We launched our discretionary fund management (DFM) portfolio at the beginning of 2021. After a promising start results performance has been poor over the last 6 months or so. Why is this?
Well, it has been a combination of the war in Ukraine, the cost of living crisis, supply chain issues, rising inflation, energy price increases, interest rates rising and so on. What has affected our performance more than most DFMs has been the effect of the technology market crash over the last 6 months in the US as represented by the NASDAQ. This has had a disproportionate effect on our DFM portfolio because we were invested 25% in the YFS Intelligent Wealth Fund which is, itself, invested 68% in technology stocks.
So what we have decided to do is simplify our strategy by investing in less funds, 7 as opposed to 15-18, and by concentrating on fewer sectors but the ones which, in our opinion, have the greatest prospects for growth over the next five years or more.
This is what our new discretionary fund management portfolio looks like.
Above allocation as at 09/06/2022
Source: Minerva Money Management
We have reduced the percentage invested in the YFS Intelligent Wealth Fund from 25% to 20%. We have doubled our investment in both gold and commodities because of their fine growth prospects. We have focused on investing in both UK and global equity income funds because our research shows that such funds have excellent long term returns. We have doubled our investment in commercial property funds, REITs because these specialist funds invest in the commercial property of the future.
We believe we are now invested in the sectors and the funds with the best growth prospects to emerge from today’s many economic challenges. We also expect reduced volatility.
We look forward to the future with confidence. So should you. You know it makes sense.*
*Risk warnings
The value of investments and the income derived from them may fall as well as rise. You may not get back what you invest. This communication is for general information only and is not intended to be individual advice. You are recommended to seek competent professional advice before taking any action. All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and HM Revenue and Customs practice. Levels and bases of tax relief are subject to change. This blog is based on my own observations and opinions.
