S&S ISA - critique my geographical split of funds

[daddy cool]

I am a finance noob - but this year opened up a S&S ISA with Fidelity, and have been adding money to about a dozen funds - some doing well, some bombing, overall just slightly in the green. (Funds are split about 86% stocks, 10% Bonds, by the way)

Anyway, according to the report, this is (geographically) how they are split:

United Kingdom 33.74%
North America 25.29%
Asia Developed 13.39%
Asia Emerging 11.75%
Australasia 8.24%
Europe developed 5.24%
Japan 1.43%
Latin America 0.38%
Africa/MiddleEast 0.37%
Not Classified 0.14%
Europe Emerging 0.02%

Anything jump out as particularly good/bad?
Apart from broadly thinking "lets have something from [insert country] now" when I previously picked a fund, the above splits are just how its ended up.
Happy to hear any advice to influence future deposits.

[XJ75]

I'm certainly not an expert but I'm not sure if it's a good to have the biggest exposure to the UK in the current climate.

It also depends on whether you have a bias towards large cap, mid cap or small cap. There's an argument that a lot of large cap stock has fairly global exposure even if it's based and listed in one place.

Also, Fidelity are expensive. Depending on how much you have invested you could save a fair amount by changing to a cheaper provider. I recently switched from Fidelity to Interactive Investor. Have a look here:

http://monevator.com/compare-the-brokers/

[Derek Chevalier]

daddy cool said:

I am a finance noob - but this year opened up a S&S ISA with Fidelity, and have been adding money to about a dozen funds - some doing well, some bombing, overall just slightly in the green. (Funds are split about 86% stocks, 10% Bonds, by the way)

Anyway, according to the report, this is (geographically) how they are split:

United Kingdom 33.74%
North America 25.29%
Asia Developed 13.39%
Asia Emerging 11.75%
Australasia 8.24%
Europe developed 5.24%
Japan 1.43%
Latin America 0.38%
Africa/MiddleEast 0.37%
Not Classified 0.14%
Europe Emerging 0.02%

Anything jump out as particularly good/bad?
Apart from broadly thinking "lets have something from [insert country] now" when I previously picked a fund, the above splits are just how its ended up.
Happy to hear any advice to influence future deposits.

Why are you picking funds?

[Simpo Two]

Derek Chevalier said:

Why are you picking funds?

Who else is supposed to?

[Derek Chevalier]

Simpo Two said:

Derek Chevalier said:

Why are you picking funds?

Who else is supposed to?

Sorry, to clarify not sure of the benefit of picking 12 individual funds over something like a global index tracker.

[emicen]

XJ75 said:

I'm certainly not an expert but I'm not sure if it's a good to have the biggest exposure to the UK in the current climate.

It also depends on whether you have a bias towards large cap, mid cap or small cap. There's an argument that a lot of large cap stock has fairly global exposure even if it's based and listed in one place.

Also, Fidelity are expensive. Depending on how much you have invested you could save a fair amount by changing to a cheaper provider. I recently switched from Fidelity to Interactive Investor. Have a look here:

http://monevator.com/compare-the-brokers/

Funnily enough my pensions are through Fidelity.

I recently did a break down of my holdings. The initial default fund on my last work’s pension plan was a global fund. Turns out it’s 55.x% UK.

With next March looming, I’m sitting with about 35% of the total pot in UK equities. Don’t recall the breakdown of market caps.

Gut instinct tells me that’s risky, but I kind of feel I’d be rolling the dice either way, holding or changing.

[mikeiow]

Derek Chevalier said:

Simpo Two said:

Derek Chevalier said:

Why are you picking funds?

Who else is supposed to?

Sorry, to clarify not sure of the benefit of picking 12 individual funds over something like a global index tracker.

I’m with you on that sentiment.....I’m a fan of the logic behind http://kroijer.com
Low cost global tracker....that would be my approach

[walm]

Derek Chevalier said:

Sorry, to clarify not sure of the benefit of picking 12 individual funds over something like a global index tracker.

+1

Also to the original question I would have more Europe developed. Similar weighting to US. Probably shift some out of the UK to cover it, although in reality most of the UK isn't really UK - it's geographically diverse since most large caps are international.

[bitchstewie]

mikeiow said:

I’m with you on that sentiment.....I’m a fan of the logic behind http://kroijer.com
Low cost global tracker....that would be my approach

I'm a fan of the logic but it's not what I do.

That said, I wouldn't dive in with 12, I'd focus on 2-3 "core" holdings and maybe surround those with a tracker/multi-asset which is what I'm considering doing.

[gazza5]

I'm in the process of streamlining my funds, converting some into others. AFter converting the ones I have done I will have the following:

I have 2 global equity linked ones
One FTSE 250, One FTSE all share, one FTSE 100 fund
One south america
One japan (only)
One asia
One America
One European

To me that still seems too much - but then it is quite diverse.

I am at the moment converting some of the FTSE 250, all share / 100 into a american fund as I had 50% exposure to UK originally.

After I have trimmed the number of funds I will roughly have these %

America 20%
Japan 10%
Europe 10%
Asia 20%
South America 10%
Global equity 20%
FTSE ones 10%

I do feel america is over valued at the moment - but it keeps going up and up!

[anonymous-user]

daddy cool said:

Asia Developed 13.39%
Asia Emerging 11.75%
Australasia 8.24%

Europe developed 5.24%
Europe Emerging 0.02%

Anything jump out as particularly good/bad?

To my eye the percentages above are out of proportion. 5.26% in Europe looks waaaay underweight compared with your other allocatons. Germany on its own ranks around 4th or 5th place among global economies. However, if you believe Europe is on a losing streak it might make some sense.

I prefer your approach over a global tracker. "A rising tide lifts all boats". But guess what happens when the tide goes out?

[mikeiow]

rockin said:

To my eye the percentages above are out of proportion. 5.26% in Europe looks waaaay underweight compared with your other allocatons. Germany on its own ranks around 4th or 5th place among global economies. However, if you believe Europe is on a losing streak it might make some sense.

I prefer your approach over a global tracker. "A rising tide lifts all boats". But guess what happens when the tide goes out?

If “the tide goes out” - I assume you mean a global recession dropping everything massively?

If that happens... I believe you’d have to be incredibly lucky to NOT be impacted by that with funds you hand-pick.
Remember, one might hope an active fund manager (dealing in this stuff daily) might beat the markets for one year.....be less likely to repeat that the second, and for 3 or 4 in a row the chances get ever slimmer, particularly when you take the higher fees you pay for that over low cost trackers.
Timing the market is not an easy game!

[anonymous-user]

mikeiow said:

Timing the market is not an easy game!

It's not about timing the market, it's about whether you have the mindset of a "leader" or of a "follower". I could never be comfortable buying one big bucket of everything.

[Derek Chevalier]

rockin said:

mikeiow said:

Timing the market is not an easy game!

It's not about timing the market, it's about whether you have the mindset of a "leader" or of a "follower". I could never be comfortable buying one big bucket of everything.

What is a better alternative?

[anonymous-user]

Derek Chevalier said:

What is a better alternative?

As you can see from OP, he's made a decision that Europe's in the can and Asia will go great guns. He may have genuine reasons to believe that's the case. With all investment decisions you don't know whether it's a stroke of genius or an outbreak of lunacy until it's too late, and the outcome is known.

It's all personal taste but I could never be happy with a "just buy everything" approach.

[daddy cool]

Thanks to all of you that have offered constructive criticism/advice - as I said in the first post, this is all new to me, and im 6 months into having my first S&S ISA, with basically no knowledge except having read once "how to own the world" (the book oft recommended on here), but perhaps I need to read it again!

As I tried to say before, I haven't really "chosen" this geographical split - rather I used Fidelity "investment finder" tool and mostly focussed on ones with a good Morningstar rating, and which seemed to have (historically) done quite well. Naively I applied the "diversity is good" principle to having (it seems) more separate funds than is ideal, and its only when I found the geographic breakdown that I wondered whether it was a good/bad/indifferent split - hence the reason I started this topic.

So, what ive learnt:
1) Increase the weighting of Europe
2) Streamline the # of funds, and focus on some more global trackers
3) Do some more reading and learning before I invest more.

Cheers!