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Post by Fletchsmile on Aug 8, 2018 0:03:37 GMT 7
I'm in the process of changing some arrangements for my mum's investments. UK based retiree, aged 80. Long story short this will include selling all the existing investments. So as I'll be doing that, it's an opportunity to start from zero in terms of what the investments are.
Most of her expenses are covered by state and private pensions, and this investment portfolio is just to top up that and pass on to her heirs. Occasionally she may want to sell a bit from capital or generate a little extra income, but unlikely to need to withdraw more than 4% a year on average. Some years could be zero withdrawal, and others higher. Taxes aren't really an issue, and at aged 80, not exactly in the building wealth state of life - although she likes the idea of passing money onto heirs.
I can't really be bothered with investment trusts, and charges on buying/ selling, issues with discount vs NAV etc - I'd hate for example something to happen in a year or two's time and be hit with a triple whammy of market crash, illiquidity and widening discounts due to unfortunate timing - particularly if winding up the estate. So the simple unit trust route of getting in and out without charges and at NAV is preferable, and less admin/ hassle.
I have in mind buying equal amounts in about 7 unit trusts (so 14.3%-ish weighting each). This is a reduction and simplification of what she now holds. Initial thoughts are as follows:
- Lindsell Train Global Equity = Global Equities
- Lindsell Train UK Equity = UK Equities
- Jupiter European = European Equities
- First State Asia Focus = Asian Equities (includes both Asian EM and DM)
- Baille Gifford Managed = Mixed Fund 40%-85% equities
- Royal London Sterling Extra Yield Bond fund = Fixed Income high yield
+1 more
Currently around a third is in fixed income, and that has served quite well over the last 9 years, so I'm happy to stick with this and add a bond/fixed income fund as the final 7th fund. Though there is probably less need for income yield from the portfolio than the past.
I'll be managing it from Thailand using Hargreaves Lansdown's online platform in the UK. Her cash reserves are fine, particularly bearing in mind pension income, so this portfolio is mainly for investment.
Any thoughts on anything from people on here would be welcome from any angle mentioned here or not.
eg allocations, funds suggested, improvments etc etc
Cheers Fletch 
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Post by rgs2001uk on Aug 8, 2018 20:20:35 GMT 7
Why does it need to be 7 and not 6?
Apart from assest allocation and spread I doubt if holding 7 instead of 6 will produce more growth, all it does is spread risk.
Seeing as you are resident financial guru I wont even bother asking about inheritance tax.
Sorry I know nothing of UTs, more of an IT man myself
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Post by Fletchsmile on Aug 9, 2018 19:19:50 GMT 7
Why does it need to be 7 and not 6? Apart from assest allocation and spread I doubt if holding 7 instead of 6 will produce more growth, all it does is spread risk. Could be 6. I had in mind between 5 and 10, based on a variety of reasons and about 7 seems to fit.
5 is getting a bit low because of concentration risk/ wanting to spread risk/ diversify and not wanting more than 20% in any one fund. 10 is getting a bit high, as I want it focused, and not too much admin/ monitoring.
I wanted the main geographies for equities of UK, Global, Europe, Asia. Then some bond exposure/ lower risk funds that would be more resilient to a crash.
I also quite like the idea of putting the same amount in each fund to keep it simple, and aid with rebalancing. Although again this isn't essential.
With 4 funds being pure equity, only 2 in fixed income / mixed feels a bit low. If the mixed is say 50/50 equity/bond split, then with 6 funds like that we're talking around 80% total in equities and 20% bonds/other - feels a bit high for equities. If I use 7 funds, the total is about 2/3s total in equity if the last is a bond fund. So just tweaking the overall allocations really. |
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Post by rgs2001uk on Aug 9, 2018 21:13:18 GMT 7
Looks to me as if you are trying to give them all equal weighting, why?
One thing I have learned over the years, not every market will behave in the same way at the same time.
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chiangmai
Crazy Mango Extraordinaire
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Post by chiangmai on Aug 10, 2018 11:48:55 GMT 7
I like all your choices except LT UK which I think is a partial overlap with LT Global, I hold five of your seven and have been very pleased with their performance.
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Post by rgs2001uk on Aug 10, 2018 23:29:07 GMT 7
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Post by Fletchsmile on Aug 11, 2018 5:51:17 GMT 7
Just on our way back to BKK. Had a nice month in UK. Decent weather for once. July was hottest since 1976 I heard. Much better choice of beer as you say. Very cheap too at the supermarket for proper beers. A quid a can! I’m never bothered with the exchange rate. Spend GBP on UK credit card in UK, and spend THB Thai credit card in Thailand. Sorted. No worries |
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chiangmai
Crazy Mango Extraordinaire
Posts: 6,312
Likes: 5,334
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Post by chiangmai on Aug 11, 2018 10:04:33 GMT 7
I'm also in the UK and now approaching the one month mark, the weather in the South has been glorious and frequently around 32 degrees. Up norf however, Lancaster struggles to get much above 22 degrees on a good day - the beer however is very good, Ruddles at GBP 1.65 a pint at Weatherspooms is a bargain, otherwise it's craft beers at circa GBP 3.50 a pint, beats the pants off Chang even on a bad day. The headline however is I've become addicted to Greggs bacon butties for breakfast, however did I manage to survive without them, I fear the waistline will suffer.
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Post by rgs2001uk on Aug 11, 2018 14:06:49 GMT 7
^^^^ two top posts there lads.
Greggs bacon butties, stop will you, please, you are p**sing me off, for some strange reason I am thinking about chip shop curry sauce, the perils of expat life.
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AyG
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Post by AyG on Aug 11, 2018 16:38:26 GMT 7
What about going for a bit of diversification/inflation protection with either an infrastructure fund or physical property fund. For infrastructure I like the Lazard fund, but it may not be available on the HL platform. First State almost certainly is.
For property, perhaps L&G UK Property?
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Post by Fletchsmile on Aug 14, 2018 13:47:54 GMT 7
I like all your choices except LT UK which I think is a partial overlap with LT Global, I hold five of your seven and have been very pleased with their performance. Yes, I hold quite a few of them myself, and have been happy with them. When picking for my mum, I like to either own them myself and/or them be on Hargreaves Lansdown W150 list. HL's Wealth list is a reasonable/positive factor to consider knowing the research they do, but by no means essential, and in some cases I don't like their picks.
As you say there's some overlap between LT Global which holds around a quarter UK stocks in its portfolio and LT UK. As she is UK based and a UK pensioner, I'm not too concerned with UK equities overlap though
Both the LT funds have been great over the last few years and I like them as a smaller fund management house. TER after discounts at HL are only 0.51% and 0.54% which is great value for 2 actively managed funds that have been consistently outperforming
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Post by Fletchsmile on Aug 14, 2018 14:09:37 GMT 7
What about going for a bit of diversification/inflation protection with either an infrastructure fund or physical property fund. For infrastructure I like the Lazard fund, but it may not be available on the HL platform. First State almost certainly is. For property, perhaps L&G UK Property? Yes, I've been in 2 minds about adding a little infrastructure / property exposure or not.
I don't really want them at the same weighting as the other sectors though, as while they can be useful for diversification, at the end of the day, they are still often equity based for infrastructure,
For property fund holdings they can also often contain equity based investments, and even if not can occasionally bring illiquidity issues that can sometimes crop up. If myself I wouldn't bother too much. But based on her age, there's a possibility I could be liquidating the portfolio in a few years, which could coincide with a slump and illiquidity would be an inconvenience if winding up an estate and the unit trust assets were frozen/closed like several under the last crisis.
I was in 2 minds whether to give 1 property and 1 infrastructure fund half the weighting of other funds.
Inflation protection is a reasonable point. I thought about a global inflation linked bonds tracker or even decent actively managed fund, but performance for those has been poor over the last 5 years. e.g.
for sterling inflation linked bonds there aren't many corporates and so it's the gilts sector. Performance has been acceptable there. No active fund really stands out, so again a tracker such as:
iShares
or L&G, but not quite sure what caused the gap in 5 year performance between the two given they are trackers, and will look into that
charges are low on both at 0.15% and 0.1% (L&G after HL discount)
Insight UK run an active fund, in this index linked sector and have slightly outperformed iShares over 5 years, but total charges of 0.35% are higher
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Post by Fletchsmile on Aug 14, 2018 17:09:37 GMT 7
Looking thru the fixed income space. Royal London Sterling Extra Yield has been my first choice for many years, which is why I put it on the original list A UK index link gilt tracker such as iShares or L&G has some appeal as mentioned. Then there are strategic bond funds. The bond space isn't necessarily going to be straight forward in years to come, and the flexibility these type of funds offer may be useful. Also if there is a global crash, depending on cause they may offer some additional protection. 2 currently in mind are: Sanlam Strategic Bond Fund www.trustnet.com/factsheets/o/0yrd/sanlam-strategic-bond-p-acc-gbpStable fund manager for about 9 years. Small and flexible. Consistently beat the sector cumulatively and each of the 5 discrete year rolling periods. Baille Gifford. Bit cheaper and better known name, but weaker performance, although beats the sector cumulatively and each of the 5 discrete year rolling periods.
sector has 83 funds
Artemis and Jupiter have funds in this space too, which I've held in the past. |
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Post by Fletchsmile on Aug 14, 2018 21:04:30 GMT 7
I'm also in the UK and now approaching the one month mark, the weather in the South has been glorious and frequently around 32 degrees. Up norf however, Lancaster struggles to get much above 22 degrees on a good day - the beer however is very good, Ruddles at GBP 1.65 a pint at Weatherspooms is a bargain, otherwise it's craft beers at circa GBP 3.50 a pint, beats the pants off Chang even on a bad day. The headline however is I've become addicted to Greggs bacon butties for breakfast, however did I manage to survive without them, I fear the waistline will suffer. We were up north, for the month and was often above 30.
On the beers you can see how the UK pubs are struggling: 3 pound plus a pint for bitter/ales in the pub, but only a pound or so for a can in supermarkets.
Also reminds you how poor Thailand is for beer. Difficult to get good ale/bitter in Thailand - very limited choice - and you're paying ballpark 4 quid in a supermarket or 5 quid in a bar. More expensive of course than UK
Thai lager at around 40 baht a bottle in 7-11 is similar in price to UK beer at a supermarket, but not a patch on UK beer in terms of quality.
Glad I'm not on a backpacker's budget when it comes to drinking here  |
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Post by rgs2001uk on Aug 14, 2018 21:23:23 GMT 7
I'm also in the UK and now approaching the one month mark, the weather in the South has been glorious and frequently around 32 degrees. Up norf however, Lancaster struggles to get much above 22 degrees on a good day - the beer however is very good, Ruddles at GBP 1.65 a pint at Weatherspooms is a bargain, otherwise it's craft beers at circa GBP 3.50 a pint, beats the pants off Chang even on a bad day. The headline however is I've become addicted to Greggs bacon butties for breakfast, however did I manage to survive without them, I fear the waistline will suffer. We were up north, for the month and was often above 30.
On the beers you can see how the UK pubs are struggling: 3 pound plus a pint for bitter/ales in the pub, but only a pound or so for a can in supermarkets.
Also reminds you how poor Thailand is for beer. Difficult to get good ale/bitter in Thailand - very limited choice - and you're paying ballpark 4 quid in a supermarket or 5 quid in a bar. More expensive of course than UK
Thai lager at around 40 baht a bottle in 7-11 is similar in price to UK beer at a supermarket, but not a patch on UK beer in terms of quality.
Glad I'm not on a backpacker's budget when it comes to drinking here Thai fizzy water, 40 baht, foreign made in Thailand fizzy water, 80 baht per bottle, foreign imported fizzy water, 120 baht. Who in their right mind is going to pay 120 baht for a bottle of imported Stella? Wonder what The Don has to say about it? |
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