Smaller companies within a wider portfolio
aroominyork
Posts: 2,821 Forumite
I would appreciate knowing what proportion of equities people generally hold as Smaller Companies/SMEs as I wonder if I am a little high.
SmCo/SME funds make up 29.4%-34.7% of the equities I hold:
UK: 35% of my equities are SmCo/SME (Liontrust UK Sm Co, the rest in LT UK)
Europe: 43% (Baring Europe Select, the rest in Blackrock Cont Eur Income)
US/general global: 0% (all in Ballie Gifford Global Alpha Growth, VLS and Fundsmith)
Japan: 100% (BGFD)
EM: 31%-64% (31% IGC which is India SME; 33% ITEQ which is Israel hi tech – not an SME fund as such but many of the holdings will be; 36% TEM).
This is a retirement portfolio taking an 8-10 year view. I hold SmCo/SMEs variously for diversification, higher risk/reward, or (in EM) as a bit of a tilt.
In UK and Europe I am open to rebalancing. For Japan I like Baillie Gifford but could move part of BGFD into their broader Japanese OEIC. I realise my EM holdings are not typical but I am comfortable with them.Thanks.
SmCo/SME funds make up 29.4%-34.7% of the equities I hold:
UK: 35% of my equities are SmCo/SME (Liontrust UK Sm Co, the rest in LT UK)
Europe: 43% (Baring Europe Select, the rest in Blackrock Cont Eur Income)
US/general global: 0% (all in Ballie Gifford Global Alpha Growth, VLS and Fundsmith)
Japan: 100% (BGFD)
EM: 31%-64% (31% IGC which is India SME; 33% ITEQ which is Israel hi tech – not an SME fund as such but many of the holdings will be; 36% TEM).
This is a retirement portfolio taking an 8-10 year view. I hold SmCo/SMEs variously for diversification, higher risk/reward, or (in EM) as a bit of a tilt.
In UK and Europe I am open to rebalancing. For Japan I like Baillie Gifford but could move part of BGFD into their broader Japanese OEIC. I realise my EM holdings are not typical but I am comfortable with them.Thanks.
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Comments
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Small company funds make up just over 5% of my / OH's portfolio although there will be some smaller companies in other funds. I wouldn't look to have more than 10% in this sector, but that is just what we feel comfortable with.0
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I dont think i hold any.0
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dont see any point in smaller companies. too much risk for little reward imo. if i wanted to go for smaller companies i would only consider a managed fund or individual stock selection and even these would make up max 5% of total portfolio.0
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IIRC my equities are split 45% developed, 12.5% property, 12.5% EM, 15% value, 15% small with no home bias. So I suppose thats 20-25% small.
There's a lot of discussion on whether any small or size premium still exists, and if it does it takes decades to show above noise. I'm sticking with it.0 -
I just took a look at Hargreaves Lansdown’s Master Portfolios where they give you a suggested portfolio of funds with sliders so you can change the allocations. For their Adventurous option their starting weightings include 15% UK micro-cap and 15% global smaller companies so that’s 30% SME. But it’s also a really strange portfolio because the other allocations are 10% Asia Pacific, 10% EM, 15% Europe, 20% UK, 15% Japan. It looks like the only USA holdings are within the global smaller companies!0
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aroominyork wrote: »It looks like the only USA holdings are within the global smaller companies!
I wonder which funds they make least profit on...0 -
having BG Japan & your liking of Sm co. have you looked at their Shin Nippon trust?aroominyork wrote: »I would appreciate knowing what proportion of equities people generally hold as Smaller Companies/SMEs as I wonder if I am a little high.
SmCo/SME funds make up 29.4%-34.7% of the equities I hold:
UK: 35% of my equities are SmCo/SME (Liontrust UK Sm Co, the rest in LT UK)
Europe: 43% (Baring Europe Select, the rest in Blackrock Cont Eur Income)
US/general global: 0% (all in Ballie Gifford Global Alpha Growth, VLS and Fundsmith)
Japan: 100% (BGFD)
EM: 31%-64% (31% IGC which is India SME; 33% ITEQ which is Israel hi tech – not an SME fund as such but many of the holdings will be; 36% TEM).
This is a retirement portfolio taking an 8-10 year view. I hold SmCo/SMEs variously for diversification, higher risk/reward, or (in EM) as a bit of a tilt.
In UK and Europe I am open to rebalancing. For Japan I like Baillie Gifford but could move part of BGFD into their broader Japanese OEIC. I realise my EM holdings are not typical but I am comfortable with them.Thanks.0 -
aroominyork wrote: »I just took a look at Hargreaves Lansdown’s Master Portfolios [...] It looks like the only USA holdings are within the global smaller companies!
How odd! Given that the USA large caps account for almost half of global equity that is rather surprising. I wonder what their thinking and motivation is for this!0 -
In my growth portfolio I am 47% large, 28% Midrange and 24% small. As to whether the SC premium exists consider these average 5 year returns for funds in the various geographic sectors...
UK All companies: 66.4%
UK Smaller companies: 111.7%
North America: 121.5%
North America Smaller Companies: 121.2%
Europe ex UK:87.5%
Europe smaller companies:120%
Japan:114.5%
Japan Small Companies:177.5%
Looks pretty clear to me that the premium exists except for the USA and you dont have to wait decades to benefit from it.0 -
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