Gradually shifting towards collectives

[Steveam]

My collection of investments (portfolio is too kind) has developed over 30+ years and is about 50% direct share holdings - mainly FTSE 100 and overlapping HYP) and 50% collectives. I'm gradually sorting out the direct shares but realize the collectives pot is all over the place. My collection is scattered across ISA, SIPP and unprotected and I doubt I'll ever get it all protected. I've not worried about bonds as I have small inflation proofed pensions which are a backstop and I also carry significant cash to carry me through lean times.

Here are the collectives:

(Name) (EPIC) (% of Median Value)

Aberdeen Asian Income AAIF 93%
Blackrock Latin America BRLA 28%
Caledonia IT CLND 138%
City of London CTY 121%
CT UK Cap & Income CTUK 95%
F&C FCIT 180%
Henderson Far East HFEL 66%
JPM E, MA & A JEMA 7%
JPM Indian JII 120%
Merchants MRCH 136%
Global Smaller Co.s GSCT 110%
iS Core World SWDA 340%
Van FTSE Mid Cap 250 VMID 83%
Van World VWRL 74%
Van World HY VHYL 216%
Van Dev Asia/Pac VAPX 87%
Van Europe ex UK VERX 100%
Van FTSE Dev World VEVE 183%
Van Emerging Markets VFEM 83%
Van Japan VJPN 103%

The recent tidying of the shares leaves me with cash for another median level purchase. The whole thing has grown like Topsy with all sorts of biases and historic hangovers.

Time for a major tidy-up. I'd like the dividend income to sit about where it is (note SWDA and JII are accumulating). The holding sizes are substantial so dealing costs are not disproportionate. I'm sure I can reduce running costs substantially (I recently sold a large chunk of VWRL and bought VEVE in one account and will probably do the same in the other VWRL account).

Thoughts:
- sell all holdings less than, say, 75% of median
- sell all Vanguard (except VEVE) and use available funds to buy 90% VEVE and 10% VFEM
- pay attention to the CGT consequences

I feel embarrassed about the scatter above.

Any thoughts, suggestions welcome. Don't worry about causing offence - I know its a mess!

Best wishes,

Steve

[88V8]

My collection of investments (portfolio is too kind) has developed over 30+ years
Any thoughts, suggestions welcome.

What is its aim/purpose?
Growth... income now... income eventually?

Mine is a hodgepodge as well. But it's an income now hodgepodge. And a bit of a hobby. So I don't mind too much, as long as it works.

V8

[Steveam]

My collection of investments (portfolio is too kind) has developed over 30+ years
Any thoughts, suggestions welcome.

What is its aim/purpose?
Growth... income now... income eventually?

Mine is a hodgepodge as well. But it's an income now hodgepodge. And a bit of a hobby. So I don't mind too much, as long as it works.

V8

Thanks V8:

My investment income more than covers my living costs (although there’s always the risk of dramatic changes: health care and/or other care costs being obvious uncertainties - even these would be manageable but mean eating into capital). No dependants to worry about but a few “charitable” commitments. I’m old enough to remember 20% inflation and have seen the £ exchange rate decline so I’d like to have an element which is defensive (I have preferred Caledonia).

So, objective: Balanced Growth, Income and Capital preservation. (All within, say, ten years as I’m unlikely to make old bones).

Best wishes,

Steve

[richfool]

Any thoughts, suggestions welcome. Don't worry about causing offence - I know its a mess!

Hi Steve,

I was looking at your US exposure. I note that you don't have any trust or ETF that specifically/solely targets the US. That said I appreciate that the likes of FCIT and your All-World ETF's like VHYL and VEVE, will give a significant amount of exposure. I pondered whether you might wish to add VUSA or JAM to enhance the US exposure, though I am not sure what your priorities are re income versus growth.

[EthicsGradient]

Using an X-ray tool to see the regional balance would seem a good idea, just to check if it's what you'd like. And yes, "pay attention to the CGT consequences", though we can't see how much that is at all. You may want to plan how to use the CGT allowance, if you're liable to some but not too much (if you are liable to a lot, you may want to do what I did - compare the yearly saving in running costs of an active investment if traded in fro a tracker versus the CGT you'd have to pay to sell and buy it. I then sold those with the highest cost/CGT ratio.

[Steveam]

Any thoughts, suggestions welcome. Don't worry about causing offence - I know its a mess!

Hi Steve,

I was looking at your US exposure. I note that you don't have any trust or ETF that specifically/solely targets the US. That said I appreciate that the likes of FCIT and your All-World ETF's like VHYL and VEVE, will give a significant amount of exposure. I pondered whether you might wish to add VUSA or JAM to enhance the US exposure, though I am not sure what your priorities are re income versus growth.

Thank you Richfool,

I need to think about this. I do have about 8 x median in VWRL + VEVE + SWDA + FCIT all of which are going to include large swathes of US. SWDA is my largest single holding and (being accumulation) grows slightly each year.

In the days when I used to think I was clever (long ago) I was determined not to fall into the “Japan” trap. (Buying a world tracker when Japan was at its peak would have been a bit of a mistake - I was nervous about a similar situation).

Best wishes, Steve

[Steveam]

Using an X-ray tool to see the regional balance would seem a good idea, just to check if it's what you'd like. And yes, "pay attention to the CGT consequences", though we can't see how much that is at all. You may want to plan how to use the CGT allowance, if you're liable to some but not too much (if you are liable to a lot, you may want to do what I did - compare the yearly saving in running costs of an active investment if traded in fro a tracker versus the CGT you'd have to pay to sell and buy it. I then sold those with the highest cost/CGT ratio.

Thanks EthicsGradient, There will be some pretty eye watering gains but I have some enormous unrealised losses (Marstons, Centrica, one or two others) so I can probably cover the gains in the unprotected accounts. Fortunately quite a lot of the collectives are in the sheltered (SIPP and ISA) accounts.

You are right about using an x-Ray tool. Any thoughts or recommendations about this gratefully received as I’ve never used these.

I think I’m progressing from experienced investor to palooka in one easy thread

Best wishes, Steve

[Wuffle]

To my eyes, the pf is a big Global ETF core and then a load of other stuff best described as 'not USA' as per Richfools observation.
The lack of an ETF called 'not USA' appears to have forced you down the road of multiple holdings.
This then appears to have been further complicated by an insistence on an actively managed mirror to the passive in each case.

Assuming the above is on purpose (less than 55% USA with a slant towards income and the UK) the simplest approximation would seem to be loads of the (one) global tracker, more FCIT, just MYI (without all the regional trackers) in proportion and maybe the VHYL and either (how committed are you?) MRCH or CTY.

See Adamski's portfolio in the pf review section for a nice example of getting a lot done with few holdings.

W (an idiot who can't get his own stuff right).

[LooseCannon101]

I wouldn't worry too much as your investment collection will more than suffice.

Chopping and changing investments is usually a mistake once one has achieved a highly diverse world equity portfolio. I would try to think in terms of the totality rather than the individual investments.

[Steveam]

Each reply has been extremely helpful. Leading me to think about my objectives, my biases, CGT management, benefits of simplification (which would probably lead to lower annual costs). All against an option of doing nothing or very little as the “collection” does ok as it is (measured against what?) and keeps me in peanuts without much effort.

Thanks all, much appreciated.

Best wishes, Steve

[richfool]

This thread has prompted my thinking further. Does anyone know of an accumulating version of VEVE (VEVE being a "distribution" developed world tracker traded in GBP).

Also, am I right in thinking that SWDA is an "All World" ETF, as opposed to "developed world"?

[dundas666]

This thread has prompted my thinking further. Does anyone know of an accumulating version of VEVE (VEVE being a "distribution" developed world tracker traded in GBP).

Also, am I right in thinking that SWDA is an "All World" ETF, as opposed to "developed world"?

I'm not sure as I don't have any Vanguard, but perhaps VHGV is the accumulating version of VEVE?

[Newroad]

Afternoon All.

SWDA is developed world - so no emerging markets and consequently, a higher US concentration than VWRL (or its accumulating stablemate, VWRP).

VHVG (I think VHGV above may have been a typo) is the accumulating version of VEVE, but apparently may not be available on Vanguard's own retail platform.

Regards, Newroad

[Dod101]

I think a lot of you think too much.If you have something that works for you why worry? I mean of course is meeting your objectives. Go and do something else with your spare time. I assure you that it does not last long.
By the time you have got your optimum portfolio (which does not exist) it will all be too late.
Dod

[richfool]

Afternoon All.

SWDA is developed world - so no emerging markets and consequently, a higher US concentration than VWRL (or its accumulating stablemate, VWRP).

VHVG (I think VHGV above may have been a typo) is the accumulating version of VEVE, but apparently may not be available on Vanguard's own retail platform.

Regards, Newroad

Ah, thank you for that Newroad and Dundas. It is indeed VHVG. And (VHVG) also has the low TER of 0.12% that VEVE has.

Noted that SWDA is also developed world (TER 0.22). I couldn't get any comparison performance figures for SWDA, though I could for VEVE and VHVG.

I'm just pondering whether there is any significant difference between "FTSE Developed World" (as with VEVE and VHVG) and "MSCI World" (as in the case of SWDA)!?

[richfool]

I think a lot of you think too much.If you have something that works for you why worry? I mean of course is meeting your objectives. Go and do something else with your spare time. I assure you that it does not last long.
By the time you have got your optimum portfolio (which does not exist) it will all be too late.
Dod

I think a lot of you too Dod

I have something that works for me and meets my objectives, but am now working on something for my wife, (a low-maintenance portfolio)!

If I may say so, your posts often bring an added tangential viewpoint to the actual question posed on a thread.

I took my exercise/walk out and coffee this morning, before the rain. Now this afternoon, it's a case of "working from home", while its raining..

[dundas666]

Afternoon All.

SWDA is developed world - so no emerging markets and consequently, a higher US concentration than VWRL (or its accumulating stablemate, VWRP).

VHVG (I think VHGV above may have been a typo) is the accumulating version of VEVE, but apparently may not be available on Vanguard's own retail platform.

Regards, Newroad

Ha ha yes VHGV was a typo, unless you'd be interested in a global heavy goods vehicle tracker!

[richfool]

For anyone interested in the differences vetween the MSCI and FTSE World and Developed World Indices:

https://www.justetf.com/uk/news/etf/msc ... mid%2Dcaps.

Extract/Example:
The biggest discrepancy between the two index providers is whether they count certain countries as developed or emerging markets. For example, South Korea is classified as an emerging nation by MSCI but has been promoted to developed market status by FTSE. Therefore South Korea is included in FTSE’s developed market index but not its emerging market one, and vice versa for MSCI. Meanwhile, Poland was upgraded to developed status by FTSE in 2018, whereas MSCI still remains unpersuaded – leaving Poland in its emerging market league for now.

[Steveam]

Thanks for reviving this thread. I started the thread with a dis-organised chaos of collectives. I've been rationalizing these at the same time as doing a clean-up of my unrealized gains and losses mainly on direct share holdings. The new list is:

(Name) (EPIC) (% of Median Value)

Aberdeen Asian Income AAIF 74%
Caledonia IT CLND 142%
City of London CTY 98%
CT UK Cap & Income CTUK 77%
F&C FCIT 195%
Henderson Far East HFEL 52%
JPM Indian JII 100%
Law Debenture LWDB 112%
Merchants MRCH 112%
Global Smaller Co.s GSCT 88%
iS Core World SWDA 313%
Van World HY VHYL 207%
Van FTSE Dev World VEVE 408%
Van Emerging Markets VFEM 84%

There is still a chunk of change to invest but I'm pleased to have bought LWDB just before its 5% rise over the last couple of days.

The major changes so far have been exiting small holdings, rationalizing the Vanguard holdings (which will also reduce costs) and buying LWDB. I may yet get shot of AAIF, CTY, CTUK, and HFEL. I'm pleased with the progress so far (from 20 holdings to 14 holdings although I don't have a particular target in mind.)

I've much appreciated the comments and advice I received after the original post - many, many thanks.

Best wishes, Steve

[richfool]

Thanks for reviving this thread. I started the thread with a dis-organised chaos of collectives. I've been rationalizing these at the same time as doing a clean-up of my unrealized gains and losses mainly on direct share holdings. The new list is:

(Name) (EPIC) (% of Median Value)

Aberdeen Asian Income AAIF 74%
Caledonia IT CLND 142%
City of London CTY 98%
CT UK Cap & Income CTUK 77%
F&C FCIT 195%
Henderson Far East HFEL 52%
JPM Indian JII 100%
Law Debenture LWDB 112%
Merchants MRCH 112%
Global Smaller Co.s GSCT 88%
iS Core World SWDA 313%
Van World HY VHYL 207%
Van FTSE Dev World VEVE 408%
Van Emerging Markets VFEM 84%

There is still a chunk of change to invest but I'm pleased to have bought LWDB just before its 5% rise over the last couple of days.

The major changes so far have been exiting small holdings, rationalizing the Vanguard holdings (which will also reduce costs) and buying LWDB. I may yet get shot of AAIF, CTY, CTUK, and HFEL. I'm pleased with the progress so far (from 20 holdings to 14 holdings although I don't have a particular target in mind.)

I've much appreciated the comments and advice I received after the original post - many, many thanks.

Best wishes, Steve

Hi Steve, I'm just nibbling around the edges really, with these comments:

I note that AAIF and HFEL both cover Asia Pacific, including some India. I hold AAIF. I'm not a lover of HFEL due to its capital depreciation.

I note you have 4 trusts that cover the UK. I too hold 4! - LWDB (my favourite), plus DIG, MRCH and EDIN. Though I ought to reduce by at least one, but all are in negative positions currently.

I would think you will have a fair bit of overlap between some of the Global ETF's e.g. SWDA and VEVE.

Regards.