Lessons from IC readers growth portfolios. Moira O Neill Personal Finance Editor Investors Chronicle

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2 Lessons from IC readers growth portfolios Moira O Neill Personal Finance Editor Investors Chronicle

3 About me Financial journalist for 17 years Personal Finance Editor at Investors Chronicle for past 7 years Portfolio clinic Funds coverage Top 100 Funds

4 About the reader portfolios

5 The good and the bad GOOD Tax wrappers (Isas and Sipps) Regular investing Reducing costs BAD Closet trackeritis Tip gathering Poor goal setting

6 A portfolio full of clutter - Jane, age 50 has 48 holdings Abcam Centrica Merchants Investment Trust Advanced Medical Solutions City Natural Res High Yield IT Murray Income Trust Amec Dignity National Express Artemis Alpha Trust Edinburgh IT National Grid Artemis Income Epistem holdings Persimmon Artemis Special Situations Fidelity China Special Situations IT Prudential Asian Citrus Holdings G4S Rolls-Royce Holding Assetco GlaxoSmithKline Scottish and Southern Energy BAE Systems Hansard Global Scottish Mortgage IT Balfour Beatty Herald IT Scottish Oriental Smaller Cos IT Barclays Hutchison China Meditech Templeton Emerging Markets IT Btitish Empire Securities & Gen IT Impax Environmental Markets IT Tissue Regenix Group BlackRock Smaller Companies IT International Power Vodafone BP Jupiter European Opportunities IT Weir Group Braemar Shipping Man Witan Pacific IT BTG Mercantile Investment Trust Worldwide Healthcare Trust

7 Core and satellite portfolio CORE (pays into this every month) HSBC Tracker portfolio 20,000 SATELLITES Afren 56,703 Petroceltic International 5,550 GlaxoSmithKline 18,526 Rolls-Royce 4,977 Tesco 21,156 Vodafone 18,787 SSE 29,049 BHP Billiton 22,293 BG 20,016 TOTAL 217,057

8 Investor policy statement Name, age, time horizon, target retirement date Financial goals, purpose of portfolio Risk and return expectations, investment philosophy, investment universe Target asset allocation, diversification policy, rebalancing and review

9 Taking the emotion out of investing Ideas from the readers Maximum 20 stocks When I buy shares in a company I set a stop loss of 20 per cent When a holding has doubled in price, I sell half to make a new investment or increase my holding in another stock I have a shortlist of 20 unit trusts and 20 investment trusts monitored regularly.

10 Tony, age 51 - investing for capital growth Aberdeen Asian Smaller Cos (AAS) 5% Pantheon Int Participations (PIN) 5% Allianz Technology (ATT) 5% RIT Capital Partners (RCP) 6% Baillie Gifford Shin Nippon (BGS) 4% Standard Life Smaller Cos (SLS) 2% Biotech Growth (BIOG) 5% Scottish Mortgage (SMT) 12% F&C Global Smaller Cos (FCS) 5% Strategic Equity Capital (SEC) 4% Finsbury Growth & Income (FGT) 5% Scottish Oriental Smaller Cos (SST) 4% Henderson Smaller Cos (HSL) 4% Temple Bar (TMPL) 5% HSBC S&P 500 UCITS ETF (HSPX) 6% Utilico Emerging Markets (UEM) 2% Jupiter European Opps (JEO) 5% Velocys (VLS) 4% JPMorgan Japanese (JFJ) 3% Cash 2%

11 Key points for Tony Look at portfolio in percentage terms Question holdings that account for more than 10% Look closely at geographical spread of portfolio 20 funds is enough

12 Age 33, Isa portfolio needs focus on asset allocation Artemis Strategic Assets 9% M&G Recovery 3% BlackRock Gold & General 2% M&G Strategic Corporate Bond 6% CF JM Finn Global Opportunities 3% Neptune Russia & Greater Russia 2% First State Global Emerging Mkts Ldrs 8% Newton Global Higher Income 8% Hargreaves Lansdown Multi-Mngr Inc & Grwth 16% Newton Real Return 11% Invesco Perpetual High Income 10% Molins 2% Invesco Perpetual Income 10% Optos 2% M&G Global Dividend 6% Unilever 2%

13 Key points for 33 year old Lower costs by using exchange traded funds FTSE All Share or World index tracker as core Regular monthly investments Suggested adventurous asset allocation: Equities 70%, Quality Bonds 10%, High yield bonds 5%, Hedge funds 10%, Cash 5%

14 Ron, age 59 - High growth expectations Aberdeen Asian Smaller Cos IT (AAS) 3% JPMorgan Smaller Companies IT (JMI) 3% Allianz Technology Trust (ATT) 3% Jupiter European Opps (JEO) 3% Baillie Gifford Japan Trust (BGFD) 5% Montanaro UK Smaller Cos IT (MTU) 3% Biotech Growth Trust (BIOG) 5% New City High Yield Fund (NCYF) 2% BlackRock Frontiers IT (BRFI) 3% Perpetual Income & Growth IT (PLI) 2% BlackRock Throgmorton Trust (THRG) 4% Schroder Oriental Income Fund (SOI) 3% City Natural Resources High Yield Trust (CYN) 2% Schroder UK Mid Cap Fund (SCP) 3% European Assets Trust (EAT) 4% Standard Life Inv Property Income (SLI) 3% Finsbury Growth & Income Trust (FGT) 3% TR Property Investment Trust (TRY) 3% Henderson Smaller Cos IT (HSL) 3% Utilico Emerging Markets (UEM) 3% Herald Investment Trust (HRI) 4% BlackRock Smaller Cos Trust (BRSC) 7% International Biotechnology Trust (IBT) 3% Edinburgh Investment Trust (EDIN) 9% Ishares Corp Bond Ex-Fin UCITS ETF (ISXF) 6% Scottish Mortgage IT (SMT) 3% JPMorgan Mid Cap IT (JMF) 5%

15 Key points for Ron Take inflation into account when setting retirement goals Allow for feeling more conservative as you approach retirement Watch for overlap in your portfolio same fund manger/similar holdings

16 Lessons from IC readers income portfolios Moira O Neill Personal Finance Editor Investors Chronicle moira.oneill@ft.com

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