Portfolio advice

Hi

I started investing a while ago with a fairly helter skelter approach but am now thinking it might be wise to try and balance things out a little!

I'm in my early 40s and looking to invest for probabloy the next 20 years so happy to take on lots of risk. As things stand I have:

Fidelity American Special Situations - £1888
Fid Emerging markets - £3623
Fid Index UK - £4801
HSBC ETFS PLC S&P 500 - 2808
Vanguard FTSE Developed World ex-UK equity Index - 2135
Vanguard life strategy 100% equity - 2360
Worldwide healthcare trust - 2314

I know this is probably a lot more in emerging than most people would have and maybe more in UK and probably overall quite high risk.

However, I have about another £2000 to invest. Is there an obvious hole/gap that I should stick that in? Or beyond the very broad, basic imbalances I have said, is there anything really, really bad or obviously wrong with this lot?

Any advice appreciated.
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Comments

  • Linton
    Linton Posts: 17,061
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    I dont think your Emerging Markets at 18% is particularly high as EM these days is dominated by SE Asia and China which really are in a different category to what one may historically thought of as EM.


    You seem to have a particular liking for the US and the UK since both have their own allocations and are well represented in other funds. Why not Europe or Japan?


    I would sell the S&P500, UK Index, and Developed World Ex UK Index funds and put the money, together with your extra £2K, into VLS100. That would give you a simpler portfolio with a more balanced allocation.
  • Cheers.

    Am I right in thinking holding that direct with Vanguard is the cheapest way to do it?

    Also, in terms of truly emerging markets (I like a gamble!) are there maybe any funds you would recommend or would they also ultimately be covered by the VLS100?
  • eskbanker
    eskbanker Posts: 30,376
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    Am I right in thinking holding that direct with Vanguard is the cheapest way to do it?
    Not necessarily, there are various fee structures, some of which could be cheaper, depending on your trading pattern, so try putting your numbers into the likes of:

    http://monevator.com/compare-the-brokers/
    http://www.comparefundplatforms.com/
    http://forums.moneysavingexpert.com/showthread.php?t=5583030
    https://www.boringmoney.co.uk/calculator/

    And if you're not already doing so, make sure you use a S&S ISA to shelter your investments from taxation on gains and income....
  • Linton
    Linton Posts: 17,061
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    .....
    Also, in terms of truly emerging markets (I like a gamble!) are there maybe any funds you would recommend or would they also ultimately be covered by the VLS100?


    VLS100 is about 2.5% non-Asia EM - Latin America, Africa, Eastern Europe. So some but not enough to make any real difference.


    There are a few "Frontier" funds which focus on the more undeveloped world - Google will fund lots of information and commentary. Also there are a number of Latin America funds. In general their performance has been highly volatile but on average mediocre. I guess development will take decades to bear real fruit and it may well be the big multinationals that gain most rather than local companies.



    I suggest you dont gamble with most of your money. Better to have an objective and know the return you need to achieve it. Then its a matter of doing so at minimum risk.


    If you do want to take higher risk Small Companies in each of the major markets are poorly covered by most index funds and have performed significantly better than large companies over many years. However they are more volatile, for example being particularly hit in the recent global economic uncertainties.
  • bostonerimus
    bostonerimus Posts: 5,617
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    Linton wrote: »
    I dont think your Emerging Markets at 18% is particularly high as EM these days is dominated by SE Asia and China which really are in a different category to what one may historically thought of as EM.


    You seem to have a particular liking for the US and the UK since both have their own allocations and are well represented in other funds. Why not Europe or Japan?


    I would sell the S&P500, UK Index, and Developed World Ex UK Index funds and put the money, together with your extra £2K, into VLS100. That would give you a simpler portfolio with a more balanced allocation.

    I tend to agree, but the OP might want to keep an exUK world equity fund if they want to counteract VLS100s UK bias a bit, but that;s nit picking really. Some EM and VLS100 would be just fine IMHO.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • Thrugelmir
    Thrugelmir Posts: 89,546
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    Does the rationale behind the decision to buy each of the funds still hold?

    I would never suggest buying an investment simply to fill a "gap". For a small portfolio better to hold a few core investments that provide as much diversification as possible. Add more specialist investments once the portfolio has grown in size.
  • I guess i really just wanted to make sure there was nothing majorly out, which it sounds like there isn't. Other than maybe more European?

    If the VLS is a simple way to cover everything I might just stick everything in that from now on. But bostonerimus said it was UK-biased? Is that true as overall I'm probably UK-heavy too? Maybe I'll just stick it all on Leicester to win the league again.
  • What sort of percentage do people think is wise to have in, say, Japan, North America, developed Europe, the UK, etc?
  • I've continued my helter skelter (slightly nicer way of saying ignorant) method and have moved around 1000 from UK to Europe and 1000 from one of the US options to a small/mid Japanese fund.

    Cheers all. Think from now on until I have more time to really look at it I'll just keep topping up the VLS 100.
  • Linton
    Linton Posts: 17,061
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    What sort of percentage do people think is wise to have in, say, Japan, North America, developed Europe, the UK, etc?


    By default I suggest you base your allocations on those of one of the major indices and only do something different if you have a good reason. I cant think of a good reason to do something wildly different but for example I cut back on US and put more into SE Asia as I am not comfortable with the risk of any geography being more than 40%.
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