All Star Manager Portfolio

munk

The research you've put into thinking out your fund selection is awesome, kudos for that A few thoughts on the process and fund selection:

Bestinvest has a portfolio planning tool which can help greatly in creating the right balance of funds. It's on their site if you dig around, http://bestinvest.co.uk/ - when it works (it crashes quite a bit unfortunately) it's an excellent tool and really simplifies initial balancing. Mmm see you mentioned bestinvest, maybe you saw the tool already then

Having said that though, the morningstar x-ray tool is a close second


Regards the fund selection I would echo what others have said about bias to UK and your underestimation of the volatility of your selection so won't go on about that except to say perhaps thinking about incorporating some global growth or equity funds like artemis global growth or neptune global equity.

One other suggestion I would make is perhaps to think less of having 'China' specifically as a theme in your portfolio and look more at 'emerging markets' instead. If you're really thinking of overall portfolio volatility / downside risk tolerance of 10%, perhaps a maximum of 2% in 'emerging markets'.

Some fund ideas for emerging markets are first state asia pacific leaders, allianz rcm bric stars, jpm new europe, neptune russia & greater russia - although with some of these if you're adhering to your strict manager tenure policy this could be hard as in some cases some haven't managed the funds for a long time. As always check out the emerging sector fund/manager history on citywire/trustnet/morningstar for research!

Some ideas anyway, great work on the research - those sites you list are exactly the same that I use for research

purch

I echo the sentiment about having too many funds. It's easy to imagine that you have spread your risk by choosing a number of funds in the same sector, but often you will find that each one holds various amounts of the same stock.

In fact if you are not careful you can end up concentrating risk rather than spreading it.

In current economic conditions don't make the mistake of considering Bond Funds as low risk. If inflation rises, the prices of the Bonds held in these funds will fall, and it will be tough for even the best manager to make a positive capital return.

Like everyone else here I admire your thorough research, and the resulting spread you have achieved. I know that not everyone will agree with this, but I am a subscriber to Fullermoney which I consider the most important investment tool I have, and in the words of David Fuller 'I regard the choice of vehicle as secondary to the selection and timing of the investment theme'

P.S. It's very easy for a thought provoking thread like this one to be lost onto page 2 very quickly on this site, buried beneath the wave of identical threads on 'the best ISA rate' ....'Is my money safe ???' ... or 'whats the best...monthly or annual..blah blah blah.'

FATHEROFTWO_2

Thanks all that have contributed.

I will take what you have said and have decided re jig the sector allocations and continue to research other funds in the specialist sectors.

Is their anyone here would criticise the actual UK..EURO AND US choices I have made all comments are welcome ?

I will come back with another version of the sector allcation.

I agree I do look overweight in the UK ...probably underweight in EURO and US and take on board about the fundamental values in China and perhaps reduce my exposure.

I will look at Global Funds as mentioned along with the GEBs.

Any comments are welcome.

Browntrout_2

Fundology is a good book written by John Chatfeild-Roberts of Jupiter.

In fact I thought so much of the book it changed my whole philosophy from DIY share dealing to using Fund Manager Unit Trusts.

Amongst other things I invested a lot in the Jupiter Merlin Growth Portfolio. It is down 3.2% Feb07 to Feb08, which beats both the S&P 500 and FTSE350 by some margin.

It is an Active Managed multi-manager fund a.k.a fund-of-funds, it's top ten holdings are;

Findlay Park American Smaller Companies 13.1%
Invesco Perpetual Income 11.6%
First State Asia Pacific Leaders Class 9.3%
Findlay Park Latin America 7.5%
Jupiter UK Growth 7.3%
Old Mutual UK Select Mid Cap 6.9%
Standard Life Investments UK Equity Unconstrained Class 6.9%
Schroder UTL European Alpha Plus 4.3%
Jupiter Financial Opportunities 4.2%
Jupiter Emerging Europe Select Class 3.5%

The book mentions the largest holding, Findlay Park, is a closed fund and even if wasn't there is no access to UK residents.

On your choices I agree to avoid property but not on financials, if banks and insurers cannot make money then we are all doomed, I believe quality financials will lead the markets a lot higher this year, but that's the gambler in me!

PS check the holdings of - Jupiter Financial Opportunities Income Units

meester

Browntrout wrote: »

Fundology is a good book written by John Chatfeild-Roberts of Jupiter.

In fact I thought so much of the book it changed my whole philosophy from DIY share dealing to using Fund Manager Unit Trusts.

Amongst other things I invested a lot in the Jupiter Merlin Growth Portfolio. It is down 3.2% Feb07 to Feb08, which beats both the S&P 500 and FTSE350 by some margin.

It is an Active Managed multi-manager fund a.k.a fund-of-funds, it's top ten holdings are;

Findlay Park American Smaller Companies 13.1%
Invesco Perpetual Income 11.6%
First State Asia Pacific Leaders Class 9.3%
Findlay Park Latin America 7.5%
Jupiter UK Growth 7.3%
Old Mutual UK Select Mid Cap 6.9%
Standard Life Investments UK Equity Unconstrained Class 6.9%
Schroder UTL European Alpha Plus 4.3%
Jupiter Financial Opportunities 4.2%
Jupiter Emerging Europe Select Class 3.5%

The book mentions the largest holding, Findlay Park, is a closed fund and even if wasn't there is no access to UK residents.

Funds of funds just cost you more money in charges on top of the charges you are already paying.

On your choices I agree to avoid property but not on financials, if banks and insurers cannot make money then we are all doomed, I believe quality financials will lead the markets a lot higher this year, but that's the gambler in me!

PS check the holdings of - Jupiter Financial Opportunities Income Units

I sold mine last July. Quite pleased to have done so

jamesd

FATHEROFTWO, you should seriously consider whether you want to put all of the money into the market at one time. With high volatility you can significantly reduce your risk by investing it gradually over the course of a year. You do also reduce your profits if it happens that the day you would have invested was the lowest possible buying day but since you have an interest in low risk that's a good trade to make.

It's impossible for you to meet your 10% target because the bond funds have 10% or more risk. You're more like 30%, which isn't too bad since risk aside you are acting as though you're interested in growth at the cost of extra risk.

Morningstar's free portfolio planning tool has a stock overlap checker in its x-ray section so you can see if lots of funds hold the same share. It'll tell you your own top ten share holdings and the funds which hold them, based on the top tens reported by the fund managers.

meester, to see managed funds consistently outperforming passive funds, just take a look at the UK fund rankings. It's completely routine for the better managed funds to routinely beat passive funds, including passively managed. Past manager outperformance is also a useful guide to a higher than average chance of future relative outperformance.

Studies are generally systematically flawed, doing things like completely ignoring manager changes and/or citing sector averages rather than the better funds.

I suggest taking a look at global growth funds sold in the UK if you want some examples. Take a look at the best performers five or six years ago and see how they did in each following year, changing fund if the manager changed. You'll find that selecting one that did well gave you a good chance of doing well in later years.

cloud_dog

Would very much echo jamesd initial comments, especially in relation to the US. No one really knows where the bottom is going to be and what shocks may come out of the wood work.

I cant help but think that the US will recover, as the lower the USD goes the more economical their exports will become for other countries but, when and how long this process might take is a big unknown.

With this in mind it might be useful to consider drip feeding money in to a US fund monthly.

cloud_dog

meester

jamesd wrote: »

I suggest taking a look at global growth funds sold in the UK if you want some examples. Take a look at the best performers five or six years ago and see how they did in each following year, changing fund if the manager changed. You'll find that selecting one that did well gave you a good chance of doing well in later years.

Do you have any examples?

Which were the best global growth funds five years ago, and how do they compare to MSCI Emerging Markets?

Browntrout_2

meester wrote: »

Funds of funds just cost you more money in charges on top of the charges you are already paying.

I sold mine last July. Quite pleased to have done so

Good for you meester but my advice was for FATHEROFTWO.

Basically to avoid chasing your tail and constantly going for maximum value you need to formulate a benchmark which then you aim to meet or exceed. Some years you will fail to do this. However you will be in the club with most investment experts and novices alike who fail to beat the market.

The MSCI World Index or S&P 500 or FTSE Allshare are broad indexes which would be good to target.

Yes Fund of Funds have double charges. However net net they beat the S&P 500 which not many funds do, and it does this consistently.

The avoiding high charges path ultimately takes you to the Motley Fool school of building a portfolio of individual shares. I am happy to pay charges to avoid this along as benchmarks are acheived.

FATHEROFTWO_2

Browntrout wrote: »

Fundology is a good book written by John Chatfeild-Roberts of Jupiter.

In fact I thought so much of the book it changed my whole philosophy from DIY share dealing to using Fund Manager Unit Trusts.

Amongst other things I invested a lot in the Jupiter Merlin Growth Portfolio. It is down 3.2% Feb07 to Feb08, which beats both the S&P 500 and FTSE350 by some margin.

It is an Active Managed multi-manager fund a.k.a fund-of-funds, it's top ten holdings are;

Findlay Park American Smaller Companies 13.1%
Invesco Perpetual Income 11.6%
First State Asia Pacific Leaders Class 9.3%
Findlay Park Latin America 7.5%
Jupiter UK Growth 7.3%
Old Mutual UK Select Mid Cap 6.9%
Standard Life Investments UK Equity Unconstrained Class 6.9%
Schroder UTL European Alpha Plus 4.3%
Jupiter Financial Opportunities 4.2%
Jupiter Emerging Europe Select Class 3.5%

The book mentions the largest holding, Findlay Park, is a closed fund and even if wasn't there is no access to UK residents.

On your choices I agree to avoid property but not on financials, if banks and insurers cannot make money then we are all doomed, I believe quality financials will lead the markets a lot higher this year, but that's the gambler in me!

PS check the holdings of - Jupiter Financial Opportunities Income Units

Strangely enough During my elimination process of going through the Funds I had selected Funds that Jupiter Merlin had selected last year and by the time I had eliminated Funds these by chance these funds were also removed and replaced and replaced by Funds that I had selected.It showed me that the process I was following was similar to theirs.
It may be an idea to chech which Funds Jupiter Merlin Have and just buy them,then I would save myself extra commision.