My Portfolio

chiang_mai

Here’s what I did......for comment, to adapt or ignore.

 Following the markets correction in April, I decided to put together a new portfolio, something that I was going to be very comfortable with and one that befits my advancing years. I had several objectives, all of which have been met. The most significant is my desire to reduce my US holdings. This is what I ended up with:

Allocations:

 60% (mostly managed) global Equity funds,

26% Short duration/short term bond funds

14% Cash/near cash/money market

 

In Detail:

US - L&G US Index (22% of equities)

UK - Artemis Smartgarp (19%)

EU - Artemis Smartgarp EU (11%)

Dev Asia/EM - Artemis GEMS (22%)

EU - Fidelity EU Divi. (11%)

Japan - M&G Japan and Polar Capital Value, (13%)

 I am aware that a single global index or global equities fund could provide similar coverage but I decided firmly against this. Firstly, I wanted to be able to adjust allocations to individual regions, indpendent of the rest. Secondly, I much prefer the control element of having a Fund Manager  who is capable of making ajustments to their fund, as and when needed. Thirdly, I am uncomfortable holding a sliding index fund at times of stress, because I don’t have the luxury of decades to recover losses. Lastly, All the trackers/index funds either aportion a high percentge to US stocks or none at all. The only fund I could find that holds a lower US allocation is the Jupiter Global Value Equity funds which holds 12% US equities, every one else is 50%+.

 Whilst my personal choice is generally not to use index funds or trackers, I see them as the only sensible way to manage the US markets.

 Dividing the EU into two funds (three actually) differentiates between a focus on giant/large versus large/medium caps.

 Splitting Japan into two funds, covers off large cap growth and medium cap value companies.

 I don’t see undue reliance on Artmeis Smartgarp products any more of a risk than holding a single FTSE All World fund or similar, I’ve merely chosen to break out the geographies into three distinct products. I like the Smartgarp front end selection software process that identifies candiate funds, which is where the name comes from, plus performance and ratings speak for themselves.

 Lastly, I’ve paid attention to sector coverage which is nicely layered and without any holes or undue load. Tech is 24%, Financial Services is 21% plus defensive sectors are well represented.

 On the bond fund front: I hold five funds, all are at least 75% BBB+ whilst durations are all under 2.7, PIMCO, M&G, Man, Artmeis and Premier MIton.

 The portfolio returned 6.4% in the quarter just ended plus I slept at nights!

Bobziz

Wow, that's some big tilts. You may get lucky over the next 15 years, but who knows. Long term average weighing to US seems to be about 50%. Did you consider vanguard life strategy 60 ?

FrugaiMacDugal

Interesting.

I'm a bit of a gambler, tidied up recently so my lot now are:

Bemo, link.14%

Janus Henderson Euro, link. 23%

Janus Henderson Tech, link. 24%

Rathbone Global Opps, link. 39%

InvesterJones

chiang_mai said:

Here’s what I did......for comment, to adapt or ignore.

 Following the markets correction in April, I decided to put together a new portfolio, something that I was going to be very comfortable with and one that befits my advancing years. I had several objectives, all of which have been met. The most significant is my desire to reduce my US holdings. This is what I ended up with:

Allocations:

 60% (mostly managed) global Equity funds,

26% Short duration/short term bond funds

14% Cash/near cash/money market

 

In Detail:

US - L&G US Index (22% of equities)

UK - Artemis Smartgarp (19%)

EU - Artemis Smartgarp EU (11%)

Dev Asia/EM - Artemis GEMS (22%)

EU - Fidelity EU Divi. (11%)

Japan - M&G Japan and Polar Capital Value, (13%)

 I am aware that a single global index or global equities fund could provide similar coverage but I decided firmly against this. Firstly, I wanted to be able to adjust allocations to individual regions, indpendent of the rest. Secondly, I much prefer the control element of having a Fund Manager  who is capable of making ajustments to their fund, as and when needed. Thirdly, I am uncomfortable holding a sliding index fund at times of stress, because I don’t have the luxury of decades to recover losses. Lastly, All the trackers/index funds either aportion a high percentge to US stocks or none at all. The only fund I could find that holds a lower US allocation is the Jupiter Global Value Equity funds which holds 12% US equities, every one else is 50%+.

 Whilst my personal choice is generally not to use index funds or trackers, I see them as the only sensible way to manage the US markets.

 Dividing the EU into two funds (three actually) differentiates between a focus on giant/large versus large/medium caps.

 Splitting Japan into two funds, covers off large cap growth and medium cap value companies.

 I don’t see undue reliance on Artmeis Smartgarp products any more of a risk than holding a single FTSE All World fund or similar, I’ve merely chosen to break out the geographies into three distinct products. I like the Smartgarp front end selection software process that identifies candiate funds, which is where the name comes from, plus performance and ratings speak for themselves.

 Lastly, I’ve paid attention to sector coverage which is nicely layered and without any holes or undue load. Tech is 24%, Financial Services is 21% plus defensive sectors are well represented.

 On the bond fund front: I hold five funds, all are at least 75% BBB+ whilst durations are all under 2.7, PIMCO, M&G, Man, Artmeis and Premier MIton.

 The portfolio returned 6.4% in the quarter just ended plus I slept at nights!

Sleeping at night is important, so I definitely agree with that.

I'd question why active management helps you sleep better than passive however - just as they can respond correctly to something quickly.. they can respond incorrectly too - and could take even longer to recover than passive. To get your desired ex-US tilt you could either use a global ex-us fund (eg. EXUS) which have done a lot better than 6.4% for the last quarter, or make up a portfolio from a few regional index trackers and just reduce the US proportion. 

chiang_mai

Bobziz said:

Wow, that's some big tilts. You may get lucky over the next 15 years, but who knows. Long term average weighing to US seems to be about 50%. Did you consider vanguard life strategy 60 ?

The problem I see with VLS60 (and similar) is that if parts of it go wrong and you want to change that part, you have to throw away the whole thing and start again. I like the modular approach, replace only the part that isn't working and leave the rest alone.

chiang_mai

InvesterJones said:

Sleeping at night is important, so I definitely agree with that.

I'd question why active management helps you sleep better than passive however - just as they can respond correctly to something quickly.. they can respond incorrectly too - and could take even longer to recover than passive. To get your desired ex-US tilt you could either use a global ex-us fund (eg. EXUS) which have done a lot better than 6.4% for the last quarter, or make up a portfolio from a few regional index trackers and just reduce the US proportion. 

I'm not in search of stellar profit or trying to shoot the lights out every day, just an above average return that is low(er) in risk. But sure, there are lots of ways to adopt the same theme, mine is only one of them.

ColdIron

chiang_mai said:

Bobziz said:

Wow, that's some big tilts. You may get lucky over the next 15 years, but who knows. Long term average weighing to US seems to be about 50%. Did you consider vanguard life strategy 60 ?

The problem I see with VLS60 (and similar) is that if parts of it go wrong and you want to change that part, you have to throw away the whole thing and start again

It can lead to short term meddling though, e.g. if EM take a dive. While all wrapped up in one fund you may not even be aware of it which may be better in the long term. Just another perspective

aroominyork

chiang_mai said:

InvesterJones said:

Sleeping at night is important, so I definitely agree with that.

I'd question why active management helps you sleep better than passive however - just as they can respond correctly to something quickly.. they can respond incorrectly too - and could take even longer to recover than passive. To get your desired ex-US tilt you could either use a global ex-us fund (eg. EXUS) which have done a lot better than 6.4% for the last quarter, or make up a portfolio from a few regional index trackers and just reduce the US proportion. 

I'm not in search of stellar profit or trying to shoot the lights out every day, just an above average return that is low(er) in risk. But sure, there are lots of ways to adopt the same theme, mine is only one of them.

Just.....?

chiang_mai

ColdIron said:

chiang_mai said:

Bobziz said:

Wow, that's some big tilts. You may get lucky over the next 15 years, but who knows. Long term average weighing to US seems to be about 50%. Did you consider vanguard life strategy 60 ?

The problem I see with VLS60 (and similar) is that if parts of it go wrong and you want to change that part, you have to throw away the whole thing and start again

It can lead to short term meddling though, e.g. if EM take a dive. While all wrapped up in one fund you may not even be aware of it which may be better in the long term. Just another perspective

Hey, at age 75, everything is viewed as short term.

ColdIron

chiang_mai said:

ColdIron said:

chiang_mai said:

Bobziz said:

Wow, that's some big tilts. You may get lucky over the next 15 years, but who knows. Long term average weighing to US seems to be about 50%. Did you consider vanguard life strategy 60 ?

The problem I see with VLS60 (and similar) is that if parts of it go wrong and you want to change that part, you have to throw away the whole thing and start again

It can lead to short term meddling though, e.g. if EM take a dive. While all wrapped up in one fund you may not even be aware of it which may be better in the long term. Just another perspective

Hey, at age 75, everything is viewed as short term.

Have you stopped buying green bananas?   

chiang_mai

aroominyork said:

chiang_mai said:

InvesterJones said:

Sleeping at night is important, so I definitely agree with that.

I'd question why active management helps you sleep better than passive however - just as they can respond correctly to something quickly.. they can respond incorrectly too - and could take even longer to recover than passive. To get your desired ex-US tilt you could either use a global ex-us fund (eg. EXUS) which have done a lot better than 6.4% for the last quarter, or make up a portfolio from a few regional index trackers and just reduce the US proportion. 

I'm not in search of stellar profit or trying to shoot the lights out every day, just an above average return that is low(er) in risk. But sure, there are lots of ways to adopt the same theme, mine is only one of them.

Just.....?

Historically, I've nearly always realised at  least 12% per year, which is better than the unadjusted 10% market average, perhaps I've just been lucky. I frequently read comments from people who talk in terms of much higher profit per year (true or not) but that's never been my goal.