In terms of how to breathe life into your portfolio, I’d consider adopting the “core-satellite” investment approach – start with the most important building blocks of your portfolio, a few globally diversified funds accounting for the lion’s share (70pc to 80pc) of your portfolio.
As a passive, core holdings, take a look at iShares Core MSCI World UCITS ETF, which is about 70pc invested in the US, owning the largest 1,500 companies in the world across developed markets. An active fund that would nicely complement this is Fundsmith Equity – it invests in “quality” shares like Microsoft and Novo Nordisk and has been performing well.
Despite disappointing returns in Britain, I still think you’re right to allocate some money here. It’s one of the cheapest markets globally and could re-rate once the economy steadies and interest rates fall. Private equity buyers are also snapping up UK companies, so clearly there is value according to some very sophisticated players.
JPM UK Equity Core is a nice core option worth exploring. It is benchmark-aware, meaning that returns won’t differ too much from the FTSE All Share index, but the managers will take overweight positions where they see opportunities.
It’s currently overweight oil and gas with Shell the largest position – a stock you’re a fan of already. It costs just 0.4pc, which is good value for an actively managed fund.
Once you’ve built up your core holdings and set some cash aside, a smaller percentage is left over for some riskier, more exciting satellite holdings – possibly including any single stock names you still feel attached to, or some more targeted funds, or both.
This is where your allocation to Poland could “zlot” in (excuse the pun). Although, I’m not entirely sure why you’re bullish here, possibly because it has rebounded strongly since the start of the Ukraine war and shares still appear cheap. The iShares MSCI Poland UCITS ETF will get you access. But with just 14 holdings, it is likely to be volatile so proceed with caution!
As for your desire to invest in Japan, I’d look at Man GLG Japan CoreAlpha Professional. It’s a new addition to our Super 60 recommended fund list. Opportunities in the portfolio are viewed as either “Core” or “Alpha”, although there is frequently some overlap between the two.
The team looks to maintain a core portfolio of large-cap value stocks, which are generally well-regarded in terms of quality and are often considered “blue-chip” but remain at attractive valuations.
They also target contrarian “alpha” opportunities: stocks that have underperformed the market for an extended period, often related to macroeconomic and business cycles. The fund is a top quartile performer versus peers over one, three and five years.
I’m sorry you feel like you’ve lost your confidence, but I hope this provides you with a starting point for how to go about reinvigorating your portfolio. You are clearly a very engaged and competent investor, so you have lots to be confident about.
With a few changes, such as switching more into funds and adopting the core-satellite approach to name a couple, I believe in your ability to become an Isa millionaire in your desired timeframe.
Good luck, and I look forward to hearing all about it when you get there.
