First Thoughts of Funds Portfolio please
Comments
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Just found this on THIS IS MONEY site.
"However, the good news is that ETFs can be used as low-cost building blocks to construct the portfolio you want.
For example, the MSCI ACWI Index, which represents the total world equity markets, is made up of several smaller regional sub-indices.
These can be bought together to recreate any geographic profile you wish.
To give a practical example, if you split your investment over the iShares MSCI North America, iShares MSCI Europe, iShares MSCI Emerging Markets IMI, iShares MSCI Pacific ex-Japan and iShares Core MSCI Japan ETF funds you can re-construct the parent MSCI ACWI index exposure"
Is this the kind of thing you meant ?
Thank you.0 -
Hi,
MSCI ACWI Index is similar to the FTSE All World that I mentioned earlier - the world's developed and emerging markets in roughly their 'correct' (as Jack Bogle would say) proportions.
Boston is suggesting you use that type of low cost index fund for the majority of your money and then by a small number of geographic funds for your unbalanced punts to get some additional EM, etc exposure.
Alex.0 -
So basically the suggestion is to put a significant amount in the MSCI ACWI Index and then add a small amount of the others to get the balance to where I want it. Isn't that basically what I started with ? Im a bit confused how that would save any money just potentially give me more USA and a better balance.
Also not trying to confuse myself even more but am considering a small % in a REIT perhaps British Land. Anyone ever held REITS ?
I guess you could discuss this subject for ever more but wow its interesting and the board is so educational.
Thanks0 -
Boston's suggestion is different as you might be putting somewhere like 70% of your money into a single core global developed/emerging market fund which would run at a really low percentage fee. You would then only need to buy EM, Asia and India funds to get the additional exposure you seek.
British Land is in the FTSE100 and you would get exposure to these types of companies within a good all world index fund. You would also get exposure to Europe, Japan, South America, etc in roughly their fair market proportions.
Also we haven't mentioned Woodford whose investment style seems very haphazard. If you want some active it might be worth considering it for your eastern geographic funds where in less developed markets an active strategy and local knowledge might be beneficial.
Alex.0 -
So basically the suggestion is to put a significant amount in the MSCI ACWI Index and then add a small amount of the others to get the balance to where I want it. Isn't that basically what I started with ? Im a bit confused how that would save any money just potentially give me more USA and a better balance.
Also not trying to confuse myself even more but am considering a small % in a REIT perhaps British Land. Anyone ever held REITS ?
I guess you could discuss this subject for ever more but wow its interesting and the board is so educational.
Thanks
There's a million ways to skin a cat. Using an All World Tracker core and a few small cap/Asia funds could get you to that same place as your 2nd portfolio, but with fewer funds which will make it easier for you to rebalance and manage.
Don't fall into the trap of wanting to own a bit of everything. Get started with a simple portfolio and contribute to it every month, once you've mastered that you might add commercial property or commodities funds or any number of other assets etc......however, you don't need to own everything, 90% of my portfolio is in just 3 funds, a US total market equity tracker, an All World ex US equity tracker and a US Bond tracker.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
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I think its beginning to take a better shape now with much more balance. Here we go........
MSCI ACWI Index 70%
Emerging Funds small caps ETF 10%
Asia Excluding Japan ETF 10%
UK Small companies Tracker 10%0 -
I think its beginning to take a better shape now with much more balance. Here we go........
MSCI ACWI Index 70%
Emerging Funds small caps ETF 10%
Asia Excluding Japan ETF 10%
UK Small companies Tracker 10%
You have moved from 40% small companies in your first portfolio to 50% in your second to 20% now. Looking at geography portfolio 1 is about 10% US, Portfolio 2 say 30% US, Portfolio 3 35% US. You seem to be jumping about all over the place.
Perhaps it would be better if you thought through your high level allocations before listening to the tracker siren calls. You could then choose the most appropriate funds to meet the allocations which in some cases, particularly Small Companies, may not be trackers. Note that small cap trackers can include quite large companies in their remit.
How much do you have to invest? If it is less than say £25K and have little experience I suggest you just keep to a single global all cap tracker or a high equity multi-asset fund. If its more than £100K perhaps you should seek professional advice.0 -
Thanks you for your help.
Its more than 100k. Its in a SIPP at the moment. Many people have said they don't feel a professional is necessary but Im happy to be helped that way if its the right thing t0 do.
The reason I came on way to see whats others views were to asset allocation and then continue to study before making a final decision.
Hargreaves Landsdown do two things called "leave it to the experts" and "Master Portfolio". They also look helpful.0 -
You started out with cheap ETFs and trackers, but HL's portfolios are expensive managed funds. I'm not saying that's wrong, it's just quite a leap0
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