Portfolio imbalance.

[Fairleas]

Any thoughts welcome on how I balance my portfolio. I plan to retire in 3 years.

Funds
Fidelity Global Soec Sits 4%
Henderson Asian Dividend Income 1%
Twenty Four Dynamic Bond 1%
Vanguard U.K. equity income 5%
Vanguard lifestyle 100 Equity 1%
Vanguard 80 UK 19%
Vanguard US equity index 17%
CF Woodford Equity inc 3%
CF Woodford Equity accum 5%
Jupiter India 3%

Shares
BP 1%
GSK 1%
M and S 1%
Shell 4%
SSE 1%
Carnival 4%

ITs
City London 5%
CQS New City 1%
Dunedin Income growth 1%
European assets 1%
Finsbury 5%
Henderson high income 2%
Merchants 3%
Murray int 3%
Value and INC 2%
Aberdeen Asian INC 1%
Edinburgh inv trust 2%
Scottish American 2%
Temple Bar 1%

Thank you.

[tjh290633]

You have already posted another thread where the subject of the cash you hold has been brought up.

You have to decide what you are going to invest in. Currently you have a 3-way mixture, which to my mind does not make sense. If you want to back things both ways, then concentrate on ITs and individual shares, rather than funds, unless there is a specific aspect which only a fund will give you.

Let's say that you went 50/50 shares and ITs. Ideally you want about 20 or so shares as a minimum, but fewer ITs, because of the inherent diversification within them. 8 to 10 ITs might make sense. Having decided that, then start by getting your holdings equally weighted, by reinvesting a lot of that cash and the cash which could be released from your funds. Your Vanguard funds are obviously way overweight. And why have both income and accumulation versions of the same fund?

Once you have done that, you can sit back and watch progress. If one stock runs away with itself, then think of bringing it back into line and use the proceeds to bolster something which has dropped.

Just my suggestions, and no doubt there will be contrary views.

TJH

[Tortoise1000]

Could you explain why you hold those particular half-dozen shares? I could see why you might have a 'HYP'-type collection, to save costs, but you dont have enough holdings for that. Or a set of 'conviction' shares if you were very interested in trading of some kind. You dont sound as though you are, though. As they stand, its looks as though you have plenty of all of them in your ITs, so you might as well sell them and add one of your UK equity income trusts or funds. Why did you buy them?

T

[tjh290633]

Could you explain why you hold those particular half-dozen shares?

You mean then list of ITs? They are not mine, but a portfolio my daughter set up when she moved her ISA to a place where she could manage her own portfolio. Previously it had been in a basket of OEICs/UTs, which were not doing spectacularly well. Also the costs were extortionate.

They are derived from the B7/B8 baskets set up by Luniversal on TMF, some years ago.

I also hold a few ITs in bare trusts for my grandchildren, which are:

Alliance Trust
Foreign & Colonial
F&C Capital and Income
Witan.

They have been held for different periods of time depending on the age of the child concerned. WTAN was the first and has been held for over 15 years, with a total return IRR of 11.4%. FRCL was the next and has been held for nearly 14 years with an IRR of 10.8%. Alliance ATST was the third, held now for 13 years with an IRR of 11.3% and FCI is the most recent, held now for 7 years with an IRR of 9.0%.

They have all done remarkably better than the FTSE100 in terms of share price appreciation. They will revert to the grandchild in question when he or she gets to 18, and hopefully will help fund him or her through university, or pay for a gap year, or form the basis for longer term savings.

TJH

[Tortoise1000]

I think we are at cross purposes, TJH I was asking the OP why he held

BP 1%
GSK 1%
M and S 1%
Shell 4%
SSE 1%
Carnival 4%

I wasn't asking you about your ITs. I cant see them on this thread!

Yours, a bit confused

Tortoise1000

[Fairleas]

I think we are at cross purposes, TJH I was asking the OP why he held

BP 1%
GSK 1%
M and S 1%
Shell 4%
SSE 1%
Carnival 4%

I wasn't asking you about your ITs. I cant see them on this thread!

Yours, a bit confused

Tortoise1000

Good question. I think it was in the days when I started building a portfolio of dividend paying shares. Then realising that the 'safer' way forward for myself was the world of ITs. Funds followed afterwards.

I held onto them to avoid further costs of selling and reinvesting.

[Tortoise1000]

Since your original reason for buying them no longer applies, I'd be inclined to clear out the clutter. My experience is that doing so helps me think more clearly about what is left.

Then the next thing I would do is ask is how much dividend income I would like, and how much growth. I think that is quite fundamental when one retires. Some people like to have the growth and sell chunks of capital from time to time. Others like to keep things simple and live on their dividends. How do you think you will be taking income? Assuming that is what you will be using the investments for.

T

[yorkshirelad]

Perhaps I’m too influenced by the Bogleheads’ KISS philosophy, but simplifying things to either ITs/shares OR funds seems logical. Depending on exactly what your needs are. But also as a way to reduce fees - the portfolio you currently have must come at a heavy basic cost.
If you wanted a “hands-off, get on with my retirement" approach then perhaps moving things into a Vanguard (or similar) Lifestrategy fund (plus cash?) for the majority of your money might be good. You might then put a little money aside for a set of shares/HYP If you want a little “hands-on” activity still. But on the understanding that the vast majority of your holdings are in the Lifestrategy vehicle. Guess it depends on your needs.