AyG
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Post by AyG on Nov 26, 2015 13:30:29 GMT 7
25% TMB M Plus 15 % Krugthai Thanasap fund 20% TMB Global Quality Growth 15 % K European Equity 15 % K Japan 15% Aberdeen India Growth To me that looks like a pretty dire asset allocation if your objective is for your money to grow in value. The first two funds are a short term bond fund and a money market fund. That's 35% of your investment guaranteed not to keep up with inflation. TMB Global Quality Growth is good for a novice investor. It invests in global large cap equities through the Wellington Global Quality Growth Portfolio which is 5* rated by Morningstar. Now I don't understand the European, Japan and India funds. Why take a balanced, global equity allocation via TMB GQG and skew it with these three rather odd funds? In particular, the Japanese market has gone nowhere for more than a decade, plus the particular fund has underperformed its benchmark in each of the last four years. The Indian fund is extremely volatile, and whilst India is the most promising of the BRICs at the moment, that's no reason to hold it. If you want to boost performance by taking on higher risk, better to do it through a broader Asia Pacific fund or Emerging Markets fund than by cherry pick individual countries. And where's the exposure to the SET? If you're living in Thailand you'll surely want some exposure to your home economy. Then what about diversification through other classes such as physical property, infrastructure, natural resources? I'd also note that three of the funds are "growth" funds (TMB GQG, K European, Aberdeen India), yet research over the years has shown that income funds typically outperform growth funds (with dividends reinvested).
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Post by francois on Nov 26, 2015 15:20:51 GMT 7
Thanks AyG Looks like this portfolio needs some reconsidering Oh dear..
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AyG
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Post by AyG on Nov 26, 2015 19:42:10 GMT 7
Francois
I think you need to step back a little. The most important thing is not the actual funds, but the asset allocation between classes. You need to understand the characteristics of each asset class and decide how much you want to put into each one. Classes you should consider are:
Thailand equity Global equity Property Bonds (medium to long term - not the short term ones suggested) Cash
Other classes to consider are:
Infrastructure Natural Resources Asia Pacific Equity Global Emerging Markets US Equity (though global equity is going to be heavily invested in the US) European Equity
Classes I don't like:
Absolute return Japan equity BRIC funds Trigger funds/structured finance Gold
Once you decide on the overall asset allocation you can then move to choosing individual funds.
I'm sure if you'd care to post your proposed asset allocation here you'd get get honest feedback from myself and others.
Incidentally, I presume you're not a tax payer in Thailand, hence no LTF investments. If you are, these should probably be at the top of your purchase list.
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Post by Fletchsmile on Nov 26, 2015 20:15:17 GMT 7
Thanks AyG Looks like this portfolio needs some reconsidering Oh dear.. One of the most important things is that you yourself are comfortable with whatever you finally go for. What suits you may not suit AYG, myself, realisedyurgency, rgs etc It's well worth doing all the considering and reconsidering beforehand to get to that stage. Better to put the time and thought in before. Exploring options and ideas now is time well spent, as there's no particular rush to invest immediately where the markets are, so take your time... When I look at the selection of suggested funds, I do think it can be improved on.
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Post by Fletchsmile on Nov 26, 2015 21:16:54 GMT 7
25% TMB M Plus 15 % Krugthai Thanasap fund 20% TMB Global Quality Growth 15 % K European Equity 15 % K Japan 15% Aberdeen India Growth Yes room for improvement. Funnily enough I was invited to a lunch for StanChart clients today, so I can see where they would be coming from on some of it. From a quick look TMB Quality Growth makes sense as a core holding for someone starting out, although I haven't looked into it's history for performance. A reasonable global equities fund, and for a new portfolio a core global equity fund is a reasonable addition. K.European, K.Japan, and Aberdeen India, Stan Chart have probably chosen as they have a house view on these markets and think Europe, Japan, and India will do well, compared to say US which is overvalued, in their view and this was raised today. That I can understand. However, 45% of a new portfolio on particular views is too high for my liking. If you have a good solid balanced portfolio already, then these might make sense to add some views/ exposure around the edges or if someone was going to very actively manage their portfolio rather than longer term buy and hold. For me: - I wouldn't allocate 45% to these 3 funds - I do like Europe, and think value is good at the moment. Earnings will likely pick up. Some yes, I would consider a European fund, but maybe 10% - I also like Japan, but less so. So maybe would pick one again no more than 10% - The % I would allocate to Europe and Japan though would be after considering where to put elsewhere. These would be after picking my solid core of funds. - While India may look appealing to some now, I wouldn't pick this fund. Aberdeen do have a strength in emerging markets but I generally dislike picking single country emerging markets. They are more volatile than developed markets and unexpected events seem to crop up more. Also it is very difficult to time these markets, even when they look good value it can take a while before it translates into returns. Yes potentially higher reward, but more risk too. Hence, if picking an emerging markets fund I would prefer a broader fund where an experienced manager can move between different markets as they see fit. Also if India tanks, this fund has nowhere to go as it can invest only in India. So the only choice is sell it (often a new investor will do this too late) or hold and wait which can take a long time, and meanwhile miss out on good opportunities elsewhere. So I would prefer something like Aberdeen Global Emerging Growth fund, if I wanted emerging markets, not a single country fund. Their EM fund has waned a bit in recent years but when EMs pick up it should improve, and if any one market moves badly the expert fund manager moves it for you, rather than you yourself having to sell. So: Europe 10% max Japan 10% max A wider Emerging market fund than a single country are some pretty significant changes I would suggest to anyone using this as a starting point A key omission in the suggestion for me is a good Thai equity fund. This is for Thai baht exposure, for someone needing THB assets, as well as equities. Also need to bear in mind that Thai equities are an emerging market, so this would affect and reduce any money earmarked for Emerging markets. Hence Aberdeen India is a definite no for me because it's single country and the weighting too high if you are also adding Thai equities. Anyone young living in Thailand should have some Thai equity exposure in my view. If buying thru Stan Chart I would go for UOB Good Corporate Governance Fund as first choice. It's an LTF but you can still buy it regardless and just not get the tax benefit if you pay tax. From a good fund management house. Consistent top 10 performer. I've held it for about several years. Aberdeen LTF is also a decent second choice for Thai equity fund, although Aberdeen have done less well in recent years, they have a solid consistent history here. I wouldn't pick a Thai dividend paying equity fund in Francois case because of tax. Any dividend will suffer either 10% withholding tax or tax at your marginal rate. As you don't require income, it makes sense to buy units that don't pay a dividend, you can't be worse off. If you like index/tracker funds then TMB has a more passive style, but for me this is an area where active management comes in, so I wouldn't pick any TMB Thai equity funds. Just as an aside, Bangkok Bank have some reasonable Thai equity funds. Bualuang LTF and Bualuang Top10 are consistently good performers. I think realisedurgency mentioned he bought thru Bangkok Bank Chaing Rai branch. You don't have to buy all the funds through the same place, so it may be worth considering Bangkok Bank for Thai funds, and someone like StanChart or TMB for others. I don't like Bangkok Bank's non-Thai fund range it is too small and way too little choice. So worth a thought as to using Bangkok Bank Chiang Rai just for Thai equities. I don't like the other 2 funds Stan Chart mentioned. Thai fixed income isn't that attractive nor are money market funds. So on what Stan Chart said I think it could be part of your solution: TMB Quality Growth - OK - maybe even higher at 25% K.Europe - maybe but no more than 10% K. Japan - maybe but no more than 10% Not the others Then add in a quality Thai fund for 25% such as UOB Good Corporate Governance LTF, Aberdeen LTF or Bualuand LTF or Bualuang Top10. I've seen these funds in Thailand top10 perfomers consistently. If you looked at the Top10 on morningstar over 10 years they'd be listed. I hold the UOB one and Aberdeen. I don't hold the Bangkok Bank ones. Stan Chart don't offer them. I asked a few years back It;s an evolving process in thinking through these, but so far, having read input here and my own views, I'd be OK with - Good Thai equity fund 25% - any of those above - Good Global Fund 25% - TMB Quality Growth looks as though fits the bill
These two are a core to build around other investments. To that I'd add a property fund, and would choose TMB Property Income Fund. I'm a bit reluctant to add more than 10% at this stage given it's new. It's
That to me would be a decent 25%+25%+10% = 60% and obvious choices for first 3 picks.After that I'd need to think a bit more for the remaining 40%. Sounds like you also need to think a little more too I'm actually in the process of rebalancing/ reviewing my funds held at StanChart, and will make a few more suggestions also. Normally I'd just suggest some, but don't want to suggest funds and then say I've sold it myself I'll still keep some but am streamlining it. I'm also looking at opening a fund account with TMB, so trawling through their choices as well I do have a complete list of the 160 or so funds StanChart sell, and am comparing that to TMB's offerings One other fund worth a mention is the KrungrsiGlobal Income fund. This is now available in both dividend and non-dividend versions. It's a great core holding as mentioned on the income thread bigmango.boards.net/thread/2807/simple-income-yielding-portfolio-thailandThe main disadvantage is that it requires a minimum investment of THB 500,000, and after that you can add 2k at a time. Worth considering later once you've built up more wealth. This is one fund I'm switching my kids funds into, They have a dozen funds each thru Stan Chart, and we're selling some to put in there. I've been investing a small monthly amount for them each month for 9 years or so since birth. This fund wasn't available then but I like it Cheers Fletch
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Post by Fletchsmile on Nov 26, 2015 21:45:47 GMT 7
Went to the main TMB branch in Chiang Rai to inquire about investing in some mutual funds and starting a portfolio. Maybe it's not really something they're used to up here? They had to make some calls to Bangkok and then they printed 2 sheets with their available funds. They recommended their no fixed account, they said that would be better. I like the idea of building some wealth here to start with and then going offshore later when i have a bit more expertise. Staff at TMB are likely to know about the bank's products - not those of TMB Asset Management for which they only act as agents. That's why they pushed you towards opening a bank account, rather than a TMBAM account. If you try again you should perhaps take a completed TMBAM application form with you. It can be downloaded from www.tmbam.com/v6/en/service-fund-account.phpThe "no fixed" account most certainly doesn't fit with building wealth: inflation will eat away at the spending power of your investment, despite the interest. For what it's worth, here's what I might do in your circumstances: I'd go with a simple, four way asset allocation such as: 25% Thailand 25% Global Equity 25% Property 25% Bonds Then as I became more knowledgeable and confident, I would probably adopt a more complicated asset allocation model. If I went with TMB Asset Management, that allocation might be implemented as 25% TMB SET 50 Dividend. (Historically, higher dividend stocks outperform lower dividend ones.) 25% TMB Global Quality Growth 25% TMB Property Income Plus 25% TMB Aggregate Bond or TMB Corporate Bond (despite the name, the latter is 41% invested in Thai government bonds) Or with Standard Chartered. (Caveat: I don't have an account with them, so can't be certain all these funds are available on their platform.) 25% Aberdeen Thai Equity Dividend 25% UOB Global High Dividend 25% TMB Property Income Plus 25% Kasikorn K Fixed Some of these funds will generate income which would need to be reinvested to maximise returns. The allocations are logical, and someone wouldn't go far wrong with these to start. To me they are a better balanced start than Stan Chart. To add a couple of notes: - Most of TMB's range can also be bought thru StanChart. So someone could probably combine/interchange funds on the two lists if buying thru StanChart. - I wouldn't go for income funds because of witholding tax and admin unless someone specifically wants income and just wants to sit back and collect dividends. Often very similar funds are available from the same fund management company just without the dividends, and as accumulation units/ or a slightly different name. For someone looking for income they're worth a look, although I'd prefer other choices for 5-10 years not requiring income. TMB's Thai equity funds tend to be closer to passive funds/ trackers and I prefer active. I do hold a small amount one TMB Thai equity fund as I know it's a tracker but it doesn't really compare to the active funds over long periods. - Also I prefer the 4 Thai funds mentioned in the post above, just based on having followed Thai equity funds over the years, and watched these for years, and holding them, and seeing them in long term performance tables year after year - Property fund makes sense. I know we both have an interest in this fund and own it, and are wondering about the next div I'd include it. The only reason I'd add less than you is it being a relatively new fund. So I'd start with about 10% (maybe 15%), and see how. Also 25% is a bit heavy for me on Property. The basic 25% Thai + 25% Global Equity I'd agree with. Just different Thai funds then say maybe consider less in the Property Fund of around 10% perhaps a bit more 15%. Fixed Income here in Thailand isn't any easy choice. I do hold TMB Corporate Bond fund and it's OK. Over several years it has outperformed cash a bit, not much. So again I wouldn't probably put more than 10% in it. Also I'd prefer to expand a little more than just Thai bonds which aren't that great value at the moment. I'd add something like Aberdeen's Global Emerging Opportunities Bond Fund which is a bit higher risk but higher return and/or TMB Global Bond Fund. They compliment the Thai funds you mention as they are wider in geography not just Thailand, and historically higher returns. So it would be Thai bonds + global bonds + EM/High Yield bonds with a spread over a wider bond range I do think AyG's portfolio suggestions are a good starting point - better than Stan Chart - just would be tending more towards: Thai equity Fund 25% - any / some of the 4 Thai funds I mentioned above, UOB, Aberdeen or Bualuang (from BKK Bank) TMB Global Quality Growth 25% TMB Property Income Fund 10% (maybe 15%) TMB Corporate Bond Fund/ TMB Global Bond Fund / Aberdeen Emerging Opportunity Bond Fund 0 - 10% in each, so up to 30% total. I wouldn't want more than 10% in each
But all in all similar ball park even though what I've just mentioned above is only up to about 90% (maybe a bit less) Leaves 10% or so for something else. I do like European equities
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AyG
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Post by AyG on Nov 27, 2015 9:17:48 GMT 7
I've been thinking about risk. What Standard Chartered has done is take what I consider to be a pretty risky portfolio (15% India in particular) and then watered down the risk with short term fixed income. That's certainly not the way I like to do things. Seeing an individual fund fall 35% or 26% (as the underlying Aberdeen India fund did in 2008 and 2011 respectively) would be upsetting. The same fund went up 61% in 2009 and 39% in 2010 and 42% last year. It's way too volatile, and at current prices I wonder if we're in bubble territory.
I agree with Fletch that 25% in property is a high allocation, and I didn't intend that to be a long term percentage. As investors get more experienced they typically add more asset classes. (And often add too many asset classes. I need to keep reminding myself that just because an asset class exists I don't need to hold it.) Certainly, longer term an allocation of around 10% would be more reasonable.
I do like property as an asset class (preferably physical property) since the income stream is fairly reliable (almost bond-like) and capital appreciation of the underlying properties provides some protection against inflation. Really it behaves somewhere between equities and bonds. It provides diversification. The TMB fund invests in REITs, so is liquid. (At the moment I'm locked into an Asian Property fund that owns physical properties that is in the process of winding up. It's going to be a few years before I get all my money back. Not happy about that.)
Conventional wisdom is that one should hold bonds. I included them in my allocation to avoid being too controversial. However, I personally don't hold conventional bonds*. The upside potential is very limited. (At maturity they get redeemed at par.) The downside, however, can be significant if there are increases in interest rates and you need to sell. (Individual investors can always hold to maturity. Fund managers can be forced to sell at inopportune times if there are fund redemptions.) Again, the conventional wisdom is that they provide diversification away from equity risk. That may well have been true in the past, but it hasn't been true for a few years now. It may become true again in the future. No one knows.
* Bond classes I do consider worth holding: inflation linked bonds (e.g. US TIPS), Emerging Markets $ denominated bonds.
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Post by realisedurgency on Nov 27, 2015 15:20:43 GMT 7
Conventional wisdom is that one should hold bonds. I included them in my allocation to avoid being too controversial. However, I personally don't hold conventional bonds*. The upside potential is very limited. (At maturity they get redeemed at par.) The downside, however, can be significant if there are increases in interest rates and you need to sell. (Individual investors can always hold to maturity. Fund managers can be forced to sell at inopportune times if there are fund redemptions.) Again, the conventional wisdom is that they provide diversification away from equity risk. That may well have been true in the past, but it hasn't been true for a few years now. It may become true again in the future. No one knows. Nice summary AyG! When reading the conventional wisdom on bonds I ask myself what if interest rates were to rise for the next two decades? But then I tell myself what do I know.
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Post by francois on Nov 29, 2015 14:03:50 GMT 7
Thanks for all the wonderful recommendations and expert advice! Very grateful. Makes sense to take a step back and look at asset allocation.
Forums are quite new to me, and im quite astonished at how much valuable feedback is offered here.
I will do some more thinking and choose something I'm entirely comfortable with.
As to Fletch's final proposal:
25 % UOB Good Corporate Governance Fund 25 % TMB Global Quality Growth 10% TMB Property income fund 10% TMB Corporate Bond Fund 10% TMB Global Bond Fund 10% Aberdeen emerging bond fund 10% European equities (?)
UOB Good Corporate Governance is also available at TMB
So for someone living outside of BKK like myself almost all of these funds would also be available at TMB. So i might still consider saving myself all the trips to StanChart BKK and go with TMB instead.
The rm at Stan Chart recommended K Europe, which is not available at TMB. The Aberdeen emerging bond fund wouldn't be available at TMB either I think.
TMB does offer TMB european growth fund, investing in Franklin European Growth Fund?
Happy Sunday to all, will definitely keep in touch about the progress!
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AyG
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Post by AyG on Nov 30, 2015 6:05:28 GMT 7
25 % UOB Good Corporate Governance Fund 25 % TMB Global Quality Growth 10% TMB Property income fund 10% TMB Corporate Bond Fund 10% TMB Global Bond Fund 10% Aberdeen emerging bond fund 10% European equities (?) UOB Good Corporate Governance is also available at TMB So for someone living outside of BKK like myself almost all of these funds would also be available at TMB. So i might still consider saving myself all the trips to StanChart BKK and go with TMB instead. The rm at Stan Chart recommended K Europe, which is not available at TMB. The Aberdeen emerging bond fund wouldn't be available at TMB either I think. TMB does offer TMB european growth fund, investing in Franklin European Growth Fund? You need to ask yourself, what is the purpose of each holding in my portfolio? I would question the TMB Corporate Bond fund. It's 34.6% in cash (specifically bank deposits). That's not going to even beat inflation. And why pay someone 0.7571% just to hold cash? If that weren't dull enough (and sometimes dull can be good), it's 47.6% in government bonds. Rather mysteriously, it also appears to be leveraged. I'm not sure how, but that sounds to me unnecessary risk. Finally, the fund has significantly underperformed its benchmark in each of the last 5 years. TMB Global Bond fund isn't listed on TMBAM's website. However, I found it on Morningstar Thailand at tools.morningstarthailand.com/th/snapshot/snapshot.aspx?id=F00000LZ1T That tells me it invests in Templeton Global Bond fund. I'm assuming that's TPINX, as described at www.morningstar.com/funds/XNAS/TPINX/quote.html. Interestingly it's biased towards Emerging Market bonds, so you might not have to worry about not having access to the Aberdeen emerging bond fund. Performance is top 1% over 10 years in its category. Looks like a reasonable buy. Why 10% in European equities? Do you have reason to suspect they'll outperform, say, US equities, or Japan, or Asia Pacific over the next, say, 10 years? If you don't have a reasonable conviction, why not just put more into the TMB Global Quality Growth? If you're committed to overweighting Europe, then (as you say) TMB has its European Growth fund which invests in Franklin European Growth. However, have a read of the Morningstar analyst report at www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F0GBR04LW5&tab=11. You'll need to have a Morningstar UK account (its free) and be logged on to read this, but in summary, past performance was good, but there's been a change of fund management. It also has a relatively concentrated portfolio, making performance dependent on the management's stock picking ability. Having addressed the purpose of each holding, you then need to go back to the asset allocation. Supposing you put the 10% European equities into TMB Global Quality Growth, that would give you 25% in Thai equities, 35% in Global equities. Does that sound right to you? (To me it sounds like too heavy a weighting towards Thai equities.) Is 30% in bonds about right? Would you be better off with a lower allocation, perhaps 20%? (If you want 10% exposure to Emerging Markets bonds, then you could up the TMB Global Bond fund holding to 20%.) Anyway, that's my 2 baht's worth for now.
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Post by Fletchsmile on Nov 30, 2015 9:46:42 GMT 7
A list of TMBAM's funds can in English version is on their website here: www.tmbam.com/v6/en/mutual-fund-nav.php?accept=1Attached is also a list to cover the funds available from UOB, Aberdeen, ManuLife, CPAM in addition to TMBAM's own range, which aren't available in a nice website list In total there are about 120 funds. Sorry only have Thai version, but there's quite a bit of English naming and the fund codes. Attachment DeletedTMB Global Bond fund is listed on their webiste list under Foreign Investment Funds (FIF). Yes it's a feeder fund into Templeton's Global Bond Fund. This is something mentioned before that more and more feeder funds are becoming available in Thailand so people can access overseas fund managers. So while as you mentioned before overseas has more legendary managers, like Mark Mobius, he may not be here in person nor arguably people of his calibre, but some of his fund management house funds are starting to appear This one isn't personally managed by him though. Krungsri and KBank BTW seem to be others bank adding more feeders The remit of Templeton Global Bond Fund and Aberdeen Emerging Opportunities Bond fund are quite different. They may happen to overlap more at the moment, but that's likely because Templeton believe there is more value in the Emerging Bond space for now. Two key differences in the way they are managed: Templeton will shift to other bonds categories, eg investment grade if they think that's where the value is. Additionally they also use the funds to gain currency exposure. Aberdeen remains EM bond focused throughout. So Templeton is more one you can just leave to an active fund manager to get on with, hence is a decent long term hold without much effort, if someone wants bonds. Aberdeen is more a view that EM bonds are appropriate. We hold small amounts in each fund for those reasons.
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Post by Fletchsmile on Nov 30, 2015 10:58:30 GMT 7
TMB's fund range, above covered about 120 across 5 main providers: Aberdeen, UOB, Manulife, CIMB, TMBAM, by comparison StanChart covers about 220 funds across about 10 main providers = about double. Attached is a list of their funds: Attachment Deleted
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Post by Fletchsmile on Nov 30, 2015 11:11:03 GMT 7
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Post by Fletchsmile on Nov 30, 2015 11:38:14 GMT 7
25 % UOB Good Corporate Governance Fund 25 % TMB Global Quality Growth 10% TMB Property income fund 10% TMB Corporate Bond Fund 10% TMB Global Bond Fund 10% Aberdeen emerging bond fund 10% European equities (?) UOB Good Corporate Governance is also available at TMB So for someone living outside of BKK like myself almost all of these funds would also be available at TMB. So i might still consider saving myself all the trips to StanChart BKK and go with TMB instead. The rm at Stan Chart recommended K Europe, which is not available at TMB. The Aberdeen emerging bond fund wouldn't be available at TMB either I think. TMB does offer TMB european growth fund, investing in Franklin European Growth Fund? You need to ask yourself, what is the purpose of each holding in my portfolio? I would question the TMB Corporate Bond fund. It's 34.6% in cash (specifically bank deposits). That's not going to even beat inflation. And why pay someone 0.7571% just to hold cash? If that weren't dull enough (and sometimes dull can be good), it's 47.6% in government bonds. Rather mysteriously, it also appears to be leveraged. I'm not sure how, but that sounds to me unnecessary risk. Finally, the fund has significantly underperformed its benchmark in each of the last 5 years. TMB Global Bond fund isn't listed on TMBAM's website. However, I found it on Morningstar Thailand at tools.morningstarthailand.com/th/snapshot/snapshot.aspx?id=F00000LZ1T That tells me it invests in Templeton Global Bond fund. I'm assuming that's TPINX, as described at www.morningstar.com/funds/XNAS/TPINX/quote.html. Interestingly it's biased towards Emerging Market bonds, so you might not have to worry about not having access to the Aberdeen emerging bond fund. Performance is top 1% over 10 years in its category. Looks like a reasonable buy. Why 10% in European equities? Do you have reason to suspect they'll outperform, say, US equities, or Japan, or Asia Pacific over the next, say, 10 years? If you don't have a reasonable conviction, why not just put more into the TMB Global Quality Growth? If you're committed to overweighting Europe, then (as you say) TMB has its European Growth fund which invests in Franklin European Growth. However, have a read of the Morningstar analyst report at www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F0GBR04LW5&tab=11. You'll need to have a Morningstar UK account (its free) and be logged on to read this, but in summary, past performance was good, but there's been a change of fund management. It also has a relatively concentrated portfolio, making performance dependent on the management's stock picking ability. Having addressed the purpose of each holding, you then need to go back to the asset allocation. Supposing you put the 10% European equities into TMB Global Quality Growth, that would give you 25% in Thai equities, 35% in Global equities. Does that sound right to you? (To me it sounds like too heavy a weighting towards Thai equities.) Is 30% in bonds about right? Would you be better off with a lower allocation, perhaps 20%? (If you want 10% exposure to Emerging Markets bonds, then you could up the TMB Global Bond fund holding to 20%.) Anyway, that's my 2 baht's worth for now. It is important to think thru why things are held. Here's some additional thoughts from my perspectives, which are no doubt different A key reason I wouldn't put more into TMB Global Quality Growth is that it is around two thirds already invested in US equities (68%), then only 10% in Europe and 8% in UK. No significant Asia or Japan either. funds.ft.com/uk/Tearsheet/Summary?s=LU1076253134:EURSo to me that isn't a very well diversified global fund. I'd actually consider decreasing it a bit if anything. Most "global" funds: tend to have heavy weightings to the US. Adding a European fund wouldn't "overweight Europe" for me, but give better balance In terms of where valuations are at I'd say Europe looks better value than the US, which looks overvalued. US has already seen nice rises as first to appear to emerge from crisis. Uk next to emerge and then hopefully Europe. So I'd consider adding a European fund to: 1) Increase the diversification for a better balance 2) Reflect that Europe looks better value than the US now, with US looking overvalued There's also little in there when it comes to Asia and Japan I believe why the 25% Thai equity weighting came up, was when you suggested 25% Global, 25% Thai, 25% Property, 25% Fixed Income. Hence francois carried that thru. For me I wouldn't be worried by 25% Thai equities if living in Thailand and wanting THB exposure. Not to everyone's taste though. For me I'm also not overly a fan of bonds, but as I get older have added more. Of the 3 funds mentioned we hold some of each of them. The TMB Corporate Bond fund is my least favourite of the 3 which is why I suggested the other 2 to at least compliment it, rather than 25% which was original suggested, which I think would be too much for that fund. In the Thai space, there isn't much in the way of bonds I like, which is why I prefer to put a bit more in global bonds at the expense of Thai bonds, but then ad more to Thai equities and a bit less to international equities. It is important to think thru why things are held
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Post by Fletchsmile on Nov 30, 2015 11:59:59 GMT 7
Another factor is also how practical it is to invest amounts. Often there is a 10k minimum.
So where we say 10% this is theoretical and on 40k that may not be practical. 12.5% is a bit more practical, as you can just invest 10k every two months, whereas 25% is 10k every month. To be honest the difference between 10% and 12.5% won't matter much and can be tweaked
Adjusting for these. I'd be comfortable with:
25% UOB Good Corporate Governance - Thai Equities (or maybe 12.5% n UOB Good Corp Gov Fund and 12.5% in Aberdeen Emerging Markets) 12.5% TMB Global Quality Growth Portfolio (noting it is largely US) 12.5% Europe - need to identify right fund 12.5% Asia and or Japan - need to identify right fund Total 62.5% equity
12.5% TMB Property Income Fund Total 12.5% property
12.5% TMB Global Bond Fund 12.5% Aberdeen EM Opportunities Bond Fund Total 25% bonds/ fixed income
Some comments
- There are no Thai bonds, but for now they don't look good value anyway. I didn't include TMB Corporate Bond fund, preferring the other two.
- THB equity exposure 25% is OK for me for equities. Half of the TMB Property Fund is in THB property/REITs, so that makes 31.25% total is THB. That helps with currency risk. If someone felt 25% is too high they could just decrease to a lower level. 12.5% and 12.5% in an Emerging Market Fund focusing on Asia could be another option.
- The only one I don't hold any of is TMB Global Quality Growth Portfolio. For a core Global Fund I prefer Krungsri/JPM Global Income - which mixes equities, REITS and bonds, and better mixes geographies. It has a minimum entry of 500k though (after that minimum of 2k additions) so can't be used here.
- I'm not a bond fan, but appreciate the importance to some. For someone starting out, it will also help them learn and see how they behave over time.
- I'd consider this portfolio moderately aggressive. Not unreasonable if looking 10 years out and someone is age 40-ish give or take, and can accept fluctuations in capital and probably not need the access to the money
- Would be practical to implement by buying 10k a month for a 25% weighting and alternating every 2 months between the 12.5% weightings. This would be 4 purchases of 10k each month, and just alternating some
- These %'s are not set in stone by any means. As time goes by %'s could be changed, and also some funds removed from the list and others added.
Also I hope the thread keeps highlighting it depends on individuals comfort levels, but by suggesting different ideas, someone could home in on what suits them. Things they agree with and like the sound of, and removing things they disagree with or are uncomfortable with.
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