chiangmai
Crazy Mango Extraordinaire
Posts: 6,256 
Likes: 5,266
|
Post by chiangmai on Jul 19, 2017 6:37:54 GMT 7
Fletch has been very kind by helping me try to get some investments sorted out and he's been steering me through the world of investing and funds, his advice has been invaluable to date.
What I'm trying to do currently is reorder a sadly neglected drawdown pension, work that my now fired IFA should have done but didn't. So now I'm into the world of asset allocation, risk management, duration and yields and fund performance. It's a little bit daunting in some areas but my background lends itself well in others, it's actually good fun (for me that is), I'm now at the stage of considering what investment funds I should buy, I think the subject of Lindsell Train above arose as a result of that.
I/we thought it would be a good idea to open up the subject to others to see if posters were willing to put their thoughts and current thinking out for discussion - this is not meant to be a professional exchange in any way and there are no wrong answers, just an exchange of information and thinking. But with so many people these days managing their own investments and with the advent of SIPPS, I would guess there are plenty of others out there who will find this of use.
I'll kick off:
I've got a drawdown pension that's been running for five years and has been neglected. It produces about an 8% return per year and is a very low risk portfolio that contains about one third each of equities, bonds and gilts. I'm in the process of increasing my risk threshold from very low closer to balanced so that means selling some gilts and buying into equities, my target if a 50%/50% split, hence Lindsell Train above. I'm also going to ditch one or two poorly performing funds and open up the portfolio geographically in order to spread my risk.
So asset allocation is one subject, risk tolerance is another, geographic spread is a third and individual funds is a forth. Here's what I'm holding in my portfolio currently:
Bonds:
Fidelity Moneybuilder GB00B3Z9PT62
Fidelity Institutional GB0002473683
M&G Strategic Corp. Bonds GB00B7J4YT87
Equities:
AXA Framlington GB00B7FD4C20
lindsell train UK Equities GB00B18B9X76
Threadneedle. GB00B8169Q14
Baillie Gifford International B GB0005941272
Gilts:
Alianz Gilts GB0031383390
iShares Pound linked Gilts IE00B1FZSD53
Vanguard Long Duration GB00B4M89245
iShares Core IE00B1FZSB30
For me, Lindsell Train UK and Baillie Gifford have both performed very well.
And you?
|
|
|
|
Post by Fletchsmile on Jul 19, 2017 15:05:59 GMT 7
|
|
|
|
Post by rgs2001uk on Jul 19, 2017 21:17:14 GMT 7
If you are getting 8% (which many would bite their arm off for) sounds to me as if you are looking for capital growth.
That BG IT looks interesting, as do many of their products, which I hold.
I dont hold bonds or gilts, I am looking for capital growth, I dont need regular income, not yet a pensioner, I am lucky I have a hard to finf final salary pension, all though if thats still the case when I come to claim it it will be a bonus.
My pension is purely for my wifes benefit, should anything happen to me, she hasnt pushed me over the balcony yet, despite being in line for a very nice little sum.
My mrs has many great qualities, sadly economics isnt what she majored in, at times she is reluctant to talk about money, I dont know if she feels embarrassed or cant actually believe she will pick up X thousands of baht per month when I craok it.
Too be honest I think she fears someone trying to rip her off.
Anyway, back you your problem, ITs are the way to go, Witan, Monks, Alliance etc etc.
|
|
|
|
Post by rgs2001uk on Jul 19, 2017 22:15:04 GMT 7
This is for info purposes only and shouldnt be taken as financial advice to be followed.
My portfolio,
Held with a stockbroker FTSE 100 shares, the usual names, 40%
Alliance IT, 35%
NSI, 25%
All dividends are reinvensted, dont yet need the income.
Not included, my Thai holdings,if things here go pear shaped, the mrs can have the lot.
|
|
chiangmai
Crazy Mango Extraordinaire
Posts: 6,256
Likes: 5,266
|
Post by chiangmai on Jul 20, 2017 3:32:11 GMT 7
OK here's my current understanding on these things rather than any hard confirmed facts and I'm happy to be corrected as necessary:
Have to confess I don't fully understand the benefit or drawbacks of holding investment trusts (IT) versus unit trusts (UT) or open ended investment companies (OEIC), from my perspective they are all vehicles for managing equity holdings - I think the key differences between them is the extent of diversification, flexibility of holdings and tax.
I've taken the position that, to the greater degree, I want to have control over the granularity and diversity of my portfolio, not only do I want to manage the types of assets but also the geographic spread of them rather than having others do that for me. One of the reasons why my IFA got the shove was because he was trying to persuade me to sell all my individual funds and buy into a managed fund of funds. It looked as though doing that would eat up about 3%+ in fees and commissions and with total returns being quite low in some areas currently that seemed like a pretty dumb thing to do. So one of my objectives here is to have control over the costs of my investments and where ever possible and sensible, manage the holdings myself at a detail level.
I'm not really looking for capital growth necessarily. Since my drawdown pension is currently active and making payments to me, it doesn't really matter whether the fund produces income or whether it accumulates funds and grows in size, that's a zero sum game for me since I don't pay tax on that profit however it is achieved - conventional wisdom however suggest that because of our respective age difference, you should be holding more equities and I should be holding more gilts and that I should be receiving income whereas you should be accumulating. Unfortunately gilts have very low returns these days so whilst safe, they aren't a good investment and to improve on that return they have to be ditched in favour of equities.
One thing I have done which is more strategic in nature is to suspend all payments to me from my pension thus allowing it to accumulate funds at a faster rate. The logic here is that it's better to spend ready cash which earns almost zero interest than to spend income that is capable of making a decent return and can be reinvested.
In looking at your portfolio it seems as though we're both doing similar things: you're holding FTSE 100 shares and IT, whereas I'm holding equity funds - you've got NS&I whereas I've got gilts. But you appear to not be holding corporate or sovereign bonds which makes me think about what might happen when the current equities bull run ends - are you actively managing those shares? Also, NS&I is presumably at a fixed rate whereas the coupon rate on gilts is variable based on inflation, presumably the NS&I holding is short duration? I'm curious, do you buy your shares individually, how do you select them and how do you actually buy them?
|
|
AyG
Crazy Mango Extraordinaire
Posts: 5,871
Likes: 4,555
|
Post by AyG on Jul 20, 2017 7:48:58 GMT 7
chiangmai, I really have to question your very high allocation to conventional bonds (including Gilts). At the best of times, bonds provide a small level of income, and will eventually be redeemed at par (meaning that capital growth is typically severely limited, too). In markets as they stand now, the price of Gilts (and other bonds) has been driving sky high thanks to the misguided economic policies of various governments across the globe. When interest rates start to rise, the price of Gilts will fall, leaving you with a capital loss. In my opinion, conventional bonds have no rational place in a retirement portfolio. (There is one possible exception: a fund which uses bonds as a vehicle to express the skills of the manager(s) in selecting bonds across a wide range of maturities and markets. In other words you are paying for the skill of the managers, rather than paying for exposure to a single asset class. One such fund is Invesco Perpetual's Tactical Bond fund, run by star managers Read and Causer. However, its performance since launch has been lacklustre. M&G Strategic Corporate bond, which you hold, has done even worse. This is probably an area you probably shouldn't get into. However, if you do, have a look at Henderson Diversified Income Investment Trust [HDIV], which I do hold.) There is a case to be made for holding index linked bonds, including index-linked Gilts and US TIPS (as a hedge against inflation), and a somewhat weaker case for holding Emerging Markets Bonds, which have more equity-like characteristics. I would also say that you're suffering from "home country bias" - focusing on UK markets, rather than thinking globally. (There's no rational reason to think that your home market will perform better than markets elsewhere in the world. And given the sorry state of the UK in the approach to Brexit, that's particularly true of the UK.) De minimis you should have substantial investments in the US, Europe, probably SE Asia, and possibly Japan and Emerging Markets. Since your investments will also ultimately be spent in Thailand it makes sense to invest in Thailand. Within your pension, this could be done by investing in Aberdeen New Thai (ANW). (If you have spare cash to invest, I'd suggest bringing it into Thailand and investing it here, either in a SET50 tracker (or similar), or in TMBAM's Property Income Plus Fund which invests indirectly in properties in Thailand and Singapore, providing a decent annual income and potential for capital growth. You could potentially put these in your wife's name to simply matters upon your eventual demise.) FWIW, I organised the investments of an elderly British person living in Thailand a couple of years ago. This is the asset allocation and implementation I came up with. You might gain something from it. (The implementation is all through investment trusts - a limitation of the Luxembourg-based platform she used.)  Finally, (for now at least) you could handle a lot of the diversification issues by buying funds which dynamically invest across asset classes according to market conditions, but in a conservative manner. Investment trusts such as Ruffer (RICA) and Personal Assets (PLN) would fit the bill very nicely (PNL is the more conservative of the two). Both are strongly committed to preserving capital. In the unit trust space there's Newton Real Return, Invesco Perpetual Global Targeted Returns, SLI GARS and others. |
|
chiangmai
Crazy Mango Extraordinaire
Posts: 6,256
Likes: 5,266
|
Post by chiangmai on Jul 20, 2017 8:05:34 GMT 7
Thanks for your comments on all of this, here's where I stand:
It's only in the past two weeks that I've started to look for the first time at my holdings, prior to that responsibility for them was deemed to be vested in my IFA - lesson one for me!
The first thing I plan is to reduce the level of gilts/bonds holdings and to achieve nearer to a a 50/50 split with equities, the primary objective being to increase my equity holdings. Exactly what I will do with the remaining gilts/bonds is a downstream activity........baby steps and all that. Anyway, I'm heading from 31% equities to circa 50% equities, that is known and Lindsell Train Global is a very strong candidate for a slice of that.
The lack of geographic spread is also well noted and changes to that are very high on my agenda. I have an anticipated geographic spread I would like to achieve which is far less UK centric but will need to be adopted on a staged basis.
Having now established a rough model for asset allocation and geographic spread I'm into the detail and that means scouring through thousands of funds, in tandem with reading as much fact and opinion as I can handle - as I conclude on individual funds I will post my thinking.
The scope of this work is limited to a single drawdown pension portfolio, my other investments in Thailand and elsewhere are separate and not included.
BTW I'm looking to shed four funds, M&G Strategic Bond (as you noted), Fidelity Moneybuilder, Allianz Gilts and iShares Gilts, those in addition to rebalancing should free up almost half the value of the portfolio.
|
|
chiangmai
Crazy Mango Extraordinaire
Posts: 6,256
Likes: 5,266
|
Post by chiangmai on Jul 20, 2017 8:21:52 GMT 7
Deleted, my misread of the date.
|
|
chiangmai
Crazy Mango Extraordinaire
Posts: 6,256
Likes: 5,266
|
Post by chiangmai on Jul 20, 2017 18:13:31 GMT 7
|
|
AyG
Crazy Mango Extraordinaire
Posts: 5,871
Likes: 4,555
|
Post by AyG on Jul 20, 2017 19:24:50 GMT 7
Try looking at the sector holdings. 32.6% in technology suggests it's very focused (i.e. high risk). It's also geographically very concentrated (China/Hong Kong/Taiwan total 64% of holdings). It also appears to hold a relatively small number of holdings (again, high risk). You haven't, as far as I know, shared your asset allocation plan. However, I rather doubt that a "high risk fund investing substantially in Asian technology firms with a bias to small and mid cap companies" is one of the "buckets". This might be the sort of fund an adventurous investor invests a very small percentage of his/her money in for a "flutter". It's miles away from being a core investment. And remember, as they say, "Past Performance Is Not Indicative Of Future Results". |
|
chiangmai
Crazy Mango Extraordinaire
Posts: 6,256
Likes: 5,266
|
Post by chiangmai on Jul 20, 2017 19:43:38 GMT 7
The plan is to balance between equities and corporate bonds with two existing gilts holdings being a part of the bond element - the other part of the diversification plan is to spread across a range of geographic areas other than the UK and US, in particular Asia Pac/Far East.
I note your comments regarding gilts holdings but I'm too new to all of this to be willing to divest myself of all my gilts, 50% will however provide a higher level of risk and a better balance.
|
|
|
|
Post by rgs2001uk on Jul 20, 2017 21:41:00 GMT 7
^^^^ for CM In looking at your portfolio it seems as though we're both doing similar things: you're holding FTSE 100 shares and IT, whereas I'm holding equity funds - you've got NS&I whereas I've got gilts. But you appear to not be holding corporate or sovereign bonds which makes me think about what might happen when the current equities bull run ends - are you actively managing those shares? Also, NS&I is presumably at a fixed rate whereas the coupon rate on gilts is variable based on inflation, presumably the NS&I holding is short duration? I'm curious, do you buy your shares individually, how do you select them and how do you actually buy them?Read more: bigmango.boards.net/thread/10888/pension-portfolios#ixzz4nNku0H4ITo take your questions one by one. which makes me think about what might happen when the current equities bull run ends I have lived through, housing market crashes, stock market crashes and currency crashes, if the run ends, the dividends will still be coming in and being reinvested. are you actively managing those shares?Yes, every three months my stockbroker sends me an update, along with the dividends paid into my account, I then pick out stocks from my portfolio and reinvest in already held stocks/shares. I'm curious, do you buy your shares individually,See above, after doing some sector analysis and pulling out performance charts I will then choose which stocks to buy. how do you select themSee above, after some research and analysis, be aware I am in it for long term growth and not looking to make a quick buck, I would never refer to myself as a day trader. I hold shares in certain sectors, that were bought years ago, that I wouldnt buy today, eg, BHP Billiton, Rio Tinto. The last shares I bought were, Associated British Foods, Croda International, Diageo, and Prudential. how do you actually buy them?Bought through UK stockbroker. |
|
|
|
Post by rgs2001uk on Jul 20, 2017 22:12:33 GMT 7
CM,as an aside to the above, years ago I held an account (advisory, NOT discretionary) with an old established firm of Stockbrokers, been around for years.
To cut along story short they were taken over by SCUM, Barclays Wealth Management, these twats were nothing more than second hand car salesmen in cheap fitting suits.
They were always pressing me to switch to a discretinary account (which I refused to do) the shares they advised me to buy were almost like an incestuous ponzi scheme, Barclays American fund, Barclay Far East fund, etc etc.
The above all came to a head about 8 or 9 years ago, cost me thousands of quid at my own expense to go back to the UK for a while, close the Barclays rip off account and find a new stockbroker, off course I was overtaken by events, box tickers and BS paperwork are now the order of the day, sign here etc etc.
I was lucky, my stockbroker was an excellent old school type, he has recently retired, his replacement knows nothing of me, or my needs, will suss him out on next years annual pilgrimage..
As an expat trying to deal with the UK financial institutes is almost an exercise in futility.
|
|
chiangmai
Crazy Mango Extraordinaire
Posts: 6,256
Likes: 5,266
|
Post by chiangmai on Jul 21, 2017 1:16:25 GMT 7
CM,as an aside to the above, years ago I held an account (advisory, NOT discretionary) with an old established firm of Stockbrokers, been around for years. To cut along story short they were taken over by SCUM, Barclays Wealth Management, these twats were nothing more than second hand car salesmen in cheap fitting suits. They were always pressing me to switch to a discretinary account (which I refused to do) the shares they advised me to buy were almost like an incestuous ponzi scheme, Barclays American fund, Barclay Far East fund, etc etc. The above all came to a head about 8 or 9 years ago, cost me thousands of quid at my own expense to go back to the UK for a while, close the Barclays rip off account and find a new stockbroker, off course I was overtaken by events, box tickers and BS paperwork are now the order of the day, sign here etc etc. I was lucky, my stockbroker was an excellent old school type, he has recently retired, his replacement knows nothing of me, or my needs, will suss him out on next years annual pilgrimage.. As an expat trying to deal with the UK financial institutes is almost an exercise in futility. Been there done that! The reason I'm going through the current review of my holdings is because UK based IFA's have been so poor. My original IFA sold his business to a larger firm which said they would manage the portfolio but didn't, it took me almost two years to realize that they didn't and in the meantime searching for a new IFA was an impossible task. In the course of that journey I talked with the FCA, DWP, Baroness Altman and many lesser mortals, all basically well intentioned but not of any help. Of the 30 or more IFA's I corresponded/talked with most seemed incapable, only interested in selling new products and completely lost when talking about detail, eventually all would say the same thing, "sorry we can't be of help but you live overseas" and then add on some lame lie of an excuse about passporting/insurance/taxation/local laws. As far as financial services goes in the UK, once you leave to live in another country you become personae non gratae. |
|
chiangmai
Crazy Mango Extraordinaire
Posts: 6,256
Likes: 5,266
|
Post by chiangmai on Jul 21, 2017 7:28:26 GMT 7
Try looking at the sector holdings. 32.6% in technology suggests it's very focused (i.e. high risk). It's also geographically very concentrated (China/Hong Kong/Taiwan total 64% of holdings). It also appears to hold a relatively small number of holdings (again, high risk). You haven't, as far as I know, shared your asset allocation plan. However, I rather doubt that a "high risk fund investing substantially in Asian technology firms with a bias to small and mid cap companies" is one of the "buckets". This might be the sort of fund an adventurous investor invests a very small percentage of his/her money in for a "flutter". It's miles away from being a core investment. And remember, as they say, "Past Performance Is Not Indicative Of Future Results". I've been thinking what you wrote about 30%= high risk: I see a lot of funds with a key holding around 30% followed by pretty extensive diversification, this is true not only sectorwise but also geographically, I therefore wonder how much of a guide to risk that really is. Having said that I've started to take the percentage of holdings as a factor when trying to assess a fund, one of my key one however remains the percentile and quartile rankings. Yes I hear you about past performance but what you wrote on that subject cannot be correct, past performance is a guide to potential future performance although it is of course no guarantee. As things stand, based on what I've read so far, the funds that remain on my list of potentials are: Henderson Diversified Income which looks quite promising on a number of fronts, albeit the Trustnet ranking is bottom of 4th quartile. Witan Schroder Asian total return Invesco Perpetual Asian (which you will also think is high risk for similar reasons). But it's early days and I'm no where near making a decision yet. I've just sold one of my Gilts and bought Lindsell Train Global (which I think is an obvious choice for me personally) so that's my buying done for the week. Thanks to all for your comments and guidance on this. |
|
