Portfolio advice

iglad wrote: »

Why haven't you ditched the Fidelity American Special Situ as the performance is shocking 9% over 3 years!!!

The Fidelity Index US P tracker wipes the floor with it 27.6% over 1 years 42% over 3 years. Get Out Now!!

freebetsfreetips wrote: »

Hmm, good point but I guess past performance, the future etc? Guess I bought it years ago and haven't monitored so closely and just thought I can't expect all of my options to go up loads.

It is often shortsighted to follow recent history to decide what holdings you want. That particular fund has certainly underperformed against the broader market for the last two to three years, so some smart alec will shout at you to "Get Out Now!". However, three years ago the same smart alec would have looked at the fund against the broader universe of US funds and note that it was in line with the index over the previous one or two years, but decently ahead of the sector over three years, five years, seven, nine, etc etc fifteen.... They would have been saying "Get IN Now", why track an index when you can use this fund to get an appreciably better performance...

Always wanting to be top of the pops and therefore buying the things that are popular and show they can go up the most in recent times, and then selling them when they have taken a turn at underperforming is not a credible strategy.

If you're going to build a portfolio out of specialist funds that employ particular tactics or strategies within their stock picking, you generally need to have some rhyme or reason why you are using them.

An active fund that invests in 'special situations' opportunities might be expected to have certain phases of an economic cycle in which it has richer pickings, while one might think that if the broader markets are going gangbusters, the pickings for a fund searching for value in companies fallen on hard times or temporarily undervalued by the market may be slimmer, relatively.

So, may not be the best thing to hold at the tail end of a long growth cycle when everything is going up, but their deep value plays could be better when markets are moving into or coming out of recession. There are pros and cons of different approaches but DIY investors tend to need to have more fluid allocation mixes than those who just want to ride the index over the long term.

The manager of Special Sits is deliberately employing a contrarian strategy in selected opportunity sets, so you would not expect it to tightly track the broad markets, but logically you would perhaps think it would be less spectacular when markets are riding high; which indeed the markets have been (S&P500 up 33% in dollars in calendar 2019), and indeed the fund hasn't captured that high return. So buying it and sitting on it through thick and thin is not necessarily the best way to use it - markets spend more time at or near their long term highs, than they spend in the doldrums.

slinga wrote: »

Anyone any thoughts on UTs from Fundsmith or Lindsell Train?

They aim to deliver the return of a concentrated, conviction-driven portfolio, with their holdings following certain criteria favoured by the manager. Sometimes that particular strategy will work well and at other times, rather less so - because it depends whether the types of company meeting the selection criteria from time to time are on average being favoured more by stock market investors, or less. High conviction portfolios can deliver large returns in short spaces of time, and can similarly disappoint on the downside.

I don't have UTs from either manager though family members have the LT global and UK funds, which have done well as can be seen from the charts, but they are not massive parts of the portfolios.