So as I settle into FIRE blogging, I realise I haven’t actually shared the nitty-gritty investing details yet of what’s actually in my investment portfolio. As in the actual investment instruments I hold and the amounts allocated to each. And more importantly, why I’ve made those decisions, and what I did to get comfortable with them. So here comes the numbers and details.
Investment Portfolio, what is this?
Firstly, let’s make sure we are on the same page. When I say my investment portfolio, I am referring to money I have invested in the stock market for long-term growth. For me, this is specifically my ISA, taxable investments and SIPP. These total around £424k in value. I don’t have anything any more spicy than these. You can also read the backstory on my evolution from saver to investor.
I am not including any cash I hold as a slush fund, which varies between £5k-£30k usually. This slush fund is kept in a high (relative to base rate) interest rate current account. Given my high savings rate and slush fund, I don’t have a specific emergency fund that I keep in cash.
I also don’t count a small pension which is ~£45k in my allocation, as most of it is effectively cash (it’s a very weird pension, which weathered the last crash well). My other main asset is the house that I live in; I don’t consider that asset to be in my investment portfolio, but for balance and disclosure it’s important to note it exists and has about £250k equity locked up in it.
So how do I approach investing? I’m a firm believer in buying low-cost tracker funds and holding them. I don’t want to support any fund managers and always aim for the best value for my money. To reduce charges I buy ETFs (exchange-traded funds) – I buy these rather than mutual funds as they cost less to hold in UK platforms on an ongoing basis. And if you have a sizeable taxable portfolio, they are easier to optimise for tax. So while I am bought into passive investing completely and buy passive funds, I do like some adventure in my asset allocation.
Asset Class Allocation
I am investing over a long horizon, hence I have a spicy adventurous portfolio – I aim for 95% stocks and 5% bonds. Many would consider this cowboy territory, and more risk-averse people will no doubt recoil with horror. Nonetheless, given I am still working, make over six figures and have marketable skills, I am very happy and comfortable with this risk profile.
I divide my portfolio into the following assets classes in the table below. This also shows where I am now and my target percentage, alongside the delta how far away from them I am.
|Class||Value||%||Target %||Delta %|
As you can see in the table, I’m overweight in UK stocks, and underweight in EM/US stocks based on my targets. That’s mainly as given all the Brexit drama, I decided to reduce my UK exposure. I’m still rebalancing just with my new contributions at the moment, given I’m piling at least £80k each year into my portfolio this is working ok so far.
So where is my money? I absolutely love this visual representation from my broker, so am sharing it with you here. I’m very happy with the country distribution; and as you might be able to tell, given I’m learning Chinese I am very pro-China, and think they are going to only grow in global importance. And yes, with Brexit, it is likely the UK’s global importance will diminish – hence keeping funds in foreign stocks hedges against the pound crashing. (Just ignore the benchmark here – It’s a non-relevant UK only benchmark).
Exact ETF’s held
If you really want the details – here are the exact ETF’s I hold, and which asset class I put them in. My choices are mainly driven by the ongoing charges, which I show here for reference, alongside being a reputable company at indexing. Blackrock (who iShares are part of) easily meets the bill.
|iShares Core S&P 500 ETF USD Acc GBP||US Stocks||0.07||38.43|
|iShares Core MSCI EM IMI ETF USD Acc GBP||EM Stocks||0.18||18.38|
|iShares FTSE 100 ETF GBP Acc GBP||UK Stocks||0.07||17.25|
|iShares Core MSCI Japan IMI ETF USD Acc GBP||Asia Stocks||0.20||4.69|
|iShares Core EURO STOXX 50 ETF EUR Acc GBP||Euro Stocks||0.10||4.40|
|iShares EURO STOXX Small ETF EUR Dist GBP||Euro Stocks||0.40||2.84|
|iShares Core MSCI Pac ex-Jpn ETF USD Acc GBP||Asia Stocks||0.20||2.57|
|iShares £ Index-Lnkd Gilts ETF GBP Dist||Bonds||0.25||2.06|
|iShares Dev Mkts Prpty Yld ETF USD Dist GBP||Property||0.59||2.00|
|iShares Core £ Corp Bond ETF GBP Dist||Bonds||0.20||1.73|
|iShares Global Corp Bond ETF USD Dist GBP||Bonds||0.20||1.49|
|iShares European Prpty Yld ETF EUR Dist GBP||Property||0.40||1.43|
|iShares UK Property ETF GBP Dist||Property||0.40||1.31|
|iShares Asia Property Yield ETF USD Dist GBP||Property||0.59||1.00|
|iShares MSCI AC FarEast exJpn SC ETF$Dis GBP Mutual Fund||Asia Stocks||0.74||0.43|
It’s always fascinating to look under the hood of these funds and see what companies I am actually holding stock of. And how my holdings are distributed across sectors and geographies. Here are my 10 biggest holdings, with the percentage of my investment portfolio they make up.
- 1.52% Apple
- 1.25% Microsoft
- 1.23% HSBC
- 1.12% Amazon.com
- 1.05% Royal Dutch Shell PLC Class A
- 0.98% BP
- 0.88% Royal Dutch Shell PLC B
- 0.86% Tencent Holdings Ltd
- 0.79% Facebook Inc A
- 0.75% British American Tobacco PLC
The fact that my biggest individual holding is only 1.5% is very reassuring that I am heavily diversified although it does get me thinking can you be too diversified? I do not disagree that I like making things complex and very similar results could be obtained with a simpler portfolio, but would that be as fun?
On the right track?
Initially, this confirms I am still too heavily invested in the UK – the FTSE only has 100 stocks and they are far too dominant in my top 10 holdings list. Moreover, I am conflicted with the sin stock above. As a vehement anti-smoker, I struggle with making money from people’s addictions – yet BATS is riding high on the FTSE and doing well. Not to mention the heavy petro-chems in Shell and BP that also dominate the FTSE.
And call it a personal preference, but I want to see more tech and forward-looking companies on my top 10. Hence upping my EM and US stocks feel like a good approach, as they are much more heavily weighted in tech than the UK market.
Other bloggers who share
- Jo shares the details of her portfolio and it’s very much on the conservative side
- She holds over 40% in cash/fixed rate savings and 25% in property
- And Young Fi Guy adopts a similarly adventurous approach to me
- He has 90% stocks and 10% bonds
Over to you
- How about you?
- Do you openly share your portfolio – if so link me below, please 🙂
- What’s in your portfolio?
- Are you concerned about the Brexit Impact?
Thanks for reading – please leave a comment below and join in the conversation. You can also connect on Twitter. Looking forward to your thoughts and ideas – all are welcome.