chiangmai
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Post by chiangmai on Jul 30, 2017 6:45:35 GMT 7
I forgot to add, I'm asking the above in the context of assessing all my funds and I find that Vanguard gilts is already declared high risk and has a volatility of 14.44% and a Beta of 1.77 with a five year cum. return of 35%.
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Post by Fletchsmile on Jul 30, 2017 15:16:44 GMT 7
I forgot to add, I'm asking the above in the context of assessing all my funds and I find that Vanguard gilts is already declared high risk and has a volatility of 14.44% and a Beta of 1.77 with a five year cum. return of 35%. I don't have any particular criteria for betas or volatilities. I tend to look at them to more to understand about how the fund is run and its performance. Also to look how they compare to peers. It's nice to have some low volatility solid reliable performers at the core of a portfolio to build around. But the more diversified the whole portfolio becomes, the less I focus on individual fund volatility.
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Post by Fletchsmile on Jul 30, 2017 15:39:50 GMT 7
I'm actually very comfortable with the asset allocation percentages I've arrived at and they is broadly at the level I had imagined (I said initially 50/50), which is 53% equities and 47% bonds/gilts. Remember my starting point was 30%/70% hence I've increased my risk tolerance levels from an unrealistically low level, up to an acceptable level, it would be silly for me to push that envelope too far in the other direction and end up at an unrealistically high level. So for me at this moment in time I think asset allocation is a done deal. Geographic allocation is slightly more tricky at this stage but hand on heart I can say I don't have any bias for or against any geographic area. The issue there is identifying suitable assets that offer a different geographic spread and that means lots of research, research that requires confidence in my ability to accurately and correctly evaluate funds. I have drawn heavily on the advice offered by yourself and Fletchsmile thus far, for which I am extremely grateful. But going forward I need to develop my own capability and stand on my own feet when it comes to fund identification and evaluation - I'm not there yet! I can foresee there being a point in the not too distant future when I will want to trade at least one of my existing gilts and perhaps one other UK equities fund (Threadneedle) but the catalyst to do that will be my comfort level combined with a range of options that I can switch to. I hear you when you say the clock is ticking but for the moment that's OK, more haste and less speed etc. And yes, Brexit is a concern and its potential impact noted. I don't know how long you have been managing your own investments, clearly Fletchsmile's been at it a long time, I've been in the game for one week and six days so don't beat me up too much (or I'll have to have my best mate the duck from the other forum come issue a warning or two). Being comfortable with your portfolio and understanding what you've picked and why are among some of the most important elements of managing your own portfolio. While all the technical side is very important there's also an emotional side things too. Good that AYG questions the end game. Whether you're comfortable jumping straight to the end game or instead transitioning towards it and learning and gaining more comfort along the way is personal choice really. If the UK looked a complete basket case then more aggressive changes might be needed quicker. As it stands, I don't think it offers the best opportunities around but isn't the worst either. Other factors might include whether you plan going back to the UK for visits or even long term to the UK, or if there's a possibility you might/ might have to return for other reasons. For us, we're likely to stay in Thailand, but there are still reasonable % chances we might move for one reason or another, and after Thailand UK would be the most likely destination. So UK and GBP assets are still in the picture for us for those reasons and we still have some bias in contrast someone who would be indifferent to UK with no plans ever to go back in any circumstances The way to deal with the Thailand focus, may well also be to add investments here in Thailand rather than thru your UK holdings. The choice of Thai equity funds outside Thailand is very limited and there aren't many consistent out-performers you could count on either. The choice of Thai equity funds in terms of quality and quantity is better in Thailand. UK and global fund quantity and quality is obviously better where you're holding now than Thailand. If someone looked at my investments the various portfolios are not necessarily designed as stand alone, eg: - UK SIPP has some unusual balancing factors and less accessibility - UK SIPP and ISA have higher allocations to UK and developed markets - Stuff held in Thailand is mainly Thai equities - Singapore tends to be where my REITS and property holdings are, plus a Singapore and Asia bias etc So another strategy could be to bolt on additional parts in other portfolios. At some point I think you'd benefit from adding a Thai equity fund of some kind here in Thailand, plus something like TMB Property fund to help move more towards a more long term Thai expat asset allocation and remove the UK home country bias a bit further. Again transitioning and dipping your toes in may be a more comfortable way to start. When I started investing in Thailand just under 20 years back I started small, dipped my toes in and did more as I grew more comfortable. I also went with things that had worked for me in the UK and looked for things that had parallels here recognising the market can be different though. In fairness my situation as a younger, single guy was very different and could have left Thailand too. If settled and/or older and/or with a wife and or/kids sometimes you need to move at a different speed and in different ways
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chiangmai
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Post by chiangmai on Jul 30, 2017 16:33:59 GMT 7
I'm a bit geekish when it comes to mathematical analysis and have a tendency on occasion to want to take it too far some times, but I'll try hard to control myself in this project. The relationship between the return and the volatility factor is interesting, the higher the return the riskier the asset and the higher the volatility level is to achieve that return, that proves to be true in all my funds - Baillie Gifford returned 137% and has a 3 yr. vol. of 12.30 and Lindsell Train UK returned 122% with a 3 yr. vol. of 11.07. Contrast that with Royal London which returned 69% with a 3 yr. vol. of 4.3 and Henderson Diversified returning 58% at 6.95%. So the link between 3 yr. volatility, risk level and return is very clear, it'll be interesting to see what the minimum sampling period duration is before that rule becomes valid.....I'll work on that! I'm not sure what potential UK residency has to do with the extent to which UK funds are used in an investment portfolio, other than form a tax perspective of course. I think the idea of geographic diversification is sound and holds true regardless of where a person is resident and should have very little bearing to be honest. In fact, one of the great benefits of holding UK assets is the extent to which the financial services industry is regulated and protects the consumer, all of which has led to a more competitive industry and resulted in lower consumer pricing. I'm pretty comfortable now with the composition of my pension portfolio and when I get done with the rejig, probably at the end of next week, I'll sit back and watch for a month or so before establishing the second onshore investment fund which will almost certainly replicate my pension - in the mean time I'll continue reading. We had to cancel our meeting at UOB on Friday but will reinstate something during the coming week and I'll report back on what I find out that's of interest. I think setting up something in Thailand seems sensible for a number of reasons, not the least being that I have a series of 3.35% multi-year fixes maturing in September so I need a new home for those funds, sharpish! And I agree, UOB funds do seem seem to perform consistently well. www.uobam.co.th/en/homeBTW I think I've spotted the next major growth area so get in now to beat the rush: www.standard.co.uk/news/world/ukulele-sales-see-explosive-growth-as-small-instruments-popularity-soars-a3599566.htmlRemember, you read it here first.
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Post by Fletchsmile on Aug 2, 2017 12:18:37 GMT 7
And today's challenge is: I'm nearly finished making the changes to my pension portfolio but am stumped trying to find (my last) new fund that is suitable to fill a gap. I'm looking for an Asian/Far eastern equities fund that is minimal UK/US/EU - I'm persuaded against Schroders Asian Total Return by earlier comments - Invesco Perpetual Asian is a similar beast which I actually quite like, I also think emerging markets might be a tad too adventurous for my purpose. Stewart/First State Asia Pacific Leaders and Schroder Oriental Income are the best I've found thus far but performance is not great plus it's 30% in India (which may not be a bad thing, I was simply looking for greater market diversification). Thoughts and pointers much appreciated. Bit of relevant context on Asia in the article below. It moves on to 2 fund manager views (bit of marketing in there of course) and ideas to play it. I have a small holding in Schroder Small Cap Discovery. As it says a bias to smaller and mid-size companies so perhaps more growth potential. The heat map shows about 58% in Emerging Asia and 15% developed Asia. Also 5% North America, 9% South America, 4% Europe, 2% UK, 3% Africa and ME etc. So an Asia focus of about 3/4 but also elsewhere for diversification on smaller/mid global. It's outperformed the Asia sector generally and First State/Stewart Asia but is higher risk as a stand alone. Asia has lagged a bit in recent years, so if and when it picks up could be useful to have something with higher potential Matthew Dobbs – Schroder Small Cap Discovery www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/s/schroder-small-cap-discovery-class-z-accumulation www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/s/schroder-small-cap-discovery-class-z-accumulation/fund-analysis/geographical-analysis Jupiter Income. Had a look and its similar performance to First State/Stewart Jason Pidcock – Jupiter Asian Income www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/j/jupiter-asian-income-class-i-accumulation [Edit: don't know why the full links don't work to just click on some HL sites. Seems like only the first part will click and takes you to the section not the wanted page. Cut and paste works though] ============================== 20 years on: lessons from the Asian financial crisisLast month marked the 20th anniversary of the Asian financial crisis, which sent shockwaves through the region. The ‘Asian contagion’ dislocated financial markets across the globe and saw the economies of many Asian countries shrink to unprecedented levels. www.hl.co.uk/news/articles/20-years-on-lessons-from-the-asian-financial-crisis
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AyG
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Post by AyG on Aug 2, 2017 13:15:13 GMT 7
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Post by Fletchsmile on Aug 2, 2017 14:40:40 GMT 7
Yes I didn't see anything compelling to buy it after a cursory look. When you posted the link I had a further look. His recent performance as you say has been poor. 3rd quartile in each of last 4 discrete 12m periods (3 of those the lower part of the quartile too). That would rule him out as a manager for me for new purchases in particular and I wouldn't buy it today. This particular fund was launched in Feb/March 2016 so only just over a year old. Looks like he has lost his mojo and remains to be seen if this fund can help him find it again Funnily enough as you say I also used to hold some of his Newton Funds. When I look back as to why I sold them (I often make a brief note in the spreadsheets I use) it was mainly because he was leaving, plus a little rebalancing as well. Glad I didn't follow him to Jupiter. If a fund manager leaves I tend to wait a little and see before buying where they go. Even with Neil Woodford I didn't buy straight away. Unlike Woodford, in Pidcock's case he just dropped off my radar until you mentioned him. This is another of the things I like about Hargreaves Lansdown. They send alerts and links to articles/fund updates on funds I hold as well as general info. Plus that they also removed him from the Wealth 150 preferred list, noting Pidcock was the main reason he was on in the first place also are factors. By no means all the funds I hold with them are on their W150 list but it is another I look at, knowing they've done their research and like something is a plus factor. Ironically in this case Jupiter Asian Income is on their W150 list now www.hl.co.uk/funds/research-and-news/fund-news--and--alerts/newton-asian-income-and-emerging-income-funds-removal-from-wealth-150-2015-05-20I like that feature BTW on trustnet that you highlighted for looking at managers. I find Trustnet very useful and combined with HL I used them a lot for analysis.
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chiangmai
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Post by chiangmai on Aug 2, 2017 15:18:02 GMT 7
I seem to discover new or corrected data almost daily and that means my percentages keep moving. As things stand, having made five fund changes thus far, the picture looks like this: Equities = 53%, of which 44% are UK centric Bonds = 36%, of which 66% are UK centric UK Gilts = 10%, all of which are UK But UK equities only account for 23% of the portfolio in monetary terms whilst UK Bond holdings (excl. Gilts) account for 25%, expressed in those terms the numbers don't seem too unreasonable. It's when you say that 57% of your holdings (including Gilts) are UK centric that the numbers sound poor. My mission currently is to pull back the equities number to closer to 50% and to try and reduce the UK element across the board. That may mean offloading a fairly decently performing equities fund in favour of a non-UK bonds fund. But the latest exercise has identified a serious shortfall in non-UK bond holdings, something I will work to resolve, I can only guess that the true extent of UK holdings at the outset was much higher than I understood at the time.......all quite challenging but extremely interesting. OK AyG, I've put my note book down my trousers, thrash away.
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Post by rgs2001uk on Aug 2, 2017 21:31:14 GMT 7
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chiangmai
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Post by chiangmai on Aug 3, 2017 3:18:40 GMT 7
I also like Baillie Gifford, I hold their International B which has done very well over the past four years. I also like your Henderson Far East but 20% in China leaves me feeling unsure, although I will do some reading up. "why are you willing to forego growth for geographical location?" - it's not a case of foregoing growth in favour of geographic location so much as it is trying to achieve balance between the two and that's not especially easy. I'm trying to work towards holding a solid geographical spread which reduces the risk of holding an overly UK centric portfolio, to achieve that currently means making some difficult decisions about whether to trade off a reasonably well performing UK equities fund in favour of finding a reasonably well performing non-UK equities fund - think cake and eat it! On the equities front I hold six different funds, four of which are nicely spread geographically including Lindsell Train Global, Baillie Gifford International and Stewart Asia Pacific. The other two are mostly UK equity funds but are solid performers including Lindsell Train UK and Threadneedle - improving the geographic spread and reducing the risk amongst that group means trading (probably) Threadneedle for a non-UK fund in the hope that it performs similarly, in practice I am unlikely to want to do that at this stage. My bonds profile presents a similar picture, four funds that are not stellar performers but are all acceptable in the current environment, are low risk and three out of the four have holdings that are nicely spread globally, these include Fidelity, Royal London and Henderson - the fourth fund is mostly UK but is the best performer and the most solid of them all so you see the dilemma. Once again in practice I am unlikely to want to change the make up of my bond holdings at this stage. That only leaves a single UK Gilts holding for me to do something with. But having reduced my Gilts holdings from four funds to one and now being left with only a single Gilts fund that has a decent track record, I'm likely to hang on to that also for the time being. I think my two options to address both the issues of being slightly overweight in equity assets and my slightly excessive overweight UK holdings are: 1) trade the Gilts for a low risk non-UK bond, or, 2) balance the portfolio downwards using the accumulated proceeds to buy another non-UK bonds fund - I shall consider both those options. but may well do nothing! I do firmly believe that spreading assets geographically is very important but achieving that is not necessarily something that has to be done in one fell swoop, unless you're holding a lot of duff assets that is or unless you want perfection from day one. Instead I think it is something that I'm going to work towards as the opportunity arises. Others may not agree with me but statistically my UK risk is not onerously high, in monetary terms only 23% of my equity funds are UK based whilst 25% of my bond holdings are.........and then of course there's my single Gilts fund which is entirely UK. All in all I'm not displeased with my holdings picture and I'm certainly not going to loose sleep over it.
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Post by Deleted on Aug 3, 2017 4:20:22 GMT 7
What would you do with £16K you won on the Irish lottery?
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chiangmai
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Post by chiangmai on Aug 3, 2017 5:31:33 GMT 7
What would you do with £16K you won on the Irish lottery? What I would do, because I'm me and because of my circumstances/risk tolerance etc., I would invest 5k in CIMB Principal LTF, 5k in UOB GCG LTF, 5k in 1.70% fixed rate savings at CIMB and then go to the islands for a week with the remainder. That should double my investment in five years plus give me a small amount of tax efficient income in the meantime AND a nice rest at the beach. Caveat: others will almost certainly be able to give you more appropriate options but will probably want to understand a bit more about the importance of that 16k in your financial life and future. Congrats. by the way!
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chiangmai
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Post by chiangmai on Aug 3, 2017 5:40:21 GMT 7
What's the best way for a Thailand resident, UK expat to hold an investment portfolio? I want to be able to trade cost effectively and efficiently on a regular basis. I also want some legal protection of the variety offered by the UK Financial Services. I do not want to pay tax on my investments, especially if/when the Chancellor removes my UK Personal Allowance. I want the investments to be liquid in the sense I can redeem them without restrictions, on demand. I want my wife to be able to assume ownership of those investments when I shuffle off. An offshore wrapper at Transact is pricey and limits tax free withdrawals to 5% per year - not a starter. I want, I want I want, sounds just like my ex bloody wife!
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AyG
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Post by AyG on Aug 3, 2017 6:59:54 GMT 7
Open an offshore brokerage account. Note, however, that many such brokerages do not support funds. One that does is Luxembourg-based Internaxx. However, the range of funds available is not as extensive as that available in the UK, and many names will be unfamiliar. www.internaxx.com/
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Post by Fletchsmile on Aug 3, 2017 15:47:00 GMT 7
What's the best way for a Thailand resident, UK expat to hold an investment portfolio? I want to be able to trade cost effectively and efficiently on a regular basis. I also want some legal protection of the variety offered by the UK Financial Services. I do not want to pay tax on my investments, especially if/when the Chancellor removes my UK Personal Allowance. I want the investments to be liquid in the sense I can redeem them without restrictions, on demand. I want my wife to be able to assume ownership of those investments when I shuffle off. An offshore wrapper at Transact is pricey and limits tax free withdrawals to 5% per year - not a starter. I want, I want I want, sounds just like my ex bloody wife! Will be difficult to get a single portfolio which is best at all of those. Different places have different strengths and weakness, so I use different places for different reasons. The main places I hold investments are: UK - Hargreaves Lansdown (HL) Singapore - Standard Chartered (SC Sg) Thailand - Standard Chartered Thailand (SCBT) Thailand - TMB If I rate for each of your criteria: 1) Trading cost efficiently and effectively: - HL cheapest on funds and larger value share/investment trusts transaction as it is fixed cost - SC Sng cheapest on low value transactions (as a Priority Banking client) for shares and ITs. Most expensive for funds - Thailand SCBT and TMB no share dealing. Between UK and SG on funds 2) Legal protection - HL highest - SCB Sg second - Thailand last - but not as bad as self proclaimed "experts" with the attitude never invest in Thailand claim 3) Tax - generalising - Singapore best - Thailand close second - UK would need to distinguish more the vehicle used i.e tax efficient SIPP or ISA vs normal. Normal would be inferior to Singapore and Thailand for most people, although may depend on your income/capital gain levels 4) Liquidity - All pretty similar. Depends more on what you invest though. - HL and TMB UK have the easiest platforms for funds - SCBT is more manual and settlement takes slightly longer - SC Sg is manual for funds because we have in joint names. Shares is similar to UK - Unit trusts and generally easier and more guaranteed in terms of liquidity than shares or investment trusts 5) Wife taking ownership - Without a doubt dealing with stuff in Thailand in her own language and being able to just call in face to face easily to discuss - UK and Singapore would need some help/support navigating the system - Best to have wills in each location too My view is that my wife will have access to Thailand assets in her own name first while she sorts out my stuff. She will then be able to sort out Thailand fairly easily, then Singapore relatively OK, while waiting to navigate thru the UK stuff. Key being she will have enough to be getting by with while she does so 6) Offshore wrappers - Generally I don't like them, and they are just an unecessary extra cost. More often than not to benefit the selling agents rather than you. Offshore Portolfio Bonds (OPBs) being one of the ones I dislike most. Often no need for such wrappers with the 3 places I hold - The main exception I would call would be on larger estates that are seeking to mitigate UK inheritance tax. Sometimes trusts can be useful. But placing stuff in your Thai wife's name and in Thailand is a very good way of dealing with IHT at low cost for many people. The stuff we have in Singapore is also joint names, so automatically halves any UK IHT compared to just my name. Thai IHT won't affect most people/Thais given the high Thailand threshold and fact overseas assets are excluded My thoughts are at this stage in my life it isn't either/ or but a combination works best. If and when I think I'm in say the last 5/10 years of this life I would consider moving most things to Thailand for simplicity if we're still here. Maybe slightly higher transaction costs, and less choice, but there's enough available here to do that. At that stage succession planning and convenience may outrank chasing superior performance/more quality/choice. Edit: Forgot to add I have a Thai brokerage account at KGI. Mainly to trade SET futures and options and very rarely Thai shares. So all Thai focused, and obviously the best way to trade Thai shares and derivatives. It will be very easy for my wife to close after my demise.
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