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  • FIRST POST
    • LULULU1
    • By LULULU1 12th May 18, 8:56 PM
    • 407Posts
    • 35Thanks
    LULULU1
    First Thoughts of Funds Portfolio please
    • #1
    • 12th May 18, 8:56 PM
    First Thoughts of Funds Portfolio please 12th May 18 at 8:56 PM
    Hi all,

    I am looking to buy some exchange traded funds and trackers, funds etc (mainly passive) and would appreciate any thoughts as to the following:

    Emerging Markets ETF 10%
    Emerging Funds small caps ETF 10%
    Asia Excluding Japan ETF 10%
    Asia small Caps Tracker 10%
    World large Caps Tracker 20%
    UK Small companies Tracker 20%
    India Tracker large cap 10%
    Woodford Capitol Trust 10%

    It is a very very early draft so I would be very happy to receive any thoughts at all.
Page 2
    • ColdIron
    • By ColdIron 13th May 18, 8:53 AM
    • 4,812 Posts
    • 6,328 Thanks
    ColdIron
    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 leap
    • LULULU1
    • By LULULU1 13th May 18, 9:00 AM
    • 407 Posts
    • 35 Thanks
    LULULU1
    I agree but to be honest self managing seem a bit fraught with danger. I know there is the ongoing debate of passive v actual and everybody has a different answer.

    To pay 1.8% for the "Leave it to the expert" is expensive I suppose especially over the years.

    I have even considered just getting an IFA but even the use of these is divided in opinion.
    • firestone
    • By firestone 13th May 18, 9:10 AM
    • 283 Posts
    • 129 Thanks
    firestone
    If you want to go passive i would agree with the others and look at all world funds as they take out the risk of you picking the markets(but check the regions as some are just global and may not invest in the EM that you wish for) Small cap maybe worth looking at active managers for more hands on style but there is the Vanguard global small cap index fund.You could also for a bit more risk pick a fund like Scottish Mortgage which is cheap and not constrained by region or size.
    fixed income and property etc may depend on your risk level(but are risky in their own ways)and your age
    • A_T
    • By A_T 13th May 18, 10:23 AM
    • 551 Posts
    • 382 Thanks
    A_T
    I agree but to be honest self managing seem a bit fraught with danger. I know there is the ongoing debate of passive v actual and everybody has a different answer.

    To pay 1.8% for the "Leave it to the expert" is expensive I suppose especially over the years.

    I have even considered just getting an IFA but even the use of these is divided in opinion.
    Originally posted by LULULU1
    Stick most of it it a global tracker (Vanguard FTSE Global All Cap Index, HSBC FTSE All-World Index, Fidelity Index World, VWRL, SWDA) and the only danger is the market falling in which case you're in the same boat as all other equity investors in the world.

    There is no need for an IFA unless you really don't want to do any research of your own. Your efforts so far seems to show that this does not apply yo you.
    • LULULU1
    • By LULULU1 13th May 18, 10:27 AM
    • 407 Posts
    • 35 Thanks
    LULULU1
    Thanks. That what Im edging towards. Out of interest can some one point me to a small cap Japan ETF which is acc and not a dividend one.

    I assume the big players mentioned above give pretty much the same returns and similar charges.
    • Prism
    • By Prism 13th May 18, 11:59 AM
    • 535 Posts
    • 442 Thanks
    Prism
    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%
    Originally posted by LULULU1
    Not that its wrong (there is no right or wrong) but you can end up with odd effects when you put a bunch of funds together like this. I put these allocations into morningstar.

    You would have about 5% invested in Australia
    You would have a high percentage in Hong Kong and South Korea (maybe about 8%)
    You would be more cyclical and less defensive than the MCSI ACWI
    Your second biggest holding would be Samsung
    AIA Group is one of your biggest banks

    You would have to think and decide if this is truely what you are after. Would you really value Samsung more than Microsoft, Facebook or Alphabet? Is Australia as good as an investment as Japan (also arounf 5%)?
    • LULULU1
    • By LULULU1 13th May 18, 12:11 PM
    • 407 Posts
    • 35 Thanks
    LULULU1
    Can you tell me where about on the Morringstar site you did that please.

    Its very very helpful.

    Thanks
    • Prism
    • By Prism 13th May 18, 12:18 PM
    • 535 Posts
    • 442 Thanks
    Prism
    Can you tell me where about on the Morringstar site you did that please.

    Its very very helpful.

    Thanks
    Originally posted by LULULU1
    Its called Morningstar Xray. I use it through my Youinvest account but you can get it direct from Morningstar. I do not know if it costs money to subscribe to
    • bostonerimus
    • By bostonerimus 13th May 18, 12:41 PM
    • 2,427 Posts
    • 1,720 Thanks
    bostonerimus
    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.
    Originally posted by LULULU1
    If you know what you're doing then a professional is not needed. However, I think you need to learn a bit more before you implement your portfolio. Your allocations have jumped all over the place and as a novice I question the extent of your initial Asia and Small Cap allocations. I am far more comfortable with your final portfolio, but it still has no fixed income; bonds etc are an asset class you are totally ignoring. Read something like Tim Hale's book and certainly look at the example portfolios on H&L's website to develop your own approach. Have you thought about how you'll manage your portfolio after you've chosen it? Are you going to buy and hold, rebalance or actively trade?
    Last edited by bostonerimus; 13-05-2018 at 6:43 PM.
    Misanthrope in search of similar for mutual loathing
    • LULULU1
    • By LULULU1 13th May 18, 6:03 PM
    • 407 Posts
    • 35 Thanks
    LULULU1
    Hi, I dont intend to do much with it other than rebalance. I haven't considered fixed income or bonds yet but I guess to balance every portfolio they are needed.

    When you say fix assets I assume government backed bonds ad gilts are the safest and then you can stray to however much risk you want to take.

    Again, thanks for your help.
    • Alice Holt
    • By Alice Holt 13th May 18, 7:01 PM
    • 2,564 Posts
    • 2,957 Thanks
    Alice Holt
    "Its more than 100k. Its in a SIPP at the moment."

    This raises some questions for me.

    Are you intending to restructure your SIPP?
    If so, I would be taking into account your overall pension situation (any DB schemes? SP forecast) / time scales / income required in retirement? etc when looking at an appropriate risk structure for your SIPP.
    What will you be using the SIPP for?

    Are you intending to withdraw money from your SIPP. Have you looked at the tax implications?
    Alice Holt Forest situated some 4 miles south of Farnham forms the most northerly gateway to the South Downs National Park.
    • LULULU1
    • By LULULU1 13th May 18, 7:26 PM
    • 407 Posts
    • 35 Thanks
    LULULU1
    Hi Its actually my wife SIPP but I manage all of our finance. The SIPP is holding shares at the moment. We both have DB pensions and don't need this income for approx 7-10 years at least..

    Yes i have had a look at the tax implication, My wife will have to pay some time on her withdrawals after taking her 25% tax free..

    Many Thanks for the points raised.
    • dunstonh
    • By dunstonh 13th May 18, 8:02 PM
    • 95,824 Posts
    • 63,534 Thanks
    dunstonh
    The weightings seem a bit random. Slap of paint here, slap of paint there. Is there any structure or objective planned?
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • LULULU1
    • By LULULU1 13th May 18, 8:13 PM
    • 407 Posts
    • 35 Thanks
    LULULU1
    No not really.

    Just want a decent return and then to use some of it for our later retirement and grand children University possibly.
    • Alice Holt
    • By Alice Holt 13th May 18, 8:58 PM
    • 2,564 Posts
    • 2,957 Thanks
    Alice Holt
    Certainly a good idea (IMO) to move out of individual shares and into funds within her SIPP.

    It may be worth reconsidering professional advice on 100k plus. Particularly as it's only a part of your overall pension provision (and presumably of your total savings / investments) .
    Does your DB scheme provide for a widows pension?
    Would your wife's DB scheme plus SP provide an adequate income for her in retirement?
    If you want to benefit your grandchildren, had you considered using the SIPP for IHT planning?
    Alice Holt Forest situated some 4 miles south of Farnham forms the most northerly gateway to the South Downs National Park.
    • LULULU1
    • By LULULU1 13th May 18, 9:30 PM
    • 407 Posts
    • 35 Thanks
    LULULU1
    Hi again,

    Yes my pension does provide a widows pension. Also her pension and SP would be more than adequate.

    What are the most important reasons you think it might be worth visiting an independent advisor.

    Thanks
    • bostonerimus
    • By bostonerimus 13th May 18, 10:36 PM
    • 2,427 Posts
    • 1,720 Thanks
    bostonerimus
    Hi again,

    Yes my pension does provide a widows pension. Also her pension and SP would be more than adequate.

    What are the most important reasons you think it might be worth visiting an independent advisor.

    Thanks
    Originally posted by LULULU1
    Now that you mention the 2 x DB pensions my advice to include some bonds/gilts in your proposed portfolio is looking a little dumb, or at least there's an argument for going 100% equities depending on the size of the pensions. You can count the DB pensions as your fixed income component and so up the risk on the rest of your portfolio. So a World Equity Tracker along with some more focused funds that you've researched might be a good solution. You've come a fair way. Read some more and research. If you feel you'd like professional advice go to an IFA, but don't get suckered into paying them an on going fee of 0.5% or 1% to "manage your money" once things are set up you should be able to do that yourself.
    Last edited by bostonerimus; 13-05-2018 at 11:42 PM.
    Misanthrope in search of similar for mutual loathing
    • LULULU1
    • By LULULU1 13th May 18, 10:45 PM
    • 407 Posts
    • 35 Thanks
    LULULU1
    Thanks for all of your help. Sorry I guess I should have provided more info earlier.

    I think we are there or there about.

    Good Luck
    • aroominyork
    • By aroominyork 14th May 18, 7:39 AM
    • 693 Posts
    • 236 Thanks
    aroominyork
    Hargreaves Lansdown do two things called "leave it to the experts" and "Master Portfolio". They also look helpful.
    Originally posted by LULULU1
    Take care with HL. As well as paying double fees for them to create a 'fund of funds', compare their past performance to trackers and also be aware that the Master portfolios have no US exposure except for a bit of small cap in the Adventurous version. They justify this by saying active funds cannot beat the market so they take the curious approach of just leaving out the US altogether.

    Edit: just realised you cannot see the past performance of the Mater Portfolios though you can see performance of Portfolio+ ('leave it to an expert').
    Last edited by aroominyork; 14-05-2018 at 11:26 AM.
    • LULULU1
    • By LULULU1 28th May 18, 9:00 PM
    • 407 Posts
    • 35 Thanks
    LULULU1
    Didn't realise how hard it would be to get a balanced portfolio and there is much work to do before I get it finished. I may just get a vanguard Lifestyle 100 for now and then adjust as I learn more.

    Definitely not going with an active fund or HL.
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