We are gradually increasing our investments in funds with the objective of reducing our equity holdings in companies to about 6 – probably RDSB, UVLR, RB., PG., SSE and GSK. We also hold preference shares ( e.g. AV.A ) that account for 44% of our total investments in shares. We also have a small holding in Lindsell Train Global Equity.
At present wehold the following 5 ETF and IT funds :
ETFs – EUN 30% , USDV 30%. ITs - HFEL 15%, LWDB 15% FGT 10%,
In the absence of finding another suitable fund we will invest the proceeds in the above funds from the reductions in the company equities to finish up with :
EUN 25%, USDV 25%, HFEL 25%, LWDB + FGT 25%.
We are doing this to make life easier for my wife should I ( as is likely ) pre-decease her.
I am not as confident as some as to the benefits of Brexit and would prefer to take a position that anticipates a weak £.
I would also prefer funds that invest in megacaps and are fairly concentrated.
So, what I would like help with is finding one more fund ( ETF or IT ) to add diversity to the 5 above. I have searched any number of websites without success, perhaps because my criteria are too restrictive.
In the absence of anything that adds to the global diversity, I think that we are probably underweight North America.
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Diversity suggestion needed
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- Lemon Pip
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Re: Diversity suggestion needed
I agree you're underweight in North America, but given where the price of the S&P 500 in particular sits relative to historical norms, that might not be such a bad idea. I'd add one of the following (assuming you're looking for yield): MYI (global, weighted toward emerging markets), CTY (the ultimate widows-and-orphans equity and income IT) or perhaps some private equity (FPEO and/or PEY).
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- 2 Lemon pips
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Re: Diversity suggestion needed
Longtermyieldman
I agree you're underweight in North America, but given where the price of the S&P 500 in particular sits relative to historical norms, that might not be such a bad idea. I'd add one of the following (assuming you're looking for yield): MYI (global, weighted toward emerging markets), CTY (the ultimate widows-and-orphans equity and income IT) or perhaps some private equity (FPEO and/or PEY).
Thank you for the above. You are correct to say that yield is important.
MYI comes close to what I am looking for, it's portfolio would meet the diversification criterion, but it is not strong in megacaps. Because of this they did not meet my original criteria, however, I will now look in more detail at their holdings,
As to the others ;
CTY would not add a lot to diversification as it, like me, is overweight in FTSE 100 shares. EUN hold a fair few in addition to the company shares I am planning to retain.
Clearly the 2 PE trusts you suggested give diversification, however, having looked at their portfolios, I am really none the wiser as I have no knowledge about the individual holdings. I can sleep with not knowing a lot about some of our investments but nothing at all would be difficult.
If nothing better come forward I may increase my % holding in USDV to increase the North America weighting. I am not too concerned about timing the market. In any event it will take me at least 2 years to sell off the unwanted equities and re-invest in the funds.
I agree you're underweight in North America, but given where the price of the S&P 500 in particular sits relative to historical norms, that might not be such a bad idea. I'd add one of the following (assuming you're looking for yield): MYI (global, weighted toward emerging markets), CTY (the ultimate widows-and-orphans equity and income IT) or perhaps some private equity (FPEO and/or PEY).
Thank you for the above. You are correct to say that yield is important.
MYI comes close to what I am looking for, it's portfolio would meet the diversification criterion, but it is not strong in megacaps. Because of this they did not meet my original criteria, however, I will now look in more detail at their holdings,
As to the others ;
CTY would not add a lot to diversification as it, like me, is overweight in FTSE 100 shares. EUN hold a fair few in addition to the company shares I am planning to retain.
Clearly the 2 PE trusts you suggested give diversification, however, having looked at their portfolios, I am really none the wiser as I have no knowledge about the individual holdings. I can sleep with not knowing a lot about some of our investments but nothing at all would be difficult.
If nothing better come forward I may increase my % holding in USDV to increase the North America weighting. I am not too concerned about timing the market. In any event it will take me at least 2 years to sell off the unwanted equities and re-invest in the funds.
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- Lemon Half
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Re: Diversity suggestion needed
I would have thought that one of the big global ITs, like FRCL or WTAN, would have been ideal to get exposure that way.
TJH
TJH
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Re: Diversity suggestion needed
tjh
Thank you for your suggestions.
As you might imagine I have looked at both FRCL and Witan.
Of the 2, Witan is much closer to meeting my criteria than FRCL.
However, I was not keen on the very large number of holdings, most ( by far ) are not megacaps..
This suggests to me that the managers do not have sufficient conviction in their stock picks.
Also about 40% invested in the UK.
I would probably choose MYI ( suggested by Longtermyieldman ) rather than Witan.
An ETF that I have my watch list is QDIV run by ishares, do you ( or anyone else ) have any opinions on it?
Cheers
Thank you for your suggestions.
As you might imagine I have looked at both FRCL and Witan.
Of the 2, Witan is much closer to meeting my criteria than FRCL.
However, I was not keen on the very large number of holdings, most ( by far ) are not megacaps..
This suggests to me that the managers do not have sufficient conviction in their stock picks.
Also about 40% invested in the UK.
I would probably choose MYI ( suggested by Longtermyieldman ) rather than Witan.
An ETF that I have my watch list is QDIV run by ishares, do you ( or anyone else ) have any opinions on it?
Cheers
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- Lemon Slice
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Re: Diversity suggestion needed
flint wrote:...
At present wehold the following 5 ETF and IT funds :
ETFs – EUN 30% , USDV 30%. ITs - HFEL 15%, LWDB 15% FGT 10%,
In the absence of finding another suitable fund we will invest the proceeds in the above funds from the reductions in the company equities to finish up with :
EUN 25%, USDV 25%, HFEL 25%, LWDB + FGT 25%.
...
So, what I would like help with is finding one more fund ( ETF or IT ) to add diversity to the 5 above. I have searched any number of websites without success, perhaps because my criteria are too restrictive.
In the absence of anything that adds to the global diversity, I think that we are probably underweight North America.
I am looking at building a portfolio of ITs & ETFs.
If you are missing conviction in North America I picked over :
PowerShares EQQQ Nasdaq 100 UCITS ETF (EQQQ),
As of Jan 31, 2017
10% invested in Apple +8.5% Microsoft and 6.5% Amazon. 0.3% ongoing charge
Big USA megacaps don't do much in the way of yield though
http://www.iii.co.uk/research/LSE:EQQQ?channel=ppc&gclid=CJOCy7m45tICFdXGGwodOw4FaA&gclsrc=aw.ds
midgesgalore
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Re: Diversity suggestion needed
midgesgalore - " Big USA megacaps don't do much in the way of yield though ".
I think that is the cause of my difficulty and why we invested in USDV.
At present I am inclined towards Witan.
Many thanks
I think that is the cause of my difficulty and why we invested in USDV.
At present I am inclined towards Witan.
Many thanks
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- Lemon Slice
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Re: Diversity suggestion needed
flint wrote:midgesgalore - " Big USA megacaps don't do much in the way of yield though ".
I think that is the cause of my difficulty and why we invested in USDV.
At present I am inclined towards Witan.
Many thanks
Me too as the thinking goes on although this trust has slightly higher charges 1.08% and a 2% yield is not a great yield either.
I'm also going to buy Scottish Mortgage although it doesn't yield well.
I'll have some ITs / ETFs for growth and some for yield eventually. So looks like I will have more collectives than you
![Wink ;)](./images/smilies/icon_e_wink.gif)
midgesgalore
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