I recently changed my strategy mainly to ETFâs these are what I have so far in my portfolio, would you change any of them and/or suggestions to add?
I kept my BT shares and the fun/interest share on the mining.
What is your time horizon as that could provide more insight into the bond allocation (not saying itâs good/bad just need an explanation for high risk emerging markets plus short term bonds). I havenât looked into the exact holdings or yields to maturity of those specific bond funds but especially the short term and government ones probably arenât yielding too much.
Would like to ask you why China and Japan specifically? Could you explain why u choose those two and donât have any European stocks (aside from bt) while still having US
I canât say anything informed about your individual stocks as I simply donât know them or havenât looked at them. An overall pretty diversified portfolio with most of the risk from China being balanced out by your bonds while still having some exposure to traditional markets like us and japan. These are just my thoughts and only you could know what portfolio fits you and your personal situation best.
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Well I had a portfolio of investment shares, 1 share here 2 shares there and so on. It was in in the green but only making something like ÂŁ2.80 profit and I had ÂŁ260 invested.
Then I kept reading about more people getting better results from ETFâs plus I am 72 yrs old so looking at more short term rather than waiting long term for them to grow.
Someone pointed me to this:
https://www.youtube.com/watch?v=_chiIIxMGl0&feature=youtu.be
Lars Kroijer, he was saying you only need 2 ETFâs to see a good result, I got the impression he was talking more long term but I looked in to it anyway and decided to change my strategy.
As for the Japan & China ETFâs I read it somewhere that they were good investments, so I just got one of each to see how they performed. Iâm no where near an expert as you can see that is why I was asking advice.
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With that information I looked a bit more at your holdings, and have some remarks. Itâs on you if you agree with what I read, always make your own judgement as you know yourself a lot better than I do.
Equity
iShares China A
I suggest you sell it because emerging markets donât fit well imo with your time horizon, yeah sure it might play out over the long term but I donât think high risk/high potential reward is what fits you, but make your own judgement. (it also has a 0.40% expense ratio which doesnât help)
Invesco S&P high dividend low volatility
This ETF with a 0.30% expense ratio also doesnât feel well. I think your overpaying for that lower volatility and the higher dividends. Investing it in the regular market has a lower expense ratio but you could also create your own low volatility high dividens basket without that high expense ratio (if you want to go with this route the pie feature really helps, if you want suggestions feel free to ask 
HarbourVest Global Private Equity
It has an ongoing charge of 0.55% (correct me if Iâm wrong, I donât normally look at other funds than ETFâs) which is pretty high imho.
Vanguard FTSE Japan
Expense ratio of 0.15% is reasonable. I know that SPPW which is a world fund has a 0.12% ratio but that also includes europe, oceania, US so is less focused on Japan, but it depends on your goals if this fits well.
Bonds
iShares Core Global Aggregate Bond
Expense ratio of 0.10%, very good for a bond ETF. Canât find an yield to maturity (yield of the ETF portfolio, distribution yield and coupon yield are misleading), but the yield is probably pretty low as it contains a lot of medium term high credit quality government bonds. Seems good to keep maybe even add too (would have to look further into the yields as I canât find them).
iShares Global Government bond
Basically cash, average yield to maturity of 0.25% and an expense ratio of 0.25%âŠ
By buying this the only way for you to make money is if interest rates go down more in the short term. Rise in interest rates wouldnât be too fun for this fund as itâs stuck with a lot of low yielding long term government bonds.
PIMCO Short-Term High Yield Corporate Bond
If you want higher yield short term corporate bonds donât go trough Pimco please, the ongoing charge is 0.60% which is just way too high. Estimated YTM is 5.69% which is high, but considering it contains mostly junk bonds thatâs not so surprising. I donât know if you aimed for higher yields with this position or just the safer short term, because if you want high yields short term youâre going to get bad credit qualities and higher fees.
Suggestions for Pimco replacements (if you want):
iShares ÂŁ Ultrashort Bond UCITS ETF
Average weighted YTM (yield to maturity): 0.35%
Fee: 0.09%
Credit quality: very high mosty AAA
Duration: short
(wouldnât buy but similar to Pimco)
iShares $ Short Duration High Yield Corp Bond UCITS ETF
Average weighted YTM (yield to maturity): 4.44%
Fee: 0.45%-0.04% (securities lending)
Credit quality: BB + B so junk
Duration: short but with some 3+ year bonds
About the two ETF portfolio
The two fund portfolio is mostly meant to keep it simple. It has just two ETFâs for the bonds and equities but you could construct exactly the same portfolio with specialized ETFâs which have both bonds and equities (Vanguard has some in the US, donât know about availability and viability for europeans). You could go with one ETF and as long as itâs a diversified fund you would probably be very fine. For you I suggest you simplify your equities by having just 1 or 2 equity ETFâs and splitting a bit in the bond etf section as thatâs your shorter term part.
What is the goal of your portfolio? To produce income immediately or steadily grow for less than 5 years and then provide income/provide income along the way? With the equity in your portfolio it would suggest you still want it to grow (if your time horizon is less than 5 years I would suggest lowering the equity part significantly). Hope this helped, Iâm not a expert (especially in bonds) so investigate everything yourself!
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Wow! I didnât expect such an in depth response, it is really good of you to go to all that trouble.
Well after the hulabaloo about the market going topsy turvy I already did as you suggested lol.
I sold them all except one that seems to be doing OK, that is the iShares Global Government Bond.
I now have only that one stock in my portfolio, I have 2 unitis in it totaling ÂŁ10.92
Itâs in the green showing a very small profit of +ÂŁ1.01 (0.09%)
I will have a look at the ETF you suggested, Iâm open to try anything, I drew out some of my money too, so now I donât have a lot to play with, Iâm not going to buy much more for a while in the hope that things will calm down lol.
Just a suggestion but maybe looking into some of the âsaferâ stocks also might be an option to consider as bonds arenât yielding as much and most stocks wonât fit your risk profile/time horizon.
Some examples of âsaferâ stocks
- Waste Management: handles trash in the USA, produces gas from collected waste for selling or for use in own garbage truck fleet.
- American Water Works: water utility in the US
- Essential Utilities: water utility in the US
- Next Era Energy: electric utility in the US (mostly gas/nuclear/renewables)
- Costco: US membership-only warehouses
- Automatic Data Processing: US provider of hr management software and services.
Maybe REITs in the datacenter and industrial space also can provide some safety:
- Tritax Big Box: UK big distribution centres owner
- Prologis: logistic real estate globally focusing on supply chains
- Stag Industrial: industrial properties in the US
Maybe even a retail REIT like Reality income can be interesting as it provides real estate to pharmacies, grocery stores and more.
Note that all of these pay dividends, and Realty income and Stag even pay monthly.
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Iâm in the UK, I see you suggest a lot of US stocks, will some of those be that good for me, I mean after the currency conversion Iâve notice some stocks are not as good, Iâm not criticising, Im just asking?
I have also tried to cut down how much Iâm spending as well on buying, I drew out some of my money so Iâm trying to be a bit careful and limit my budget.
The US market is just bigger so there are more stocks there, only limiting to the UK would negate the currency risk but severely limit your choices. Maybe having a mix of US/UK/Europe would mostly diversify your currency risk. You could also hedge away the currency risk but I donât think thatâs a good solution here.
I donât know many UK stocks, especially safer ones so I canât help you much with that. Maybe Unilever, NestlĂ© (if social responsibility isnât a priority) or some euro healthcare stocks (Sanofi, GSK, Novo Nordisk, Novartis, Roche). But all of these are in general higher risk than the stocks I listed in the earlier post. If your going with Unilever maybe think about arbitrating the NV -> Plc conversion (and also avoid stamp duty).
WIth Uk stocks, due to your account size, itâs better if you buy in valueâs of under 1.1 euro (or whatever that is in pounds) so you avoid all stamp duty (same goes for french transaction tax if youâre buying french stocks).
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Not sure if this is a bit morbid but seeing as deaths are rising I just bought shares in a few funeral services.
Already one of them is on the up slide, so Iâll see what happens.
some are US shares so they are pending.
Safe stocks are a matter perception but some are def safer than others.
Looking through mine I classify National Grid, BAE Systems and Unilever as my safer UK stocks. NG has been on the up generally for the last month which is not surprising as the colder months close in. BAE is currently at levels last seen in 2014 but depends if the morality of defence stocks sits ok with you. ULVR is dipping at present so could give a good entry point.
I also have a couple of reits Bbox & Segro which you could consider.
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I own some QinetiQ stocks that is a very defensive stock long term (currently around ÂŁ2.40 a share).
I would say National Grid is a good Defensive stock as well but they tend to be heavily regulated and wonât grow as much but you can get a good return long term.
BBOX is a great cheap stock at the moment and work with Amazon for warehousing their goods.
I would also recommend a Retailer Stock that has a healthy balance sheet and is currently a low stock that is not just catering to Food but also Clothes and Gardening like B&M or something like that .
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A while ago I had most of my shares in retail and true enough some did very well, problem was in my case I have limited funds so I was only making a few pence hear and there, and as you know it only takes 1 or 2 to take a dip and my portfolio went down too lol.
Iâm new to all this so tried ETFâs after reading various comments and watching YouTube videos, but Iâll be honest I am not sure what a lot of these ETFâs actually do and what they mean.
Anyway like I mentioned above I had a thought, what companies are still thriving during this pandemic? So I thought well people are dying all the time so I looked for funeral companies, a lot are private but I found a few that have shares so I bought some.
I only found 4 with a quick search but Iâm sure there must be more, so Iâll have further look, itâs early days yet but they have put my portfolio in the green lol.
I wouldnât worry about Prices dipping unless they are in the news about Bankruptcy. Most of mine are Red but that is expected because of Lockdowns. They will come good in 2 years.
B&M did very well during Covid from what I could tell and my Brother works there and couldnât take time off as it was classed as Essential
I wouldnât really look at Funerals as this is a short term thing. Unless we go to war or something I donât think Funerals are a good bet.
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I did have B&M and yes they shot up and they were doing great, they were one of my best, I was going to buy more but because of the price they rose to this may be wrong but I thought damn! I will be buying at the hight price so I left them.
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Fair enough, but I think they will keep growing as they keep opening new shops elsewhere and tend to have their Taxes in Luxembourg for obvious reasons.
I would happy to buy for 6 months straight up to ÂŁ7 before stopping.
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Hmm, I went in my local B&M not too long ago and I was surprised, they had revamped the shop, it was a pleasure to walk round, where as before that it was a bit scruffy.
I may look it them again now you mention it, I have to watch my money Iâm 72 and on an old age pension so havenât got a lot to just go out spending.
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I think perhaps Bonds is better for you as you do not wish to risk the little money you do have. Although I would really look into the Bond Market as the prices are expensive
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I did have a Government Bond ETF that seemed to do OK for a short while but then all of a sudden it dipped, like I said Iâm not too well up on ETFâs I may have acted too soon so I sold it.
I keep thinking of this phrase, âLong Termâ well I may live for another ten years or I may go sooner so I am thinking more short term lol.
I have said on other threads, I got in to this stuff too late, when I was younger it used to baffle me when I looked at stocks and shares, I thought it was only for the rich.
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There are Bonds you can buy in general (not stock market) that go from 1 year to 10 years.
You get a certain amount of Interest back and you get your money back after the period is over.
Sadly the Bond Market is expensive as Interest is at an all time low, as the higher Interest Bonds cost more money to buy so it might not be an option now.
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