Ms ZiYou Investment Portfolio
Money

2019 Portfolio: Where my money is invested

I like starting new traditions and feel a mid-year portfolio review is a good calendar addition. I’ve already got in and reviewed my goals for 2019, so now it’s time to deep dive into the money. Time to have a look at the portfolio and check it is helping me towards my long term goals.

What do I mean when I talk about my Investment Portfolio

Firstly, let’s make sure we are on the same page. When I say my investment portfolio, I am referring to the money I have invested in the stock market for long-term growth. For me, this is specifically my ISA, taxable investments and SIPP. I don’t have anything any more spicy than these.

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 just below-inflation interest rate (yet still the best on offer) current account. I don’t have a specific emergency fund apart from this fund and a bit of money in my company.

In addition, I also don’t count a small pension which is ~£48k 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.

My investor policy statement

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 as detailed in why the bros scared me post.

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.

Each year I aim to fill my ISA, then add funds to my taxable account. From mid-2019 onwards I am no longer contributing to my SIPP as I feel this is nearly at my FIRE target.

So while I am bought into passive investing completely and buy passive funds, I do like some spice in my asset allocation.

Asset Class Allocation

As I am investing over a long horizon, I have an 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.

Given my (as at July 2019) non-working situation you’d think I should review this? In reality, I am still happy with this approach given the crossroads I am at – I understand that if I take a sabbatical this gives me the best chance of growth and never having to work again. But it does come with the not insignificant downside of being high risk.

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.

ClassValue%Target %Delta %
US Stocks£219k40.840.00.8
UK Stocks£75k1414.00
EM Stocks£118k21.922.0-0.1
Euro Stocks£33k6.17.0-0.9
Asia Stocks£39k7.37.00.3
Bonds£27k4.95.0-0.1
Small Cap Stocks£27k5.05.00

Each month I share the country allocations and Top 10 holdings

Every month more granular details are shared in my net worth updates, along with some commentary and monthly thoughts on the good times and bad times. You can read these here:

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. The final column Percentage shows the percentage of my portfolio this ETF makes up.

ETFAsset ClassChargePercentage
iShares Core S&P 500 ETF USD Acc GBPUS Stocks0.0736.33
iShares Core MSCI EM IMI ETF USD Acc GBPEM Stocks0.1822.00
iShares FTSE 100 ETF GBP Acc GBPUK Stocks0.0714.19
SPDR MSCI World Small Cap ETF GBPSmall Cap Stocks0.455.00
iShares £ Index-Lnkd Gilts ETF GBP DistBonds0.254.98
iShares Core MSCI Japan IMI ETF USD Acc GBPAsia Stocks0.204.61
iShares S&P SmallCap 600 ETF USD Dist GBPSmall Cap Stocks0.404.02
iShares Core EURO STOXX 50 ETF EUR Acc GBPEuro Stocks0.103.82
iShares Core MSCI Pac ex-Jpn ETF USD Acc GBPAsia Stocks0.202.67
iShares EURO STOXX Small ETF EUR Dist GBPEuro Stocks0.402.38

Squeezing those charges out

My funds themselves have a 0.15% average ongoing fee, which I feel is very reasonable. But truth be told, there are many more charges and costs than the ongoing fees that are clearly labelled.

A recent charge summary from my broker attempted to calculate all the other charges, and it was very interesting. As well as ongoing fees, it included more piecemeal and transaction-based charges such as dealing fees. Platform fees were also included which I have to pay. Additionally, fees that I don’t pay with the structure of my investments such as entry/exit fees and performance fees are also included.

One charge that I know exists with ETF’s, but rarely bother to consider, the bid-offer spread was also included for completeness. Now we are getting into the true nitty-gritty, and I’m glad they had to calculate it rather than me!

Now at the end, drumroll please ….. my overall charges are just 0.39% ….. which I’m to be honest, very happy with. It could have been much worse. And it does bring to mind that the 0.15% ongoing fee is just a starter.

Performance to July 2019

So we’ve covered the plan, the assets allocation and portfolio itself. What’s left to look at but the performance now? I’ve got some stats for your below, demonstrating the bull run marvellously.

By far the most interesting to me is the return analysis – demonstrating the sum is greater than the parts. What I mean by that is the risk of holding a mixed portfolio which is not directly correlated significantly reduces the overall risk. The standard deviation of the portfolio is less than the standard deviation of all the constituent ETF’s.

June 2018’s thoughts

I blogged about my overall portfolio last year, where I had this analysis.

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.

Today’s Thoughts

Well, what has changed over the year? Mainly following the plan from last year to reduce UK and increase emerging market exposure. Additionally, I have simplified my holdings down from 16 to 10 ETF’s.  And also removed the property allocation, replacing with small-cap stocks. But apart from this simplification and change of 5% of the portfolio, I have not made any other deliberate changes. From someone who loves tinkering/refining – that is a big accomplishment.

To conclude, I am happy with my portfolio in 2019 and am not making any rash changes until both my sabbatical/working situation and the ongoing Brexit drama are fleshed out in significantly more detail.

Over to you

  • What are your thoughts?
  • Am I too much of a risk-taker?
  • Do you openly share your portfolio – if so link me below, please 🙂

Thank you for reading – please leave a comment below and join in the conversation. You can also connect on Twitter or contact me privately.

26 comments on “2019 Portfolio: Where my money is invested

  1. Great post. It’s always good to get different perspectives. I agree with your concepts and follow a very similar path to you regarding fees/ ETFs etc. Iam further away from FIRE than you and currently hold no bonds, but I do hold a Gold fund for a little insurance. I’ll take a look at bonds over the next few months as I know this is missing.

  2. Is it simple to do graphs such as you have here?

    I’m pretty useless with excel. I have an extremely simple excel spreadsheet with some sum formulas in that calculates the amount of cash, shares and p2p I have and equity in the house as well as the interest and dividends earned each year

    I have a relatively large amount of cash (about 30k) at present as just about to do some house renovation and change my car. I’m part funding it on interest free credit cards as I get 2 years to pay it off and makes more sense to stay invested than sell. It will feel very weird being ‘in debt’ for a while

    current holdings are

    174k in a company pension with aegon flex target tracker adventurous. All equities and Closest I could get to a vanguard type tracker tracker but is 50% in UK stocks which is annoyingly high but the charge is 0.05% and has performed well the last few years (about 11% annualised return over the last 3 years) so I haven’t looked to change it yet. Can’t find anything else for a reasonable charge on the aegon platform. contribution 1270 a month including employers contribution. This will go up this month and considering upping it further

    106k in investments split :

    53k in vanguard lifestrategy 100
    16k in blackrock consensus 100

    2500 each (starting amount they’re a little different now) with pantheon vanguard small companies and fundsmith as satellites

    22k split between various p2p platforms. Average return probably about 6%

    7500 in a SAYE scheme with 2.5 years to go. Worhh double that current share price

    5800 in a Stock investment purchase plan with work where I can buy shares up to 90 out of my gross salary. Grossed up to 150 and is tax free once I’ve held for 5 years

    About 400 a month goes into these two

    I contribute about 500 a month to my isa just into lifestrategy 100 now plus top up when I can. Looking to build my liquidity as I have a relatively large amount in equity in my house and pensions for my age so an sacrificing tax efficiency to build my liquid assets

    Also have my house worth 490k with a mortgage of 275k

    Thats me. My partner has about 6k in cash savings and about 18k in a pension but is now building this at about 400 a month

    1. FBA – thanks for sharing your details. Sounds like you’ve got a solid foundation there and a great mixture of low-cost index funds.

      As for graphs – they are all courtesy of my broker – I am of the don’t reinvent the wheel mindset.

      1. These look like the paid-for version of MorningStar graphs I think? Curious to which broker provide them for free, as they’re very useful indeed.

  3. thanks for sharing your portoflio with us – what I am really impressed with is that you have it together – literally!
    I don’t think that I could scrape toegether all my shares/ETFs together into a simple report like this. I’m across different platforms, different account holders and if you add in things like P2P it’s a total mess!

      1. I’ve been trying to keep things simple and I’ve personally reduced my ocfs and platform fees over the last few years – that’s now neat and cheap but p2p is hard to judge apples with apples and vcts are a deal with the devil – tax rebate but high fees…

        1. Sounds like your simplification is going well – it’s always good when you get things where you want them to be.

          Have to admit I don’t have much P2P and just treat it as cash – as most of it is instantly accessible and the longer loans are mainly guaranteed (due to some being dodgy loans the platforms bought back and others through their yet untested provision funds).

          Although I have been tempted, I have never taken a bit of that VCT apple. Yet.

  4. Thanks for the post. I’m always fascinated by other people’s investment strategies. Just trying to settle on mine at the moment. I was planning on sticking to funds rather than ETFs as I’ll probably be more of a drip feed investor.

    Interested to know what you mean by ETFs being better for tax optimisation? Probably not an issue for me yet as I won’t have enough spare cash to invest outside of a pension or ISA for a while, but want to make sure I’m not missing anything!

    1. Hi FF – the decision between funds and ETFs is personal and complicated to work out which will really be cheapest – boiling down to predictions on dealing fees vs holding fees. As for tax efficiency – ETFs that accumulate result in capital gain tax rather than dividend tax.

      1. https://www.vanguardinvestor.co.uk/articles/latest-thoughts/how-it-works/income-or-accumulation

        “From a tax perspective, both income and accumulation shares incur the same taxes. You will incur tax on the income derived from interest or dividends; upon cashing in you may be subject to capital gains tax (CGT, on the capital growth of the investment).
        Accumulation shares, which, as we have seen, do not pay out a regular income, nevertheless are taxed on the ‘accumulated income’ at your regular income tax rate.”

      2. is it as simple as Acc ETFs result in Cap Gains not Dividends? I thought they also triggered taxable income – as per your broker annual statement? If not I may need to rejig a few things….!

  5. Hi Ms ZiYou,

    Thank you for sharing your portfolio in such detail, it’s always really cool to see someone else’s perspective. It’s very similar to mine while I was still working, I was 95% US total stock market, 1% individual stocks (GE and Berkshire) and 4% cash until early this year, when I knew I would fire in June. So in January I shifted all my assets to something more like 60% total stock market (about 60% of that in US market and the rest international), 30% total bond market (about 80% of that US and the rest international), and 10% cash. All index funds. Cash has always been in a high-interest bearing savings account that earns 2.1% (Amex savings). My fees average 0.07% which I’m super happy about (Mr. Bogle was the best!!). I also sold GE and plan to sell Berkshire later this year when the paychecks stop completely, before touching my funds.

    Going forward, I plan to keep the 60/30/10 split for at least the next few years, until I’m comfortable with my planned retirement budget and portfolio performance. While I was always comfortable with major market crashes when I was working, I suspect that won’t be the case once I start spending down my funds, and since I think we’re overdue for a significant drop soon, I’d rather play it safe for now.

    I’m all in mutual funds, and in retrospect I probably should have gone with ETFs for the tax considerations, as you note. That is my one regret, I just wasn’t thinking when I added bonds to my brokerage account 😖 Oh well, you live and you learn! Congrats Ms. ZiYou, your portfolio sure looks great!!

    1. Thanks FF – it’s good to know you had a similar approach. And likewise, I know we are due a drop – yet I seem to be taking the risky approach rather than your much more sensible moving to bonds. Only time will tell if I made the right call.

  6. You missed out the “Brexit dividend” !! when/if we are no longer in the EU we’ll no longer be sending billions to the EU! I think your picture at the bottom of your post sums the situation up perfectly!

    That 10 year performance is really good. I’d hold more cash, but I’m risk averse. The option of not working sounds good as long as you have plenty to do.

    Impressive stuff, thanks for sharing (and fatbritabroad).

    1. Oh yes – the imaginary Brexit dividend. I won’t hold my breath waiting for that one!

      Yes, the 10 year looks good but to me also indicates the need for a correction.

      Luckily I always have plenty to do – haven’t been bored yet!

  7. Mine is the non-thinking man’s portfolio. 80% in the pension at fairly low mgt charges. Around 10% in cash or cash like. Much of the rest in P2P and other oddities. House fully paid off.

    The broad rationale is I don’t think I need any more exposure to S&S etc. I have a few years of expenses in cash (and work still covers more than my expenses and is adding to the pension). Higher interest rates from P2P etc helps reduce exposure to inflation, but probably should reduce exposure to P2P which I’m slowly doing.

    1. Thanks Greencat – I do think there is a lot of benefit in the keeping it simple approach.

      I really don’t have much left in P2P so I lazily classify is as slush fund cash. I did reduce it after all the horror stories so have been running it down for years.

  8. I’m really interested about how people view P2P. Yes there have been some failures but my view is that these companies never had viable business models and had unrealistic returns. There are some great P2P platforms out there. I personally love P2P and have a sizeable chunk of FIRE money in that area. I use eight different platforms, all with good track records and only offering sensible return rates. I like the fairly stable returns these provide and this will be the foundation of my income when I go FI hopefully at the end of this year.

    Don’t get me wrong I have most of my money in funds, but I firmly believe P2P is here to stay. Like any investing, upfornt research is key before jumping in.There is an excellent website called 4thWay that covers indepth analysis of P2P and has a nice comparison tool.

    1. It’s a very good question – my views of P2P to be honest keep changing. Fundamentally I believe it’s somewhere around the risk level of bonds. Yet I’m lazy and classify it as cash.

      As to how the P2P industry will mature, as you say some players appear to be here to stay. And if interest rates increase, will still manage to remain competitive options?

  9. Love to read these posts and interesting to see how others invest – thanks for sharing.

    I personally like to hold more cash (several years spending, up to 5 years) as I am in phased retirement and don’t want to have to sell investments in a market downturn or if I have some large expenditure come up. The cash is also like a nuclear button for my part time job if I decide I’m fed up with it!

    You are super organised with tracking things. The reports are interesting – are these from your broker / platform or do you do this yourself?

    I started to track all my investments over many accounts (ISAs, pensions, investment accounts) in a master spreadsheet with values being looked up live from the FT funds site and Google. It turns out I have about 39 different investments – 22% in ETFs, 63% in funds (mostly old pension funds), 9% in investment trusts and 6% individual shares. I’d really like to do some sort of deep analysis on it to see where some of the investments overlap but some of the funds are hard to take apart. I did do some rough analysis on my total portfolio including cash and a second residential property I have and I’m about 50% in equities which I’m happy with.

    My current investment preference is to use ETFs in a SIPP and ISA to save on costs like you are doing – otherwise I’d throw it all in a Vanguard fund like VLS60. I’m also using investment trusts for some income in my ISA – I really like these for the regular dividend income. I hope to be able to withdraw dividends from the ETFs and ITs eventually to live on, but they get reinvested at the moment. Apart from that I have some old pension accounts to sort out and transfer but kind of stuck in analysis paralysis with that as to whether I really want things going to sterling cash and being out of the market in the current UK environment.

    1. Hi Bill – thanks for sharing your approach – I know I do need to hear from more people that are more cautious than me, especially as I like playing it a bit too close to the wire sometimes!

      The pretty bits and graphs are from my broker – Fidelity – I’m much too lazy to make something myself when theirs is not so bad. I also like the excel auto price feature for tracking.

      Overlaps are really interesting, but I suspect hard to do unless everything is in one place or you want to put the time in or use a paid service.

What do you think?