Tidying up my retirement portfolio...

[Amaryllis]

I probably need to consult with a financial advisor but would be grateful for any comments and suggestions regarding my current portfolio as I'd like to be somewhat more clued up than I am. And if anyone could suggest a good FA that would be great!

I'm in my 60s and have been retired for a few years. I am in the lucky position of not needing to draw down any funds from the portfolio I have accumulated over the years. I also have around £1000 a month spare from the pensions I am already getting, which I would like to invest somehow, somewhere...

The objective: not doing something stupid with my assets, with a view of leaving as much as possible to my children.

In addition to sizeable cash savings and real estate, I have a good 6-figure sum invested in various funds, roughly split between:
UK 28%
USA 35%
Europe 12%
Asia, Japan, China, India 8%
Global + emerging markets 15%
Healthcare + Biotechnology 2%

Currently my portfolio is spread across approximately 25 funds. Main holdings include UK and US index funds, Vanguard Life Strategy, Managed Europe funds (Baring, Janus Henderson, JP Morgan), Vanguard FTSE All World and Utmost Multi-Asset Cautious. (The latter is the remnant of an old Equitable Life pension fund - I really ought to transfer this elsewhere as it is not doing very well - but where? Suggestions welcome...)

Most of the funds are in a SIPP and ISAs with AJ Bell, as well as a SIPP with Vanguard, plus some ITs and shares with Halifax. (As well as the Utmost pension fund - see above.)

I admit that most of my investments just evolved, without too much planning, but this is where I am at. Any suggestions on what to do?

- Keep the portfolio as it is or reduce/consolidate the number of funds?
- Any sectors that are over- or under-weight?
- Should I put more into Vanguard Life Strategy?
- Keep the Utmost pension as is or transfer it...... where? (Vanguard Life Strategy?)
- What about an annuity... - worth considering, if so how much/what percentage?
- What to do with the £1000 a month that I could invest?
- And, finally, what is the best way of passing on my assets to my children... (a trust?)

Thank you for reading!

[tjh290633]

My choice would be to drastically reduce the number of investments. Personally I prefer investment trusts if you are going for collective investments and I avoid trackers. My objective is a high and increasing flow of dividend income. That on its own is likely to result in better capital performance than most trackers.

Others prefer to aim for a higher total return. Either way, trackers are unlikely to give the desired results.

Somewhere between 6 and 10 investments ought to be enough. Just which they are is a matter of personal choice. A couple of the big global ITs will probably cover most of your areas of interest.

TJH

[Amaryllis]

Thank you. I already have investments in Foreign & Colonial, Mercantile and JP Morgan Global Growth & Income. Thoughts?

[Amaryllis]

And also Finsbury Growth & Income...

[tjh290633]

Thank you. I already have investments in Foreign & Colonial, Mercantile and JP Morgan Global Growth & Income. Thoughts?

That's the direction I was thinking of.

TJH

[BullDog]

Thank you. I already have investments in Foreign & Colonial, Mercantile and JP Morgan Global Growth & Income. Thoughts?

More of those!

[kempiejon]

I have come to the conclusion that my own investing skills do not better a global market tracker and it takes much more effort. I enjoy the effort. I have lots of holdings now mostly in ISAs. I hold high yield UK shares, ITs, fixed interest, AIM, USA shares, iShares, unit trusts etc - lots of bits and pieces. I occasionally consider rationalising those holdings that I have collected over 20 odd years and I know it's haphazard.

10 years ago I gathered together all my various works' pensions into a SIPP, this is invested in Vanguard ETFs to cover USA, Europe ex-UK, emerging markets, Asia, japan, to roughly match the weighting in VWRL - the Vanguard global tracker (distributing). Very irregularly I check weightings and direct new money to rebalance. As I mentioned above, outwith the SIPP I invest directly into FTSE 350 shares hence Europe ex-UK in the SIPP.
All my new ISA money goes into VWRP vanguard global accumulating ETF.
If with your current portfolio you feel can beat the global market, perhaps check to see if you have, then keep doing what you're doing. If not, you could stop complicating your investment life.

[Amaryllis]

Simplifying my investment life is certainly high on my list of priorities!

[James]

Simplifying my investment life is certainly high on my list of priorities!

I've mentioned it here before, but the advice from Warren Buffett to his wife in the event of his death is to stick her inheritance into a global tracker.
Once one starts to go a bit doolally as age encroaches, or if one needs to pass it on to a spouse/family member without the same hobby interest in investing that we have here, the set-and-forget approach seems to make the most sense.

[kempiejon]

Simplifying my investment life is certainly high on my list of priorities!

I've mentioned it here before, but the advice from Warren Buffett to his wife in the event of his death is to stick her inheritance into a global tracker.
Once one starts to go a bit doolally as age encroaches, or if one needs to pass it on to a spouse/family member without the same hobby interest in investing that we have here, the set-and-forget approach seems to make the most sense.

I think Warren said a 90% S&P tracker and 10% short dated government bonds.

[Amaryllis]

Quick question:

What’s the maximum sum that you’d consider sensible to invest in a single fund or IT? £50k, £100k….. or what?

[kempiejon]

Quick question:

What’s the maximum sum that you’d consider sensible to invest in a single fund or IT? £50k, £100k….. or what?

If I only had £100k £50k might be too much in a single investment. If I had £100M different answer.

[Amaryllis]

Sorry - I should I’ve specified percentages…

[Dod101]

Thank you. I already have investments in Foreign & Colonial, Mercantile and JP Morgan Global Growth & Income. Thoughts?

To which I would add Alliance. Since they appointed Willis Towers Watson they have been doing well and have a decent exposure to the US. If you include Finsbury Growth and Income these five ITs provide most of the exposure anyone needs for a general, largely growth portfolio. Then just add your £1000 per month to each of them in turn or some such arrangement.

Dod

[Lootman]

Quick question: What’s the maximum sum that you’d consider sensible to invest in a single fund or IT? £50k, £100k….. or what?

If I only had £100k £50k might be too much in a single investment. If I had £100M different answer.

If you had £100 million, you would probably not be concerned about growth at all. You would be concerned about not taking risk and preserving it.

You could put it all in US Treasuries and live off the £4 million a year in interest.

[Amaryllis]

So are you guys thinking in terms of selling all my trackers, including the US funds, and the other odds and ends, and put everything into these global ITs?

Will they give me good exposure to Europe, where I currently only have 12%?

What about a bit of spice - China, India, healthcare, pharma, biotechnology…

[DrFfybes]

I think the consensus here is ITs, or trackers . Contrary to what TJH suggests, over the last decade there are a lot more ITs that have underperformed than outperformed a Global Tracker. FCIT and ATST have, JGGI and Finsbury have almost matched it, but MRC has not done at all well.

However definitely keep the number down to 10 or so, beyond that you either end up with loads of duplication, or if you try and spread across 40 or so funds with no duplication you end up heading towards a Global Tracker anyway

I'm in my 60s and have been retired for a few years. I am in the lucky position of not needing to draw down any funds from the portfolio I have accumulated over the years. I also have around £1000 a month spare from the pensions I am already getting, which I would like to invest somehow, somewhere...

The objective: not doing something stupid with my assets, with a view of leaving as much as possible to my children.

You appear to have £2m+ and it will take some serious IHT changes to get that passed on. You can start by opening SIPPs and naming your children as beneficiaries, that would shelter £2880 a year under current rules. You could also look at moving some assets towards IHT exempt investments or those that become exempt after you've held them for 2 years (there are various vehicles, and some companies like Octopus have specific funds for the 2 year exemption) but again, the rules can change.

Given the value of your assets, the simplest way to achive you objective is to start giving it away now. You have £1k/month spare, why do YOU need to invest it to grow when you'll probably end up taxed on any increase. Do you have grandchildren, can you open JISAs or JSIPPs for them? If the £1k/month really is surplus to requirements than there are no tax implications of gifting it regularly. We're in a not dissimilar situation to you, large asset base, good pensions topped up with circa 1% from our investments, and slightly younger than you but with no children we've already set up monthly payments to the great nieces and nephews.

Sorry - I should I’ve specified percentages…

Well, if you're narrowing it to 10, then I'd say at least 10% in each

Paul

[Amaryllis]

That sounds very sensible - thank you so much!

I clearly have a lot of homework to do…

One more question: would you suggest putting everything with AJ Bell, or should I spread it amongst two or three brokers?

[Howard]

I probably need to consult with a financial advisor but would be grateful for any comments and suggestions regarding my current portfolio as I'd like to be somewhat more clued up than I am. And if anyone could suggest a good FA that would be great!

I'm in my 60s and have been retired for a few years. I am in the lucky position of not needing to draw down any funds from the portfolio I have accumulated over the years. I also have around £1000 a month spare from the pensions I am already getting, which I would like to invest somehow, somewhere...

The objective: not doing something stupid with my assets, with a view of leaving as much as possible to my children.
.............And, finally, what is the best way of passing on my assets to my children... (a trust?)

You have asked some really good questions!

I’m a few years older than you and have considered the same issues. The following isn’t advice, just a few reflections on past experience.
Over forty years of investing, every time I talked to an IFA or read their advice, it seemed to me that they advised a high proportion of one’s portfolio should be in bonds especially as one got older. I mainly ignored this advice and went all-in on equities. However I do have a small holding in bond funds in my SIPP to give some income. In total return terms the bonds lagged the equity investments really badly. And they are currently down more than 30%. So no safer than a well diversified equity portfolio? If I’d followed IFAs' advice and had a major portion of the portfolio in bonds this would be a serious loss at the moment. (However a punt on a high yield bond fund now might be fun? In the last few weeks NCYF has been a good investment.)

Like you I accumulated a wide portfolio of investments but to me this has been an advantage. I’ve gradually moved from direct equity investments to tracker funds and Etfs as I got older. Haven’t regretted investing in most of these, a star example would be EQQQ which has tracked the Nasdaq and performed brilliantly over the years.

I also invested early into Fundsmith and, answering another of your questions am happy to hold a significant sum in Terry Smith’s care.

To me trusts are for people who don’t trust their children or partners! They are a major source of income for the professionals who manage them. If one really wants to give to one’s children or others it’s much more fun to do this while one is alive. Especially if one can afford to subsidise a nice house or an investment portfolio. After seven years the gifts are tax free.

In summary, your portfolio may not need too much attention. You may just need to work out how to spend it or give some of it away?

Hope this is helpful.

Good luck in your financial tidying.

Howard

[Wuffle]

You can leave it as it is - if you want.
Your executor would be the one tidying up - so maybe talk to / consider them.

W.