Portfolio Analysis

I am currently unsure where to invest this year’s ISA allowance. I need to add some more cash to my Emergency fund (Cash ISA) so this means that I shall be contributing to a mini shares ISA as opposed to a maxi ISA.

In previous years it has been easier to see which areas looked over valued and avoid them, but at the moment it looks a little more tricky. Emerging markets have had a good run, commodities have had a very good run, most analysts seem to think that the US is looking expensive, Japan’s recovery seems to have faltered and the UK market has had a few bad days.

I know that trying to time the market is a fools game, so as I was starting from zero 3 years ago I just tried to get a good geographical spread of quality funds whilst avoiding areas that looked obviously expensive.

My portfolio is currently made up as follows:

Region	% of Total Portfolio
UNIT TRUSTS / OEICS
CF Ruffer Total Return Fund	23.5%
Cazenove UK Dynamic	5.9%
Artemis European Growth Fund	6.8%
Fidelity European	7.0%
Aberdeen Asia Pacific	7.2%
JPMorgan Japan Fund	6.8%
Jupiter Emerging European Opportunities	8.4%
INVESTMENT TRUSTS
SVM Global plc	26.7%
Templeton Emerging Markets Inv Tst plc	7.7%
TOTAL	100.0%

Before making any investments this year I decided to try and analyse my portfolio by geographic region so I can see if there are any areas of weakness in my asset allocation. This task did not prove to be that simple. I could find no one source that contained information about all my holdings, and different sources defined their regions differently. I have made the following list by using the BestInvest Portfolio Health Check Tool, which is available here:

http://www.bestinvest.co.uk/planning/portplan/portplan0.htm

and adjusted it slightly with reference to information from the individual fund managers.

Region	% of Total Portfolio
United Kingdom	19%
North America	9%
Japan	13%
Far East	15%
Europe - Developed	18%
Europe - Emerging	16%
Other	10%
TOTAL	100.0%

My broker does offer its own portfolio analysis service so I have sent off for this report. Until this arrives the above list is a close enough guide.

I am happy to take a long-term view on emerging markets and Japan, but I think there may be better buying opportunities in the future. It looks from the breakdown that I am underweight in the UK and America.

A further analysis from BestInvest shows that my portfolio is split 63% in large companies, 24% in mid caps and 13% in small caps. I would usually think that the large cap figure is too high and more opportunities are likely to exist with smaller companies, but fund managers seem to have been moving into large caps over the last year as they were starting to look better value. I suspect this is why the weightings are as they are.

I now need to think which investments would be right for me at this stage. I am thinking about a focussed UK fund and possibly some directly held shares in a couple of UK companies. I’ll post my deliberations next time.