Thoughts on my investment Strategy

Discussion in 'Share Investing Strategies, Theories & Education' started by Big A, 23rd Jan, 2019.

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  1. Big A

    Big A Well-Known Member

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    I might map it out myself. Look at each individual fund and what category it would fall under to give me the allocation split that the funds collectively fall into.
     
  2. Big A

    Big A Well-Known Member

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    Ok, So I tried to break down the percentage of each fund in the portfolio and put a category title at the end of each line. Not sure if those categories make sense but that's as much as I understand about these funds to categorize them. At the end of all that I have grouped the funds based on those categorise and came up with this break down. Hope it makes sense.

    Aus ex 20 7.89%
    asx 300 21.55%
    Aus industrials 5.38%
    asx 300 ( Ethical ) 4.02%
    asx 300 ( Long / Short ) 5.45%
    International 39.12%
    International Infrastructure 16.60%

    Below are the actual funds and percentage of holding in each

    Bennelong WS Plus ex-20 Australian Equities Fund 7.89% Aus ex 20
    Hyperion Australian Growth Companies Fund 4.16% asx 300
    Investors Mutual All Industrials Share fund 3.76% Aus industrials
    Pengana Australian Equities Core Fund 8.14% asx 300
    Perpetual Wholesale Ethical SRI Fund 4.02% asx 300 ( Ethical )
    Perpetual Wholesale Industrial Share Fund 1.61% Aus industrials
    Perpetual Wholesale SHARE- PLUS Fund Long-Short 3.66% asx 300 ( Long / Short )
    Bennelong Kardinia Absolute Return Fund 1.79% asx 300 ( Long / Short )
    Vanguard Australian Equities Index Fund 9.25% asx



    Grant Samuel Epoch Global Equity Yield (Unhedged) Fund 3.30% International
    IFP Global Franchise Fund 15.53% International
    Lazard Global Listed Infrastructure Fund 8.50% International Infrastructure
    Magellan Infrastructure Fund 8.10% International Infrastructure
    Magellan WS Plus Global Fund 13.73% International
    Walter Scott WS Plus Global Equity Fund 6.56% International
     
  3. Froxy

    Froxy Well-Known Member

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    @Big Al thanks for sharing. Do you know what your portfolio MER is? Also, some of the smaller holdings are you looking to build up? As they would have to significantly outperform to make a decent difference to your returns. They could be an easy way to simplify the portfolio.
     
  4. Big A

    Big A Well-Known Member

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    @Froxy I have not actually worked out the portfolio MER. But being predominantly managed funds most have a fee of 1-1.2%.

    There is no specific plan to build up the smaller holding funds. The larger holdings are in funds that the adviser had strong conviction in. Smaller holdings were funds that he thought would be a good source of diversifying across fund managers with slightly different approaches while still being reputable managers.

    I’m starting to think the the adviser doesn’t have a specific plan other than just build the holdings in equities. Personally I like to have a fairly specific plan for everything in life. That’s why I’m in here learning and getting input from others in order to implement a plan and strategy moving forward that I’m comfortable and confident in.

    While I don’t necessarily want to wipe the board and start from scratch I want to make sure all new funds are allocated as per a plan while slowely shifting any underperforming allocations into the new stratagy. At the moment I’m thinking the core of the strategy should be index funds split between aus, international, US and US small cap.
     
  5. Redwing

    Redwing Well-Known Member

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    @Big Al per @Froxy I was going to say since you've done all that work what the Management Expense Ratio / Management Costs across the whole portfolio

    Index funds and ETFs generally have lower expenses compared to actively managed funds... then there's sometimes hidden fees

    Portfolio MER Calculator from Squawkfox
     
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  6. Nodrog

    Nodrog Well-Known Member

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    I’m starting to think the same myself in that it’s more about product selection rather than a clear roadmap.

    Also unless you misunderstood the FP’s advice, borrowing from the Home offset account to invest with was also potentially a concern?
     
    Last edited: 28th Jan, 2019
  7. Big A

    Big A Well-Known Member

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    Yes I think product selection is what he does. And even then I’m not sure al the products he selected are that great.

    He did not advise on the borrowing from offset. Again that’s not something he understands to advise on. He recommended me to speak to my accountant with regards to such things.

    I think the drawing from offset is something I did not understand. Not an issue to date as I have not needed to really use it but want to make sure I have it right for any future use.
     
  8. Big A

    Big A Well-Known Member

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    Thanks @Redwing i will use that calculator and work it out. Will post findings once done.
     
  9. Big A

    Big A Well-Known Member

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    Actually there have been times were the adviser did have a plan when it came to injecting funds into the portfolio. There was a point early last year when markets were getting pricey and I wanted to add more funds to the portfolio. He recommended we top up in the infrastructure funds. The theory was that regardless of the short term share price movement infrastructure normally pays strong distributions on a regular basis.

    So we added to our holdings in the Lazard and Magellan infrastructure funds.
     
  10. Redwing

    Redwing Well-Known Member

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    These funds also charge their own buy-sell spreads (i.e If you invest $10,000 in an investment option and if the buy spread is 0.02%, you will incur a cost of $2.00, some are much higher) and the funds may have different taxation implications , I haven't really looked at either as I'm a pretty simple person
     
  11. Big A

    Big A Well-Known Member

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    Yes pretty much all the managed funds charge a buy / sell spread. Is that not much the same as brokerage when buying into ETF’s LIC’s?
     
  12. Redwing

    Redwing Well-Known Member

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    Yes, fees differ though
     
  13. Nodrog

    Nodrog Well-Known Member

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    Yep, trying to convince the client that the FP is adding value by doing something although in this case it appears to be due to your prompting:). Perhaps the FP should have been advising / educating you instead on the need to “stay the course” rather than simply adding more funds to react to your concerns? Here it appears to be an attempt at “dynamic” asset allocation? Rather than a set “static” allocation between asset classes with regular rebalancing the FP is dynamically using their discretion in adding / varying allocation to asset classes in the hope of ourperformance.

    The following highlights the difficulty in doing this:
    Your survival guide for investing in 2019
     
    Last edited: 28th Jan, 2019
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  14. Big A

    Big A Well-Known Member

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    Yes I think he is trying to show me that there is a strategy to which funds he chooses at any given time for me to top up in.

    But as I have now learnt the chances of picking the class of equities or the particular manager that will deliver outperformance in the future is anyone’s guess.

    So with that I’m mind and based on moving towards allocating future capital to index funds what is a good asset allocation split. If we said the index funds I wanted to hold are Aus, international , US and US small cap. We acknowledged that Aus small cap was better in an active fund. Now infrastructure I hold on the active side but could also look at eventually adding infrastructure on the index side.

    What’s an ideal split. 50% Aus, 20% international, 20% US and 10% US small cap?
    Is that a well diversified index based portfolio?

    Is there an Aus small cap LIC that is worth looking at to cover that segment off?
     
  15. Redwing

    Redwing Well-Known Member

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    I meant @wombat777 re: Sharesight- that will teach me not to proofread
     
  16. Nodrog

    Nodrog Well-Known Member

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    Take your time, absorb the knowledge, let it sink in. No need for urgency, it’ll become clear and you’ll have a plan that’s just perfect for “you”. No FP input needed!

    Asset allocation is @The Falcon ‘s area. If we can get him off the best of red wine available then there’s hope of a reply. Perhaps @Zenith Chaos has dropped in to visit @The Falcon? Don’t know how he’ll achienve FIRE with his taste in wine:).

    Meanwhile just finished another Barbie on the deck. And no work tomorrow, or forever for that matter. Life is bliss:cool:.

    PS: Might pick your brains further in relation to Unlisted property at some stage. Or perhaps not when the red wine wears off:confused::).
     
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  17. Nodrog

    Nodrog Well-Known Member

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    Yes, but trading at a premium at this time such as MIR / WAX (but WAX fees very high).

    If the advisor felt this was appropriate I would have thought Investor Mutual Small Cap funds via the platform hadn’t been recommended. Then again Bennelong Ex-20 Fund is likely providing diversification to mid / small caps in ASX which is a highly concentrated index where the top 10 ( banks / resources) dominate.

    Shame there are not more others offering opinions to this thread. Then again perhaps as usual I’m talking too much and stifling conversation. A byproduct of home brew consumption no doubt:confused:. I do need to shut up, any wonder I drive my wife mad at times:(.

    Time to lock the keyboard and let others have a say!
     
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  18. Gockie

    Gockie Life is good ☺️ Premium Member

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    I have no idea except I have around 20k of Super fund money just sitting there and I want to allocate it to something and it might be an ETF. But I have figure out what. I have to say VAS price growth etc seems slow to me though it does pay dividends.... I.e. No shooting out of lights. Damn. I like excitement... Help.
     
  19. Nodrog

    Nodrog Well-Known Member

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    Being a contrarian I go for what seems like the worst choice at the time. Hence the opposite of excitement! Perhaps save the excitement for falling off the unicycle. Bruise pictures appreciated:D.
     
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  20. Hodor

    Hodor Well-Known Member

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    Thought continuing here would save another derailment of an otherwise great thread.

    I didn't watch it either Nodrog, I can imagine the content etc well enough.

    Big Al the nasty indexers have all the answers without needing the spin or convenient facts. IMO everyone should start indexing until they have had time to learn, experience highs & lows and get educated. If you then want to see if you're smarter than everyone else go for it, at least you have a core portfolio.

    One thing they don't mention is that the market had found a nice balance with growth,valuation, returns and 2+20 skimmed off the top. With all these low fee indexes becoming popular and returns staying with investors there is a glut of capital in the market. It is kind of like taking an apex predator out of an ecosystem, the system breaks down.

    As a side note I used to know a Big Al who lifted and lived in Vic...

    ** some of the above content may have lost meaning through text rather than discussed over beer and wine.
     
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