Rebalancing ISA - where to start

silvercar

I have an ISA that has built up over a number of years, mainly following fads. It was intended to provide income in retirement, but now that the IHT rules will change, there is less need to consider this as the main provider of retirement income.

So for context, this is only part of the picture; I also have state pension due in 5 years, a small private pension, some rental income and a SIPP and some cash savings. I have an IFA that looks after my SIPP. I also have a husband who has the same sort of finances, but a much larger SIPP.

For this reason I am happy for this money to follow a higher risk strategy. I'm posting now because I realise that following the trend has left me with something that is probably unbalanced.

I'll post the details in the next post.

silvercar

So here are where my funds currently lie:

(They are all now with Fidelity, after taking advantage of cashback deals to unite everything, so they need to stay with Fidelity for now)

Fidelity Funds - global healthcare £2.4k

Fidelity Funds - global technology £8.5k

Fidelity Global dividend fund - £8.5k

FIdelity Global Special Situations - £11.5k

Fidelity Index Fund UK - £20.5k

Fidelity Moneybuilder corporate bond fund - £2.6k

L&G International Index trust -acc - £22.2k

L&G International Index trust -inc - £1.8k

Rathbone Global Opportunities - £15k

CASH £26.5k

Total £120k

Bostonerimus1

You have a classic "pick and mix" portfolio, some equity trackers and other stuff sprinkled around because some models/articles say sectors or small caps etc can boost growth. If you are happy with your cash allocation then I'd just move everything else to a low cost global tracker. You might want to keep something in a UK equity index if you want to have a bit more domestically.

aroominyork

https://forums.moneysavingexpert.com/discussion/comment/81937198#Comment_81937198

Agree (as will most people on this forum). Don't make a couple of changes here and there; consider the whole portfolio as £120k cash and start from scratch.

silvercar

thanks for the input.

….cries but the special situations has done so well, is it really sensible to cash it out?

masonic

https://forums.moneysavingexpert.com/discussion/comment/81937356#Comment_81937356

It could be kept as a satellite fund if you are especially attached. At the moment what you seem to be missing is a core portfolio. I guess L&G International / Fidelity Index UK was originally serving that purpose.

silvercar

So basically it is more sensible to sell off nearly everything and buy 1 or 2 funds than to use the cash element to fill in the gaps? Even with the costs of selling and buying?

masonic

Fidelity don't charge dealing fees on funds, so the only "cost" will be time out of the market and any swing pricing assuming you stick to OEICs/UTs. Any holding under £10k could be consolidated into the surviving funds (for example the index ones) along with the cash and that would leave you in a much more balanced place, with a couple of racier global managed funds to diversify manager risk.

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/81937412#Comment_81937412

I'm just reflecting the sort of portfolio I use. I'm not that enamoured with satellite funds and so I'd get rid of them and keep your equity index funds to simplify things. How much cash/fixed income you keep will depend on your circumstances and goals. You commented that "Special Situations" had done well, so it might be a good time to sell some of it. But these are all questions for your IFA and what you are paying them to do. Is there a baseline asset allocation or fund percentages that you can rebalance back to?

aroominyork

https://forums.moneysavingexpert.com/discussion/comment/81937356#Comment_81937356

Do you mean is it sensible to take a profit from something that has done well, rather than bite your lip and accept a loss from something that has done badly? Most funds follow a strategy that has its time in the sun then its time in the shade. The pros know to take profits after time in the sun. Amateurs (and I include myself in that) think their winners will inevitably go on winning; experience shows that rarely happens.

masonic

I'm not sure the pros are very good at this either, or there would be some proven fund of funds that could switch between styles at the appropriate time.