Charlie model portfolio - long-term growth, medium risk

Growth: Long term
Risk: Medium
Last updated: April 11, 2018

Who is it for

Investors looking to grow their capital over fifteen years or more, who are can afford to lose some of their capital under a worst case scenario.
It may suit investors with very young children seeking to build up capital via an ISA for their further education or to help them with a deposit for their first home.
Investors in their forties or younger who want to build up a nest egg or extra capital for when they retire may wish to consider this option.

Portfolio breakdown

Old Mutual Global Equity

'Follows the money' - uses a variety of investment styles and follow multiple themes to follow the outperforming parts of the market

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LF Miton UK Value Opportunities B Inst Acc

Invests in UK companies of all sizes which its managers believe are undervalued and likely to produce superior capital growth.

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Mercantile IT

Invests primarily in medium-sized companies that are constituents of the FTSE 250 index.

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Capital Gearing Trust

Heavily weighted to bonds, but is completely flexible in its asset allocation and has an absolute return objective.

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Baring Eastern

Remit does not include Japan but the tech bias of this fund should help it to deliver outperformance.

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Witan Investment Trust plc

Highly diversified global investment trust which uses the specialist skills of a range of external managers.

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LF Lindsell Train UK Equity

Invests in durable, cash-generative businesses and focuses on cash preservation, with an absolute return approach.

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Why these funds were selected

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Model Portfolio
Quarterly Review

Providing the portfolio with a solid base are three UK invested funds, with different approaches. Capital Gearing Trust is heavily weighted to bonds, but it is completely flexible in its asset allocation and has an absolute return objective. Mercantile IT is a good active fund that should outperform over a 15-year period. It focuses on medium-sized companies. CF Miton UK Value Opportunities aims to provide exposure to undervalued companies that produce strong growth, although we have reduced our holding because of a manager change, and added Lindsell Train UK Equity for its focus on strong household names.

The portfolio’s overseas exposure consisted of two globally invested funds, Ardevora Global Equity and Witan. However, Ardevora Global Equity was sold in June 2018 and replaced with Old Mutual Global Equity, which is more suitable for a longer-term portfolio. These provide both diversification and a spread of risk not just in terms of their geographical distribution but also due to their different investment approaches. And finally there is Baring Eastern. A tech bias has helped this fund perform impressively in recent years. The team invests with environmental, social and governance principles in mind.

Model Portfolio Charlie performance 30 Sept 2018

  Total return (%) over:          
  1 mth 6 mths 1 year 3 yrs 5 yrs Inception  
  % % % % % %
Charlie -1.6 6.3 7.5 41.2 62.0 106.0
FTSE All Share 0.7 8.3 5.9 38.5 43.5 84.6
FTSE UK Private Investor Growth 0.2 8.9 8.4 44.5 57.8 94.6

Timeline

2018

  • Sell
    ARDEVORA GLOBAL EQUITY
    June 2018

    Replaced by punchier Old Mutual Global Equity

  • Buy
    OLD MUTUAL GLOBAL EQUITY
    June 2018

    Aims to 'follow the money' so may be relatively sensitive to market movements and therefore well-suited to a longer-term portfolio

  • Sell
    HSBC FTSE ALL-SHARE INDEX FUND
    January 2018
  • Buy
    MERCANTILE IT
    January 2018

    This is a good active fund that invests in medium-sized companies and should outperform over 15 years

  • Sell
    STEWART ASIA PACIFIC LEADERS
    January 2018
  • Buy
    BARING EASTERN
    January 2018

    A tech helped this fund perform impressively in recent years.

2017

  • Sell
    KAMES ETHICAL CAUTIOUS MANAGED
    January 2017
  • Buy
    CAPITAL GEARING TRUST
    January 2017

    Heavily weighted to bonds, but it is completely flexible in its asset allocation and has an absolute return objective.

2016

  • Reduce
    CF MITON UK VALUE OPPORTUNITIES
    July 2016

    Holding reduced because of manager change.

  • Buy
    LINDSELL TRAIN UK EQUITY
    July 2016

    To gain from absolute return approach and focus on cash preservation in challenging times.

2015

  • Sell
    NEWTON REAL RETURN
    July 2015

    Pedestrian performance.

  • Buy
    KAMES ETHICAL CAUTIOUS MANAGED
    July 2015

    To gain from this fund's greater growth potential but still relatively low risk approach.

  • Sell
    LEGAL & GENERAL UK ALPHA
    January 2015

    Returns more erratic than expected.

  • Buy
    CF MITON UK VALUE OPPORTUNITIES
    January 2015

    To benefit from managers who have shown a talent for finding undervalued companies which produce strong growth.

2014

  • Sell
    MONKS
    October 2014

    Disappointing performance.

  • Buy
    ARDEVORA GLOBAL EQUITY
    October 2014

    To gain from fund's global mandate and the fact that it can invest for the long term but also sell stocks short in order to take advantage of falling values.

2012

  • Buy
    HSBC FTSE ALL-SHARE INDEX
    January 2012

    To provide broad exposure to UK companies of all sizes without manager risk.

  • Buy
    LEGAL & GENERAL UK ALPHA
    January 2012

    To gain exposure to undervalued, and potentially faster growing UK companies.

  • Buy
    MONKS
    January 2012

    To provide global exposure and benefit from the trust's significant exposure to Asia Pacific and Emerging Markets.

  • Buy
    NEWTON REAL RETURN
    January 2012

    To provide absolute returns in all market conditions.

  • Buy
    STEWART INV ASIA PACIFIC LEADERS
    January 2012

    To provide exposure to fast growing Pacific region via investment in large and mid-sized companies.

  • Buy
    WITAN
    January 2012

    To provide global diversification gained through fund of funds approach.