switch to are 7% down YTD and about 2-3% up over the last 12 months.

Is now a good time to be making a switch like this with so much uncertainty surrounding tariffs and the US or should it be done in a more settled period? Most of the funds I was entertaining seem to be heavily weighted to the US and while I hear a lot about 'buying the dip', I am not confident that we will see a settled period for the next few years. 

Is it possible to switch 50% of my fund to a Global Tracker and keep 50% where it is?

How will you know when we are in a 'more settled period' - there's always going to be something unpredictable creating major uncertainty. Whether now is a 'good time' depends on your attitude to risk.

Check with your provider if you can make the switch you want to make. It is usually possible to do so unless you have some sort of life styling arrangement in place, and from your opening sentence that doesn't seem to be the case.

Hoenir

Possiby a multi asset managed fund would serve you better. Diversification is key to good portfolio management. 

Albermarle

Although nobody can predict the future, there seems to be a feeling that the US boom years are maybe over ( to an extent anyway) .
On the other hand the US can not be ignored.
So diversifying your very UK concentrated portfolio to a more global one is probably a good idea, but maybe a global index fund with 65%+ US is a big jump. 
Or you could also look at diluting the 100% equities at the same time.
Just as an example you could look at some mix as is in this fund.
LifeStrategy® 80% Equity Fund - Accumulation

dunstonh

Historically, US vs Global excluding US cycle with each other as to which is best.   Usually played out in cycles lasting a decade or so.    The first part of this millennium saw global as best.  The second part saw US.   YTD it is back to global again but whether that is short term or long term is unknown.  We will only know when we look backwards.

Also, as UK investors, Global, including US, is subject to exchange rate fluctuations.    This year that has been hard on UK investors holding US equities but in other years it can be beneficial.    Many expect the pound to continue rising against the dollar which will continue to hurt UK investors investing in US equity unless currency hedged.

Is now a good time to be making a switch like this with so much uncertainty surrounding tariffs and the US or should it be done in a more settled period?

Every dog has its day and YTD, UK has been good.  It happens about once every decade.  So, if you think UK is going to be best every year going forward then you should stick with UK.  If you think the historic norm of the UK only being occasionally best, then you should look more globally.

 Most of the funds I was entertaining seem to be heavily weighted to the US and while I hear a lot about 'buying the dip', I am not confident that we will see a settled period for the next few years. 

If you are looking at funds that follow market capitalisation, then US would be the highest.  It accounts for around 64% of the global stockmarkets in  most market cap measures.   Back in 2013 US was around 42%.

Is it possible to switch 50% of my fund to a Global Tracker and keep 50% where it is?

Yes, again assuming that you think the UK is going to be the best market for many years to come.

leosayer

No one can predict the future, but having all your investments in one country seems inherently more risky than spreading it around the world. 

kempiejon

I have recently learnt that the global stock market is over $120 trillion whilst the bond market is $130 trillion. It made me think again about my asset allocation and markets I had overlooked like bonds, precious metals, private equity and so on.