Foxtrot model portfolio - long-term growth, higher risk

Growth: Long term
Risk: Higher
Last updated: April 12, 2018

Who is it for

Investors looking to grow their capital over at least ten to fifteen years, who have other secure savings, and can afford to lose a significant portion of this capital under a worst case scenario.
Could be considered by investors wishing to accumulate a nest egg for grandchildren via a JISA.
Investors in their early fifties with adequate pension provision who want to make extra savings for their retirement in an ISA.

Portfolio breakdown

Baring Eastern

Invests in shares of next generation of companies emerging across Asia.

Seneca Global Income & Growth IT

Targets total return and is cautious in its asset allocation and has a manageable premium.

Scottish Mortgage

Managers look for inspirationally managed companies with strong competitive advantages and radical growth opportunities.

Old Mutual UK Mid Cap

Takes a flexible approach through the economic cycle.

Miton UK Micro Cap IT

Has majority of its assets (valued at just £114 million to make it very nimble) in companies listed on Aim and holds more than 100 companies.

Standard Life Investments Global Smaller Companies

Replaces Old Mutual Global Equity which is more sensitive to market movements

Pantheon International

A fund of private equity funds which provides exposure to private companies globally.

Why these funds were selected

Over the long term, small and medium-sized companies have traditionally outperformed larger ones. Therefore the UK exposure of this portfolio is focused on these areas. It consists of the Old Mutual UK Mid Cap fund which replaces the HSBC FTSE 250 Index which had been in the portfolio since inception. The active fund's performance has been far superior to the tracker, returning 184 per cent over five years compared to 105 per cent for the tracker. Miton UK MicroCap Trust is managed by the highly experienced Gervais Williams and Martin Turner with most of its assets invested in Aim and valued at just £114 million, it is a nimble operator.

Old Mutual Global Equity provides broad exposure to international markets but its sensitivity to market movements led to it being replaced by Standard Life Investments Global Smaller Companies in June 2018. Seneca Global Income & Growth targets total return and is cautious in its asset allocation.

The other three holdings are focused on more specialist areas which we believe have long term potential. Pantheon International invests globally in private companies in various industries through other private equity funds. Scottish Mortgage has had an excellent run of performance but we believe that its increasing investment in unquoted companies, its exposure to emerging markets and emphasis on disruptive technologies will stand it in good stead. BlackRock World Mining has been replaced by Scottish Oriental Smaller Companies trust, which in turn has been replaced by Baring Eastern. Baring Eastern aims for long-term growth from investing in the Asian Pacific region.

Model Portfolio Foxtrot performance 31 July 2018

  Total return (%) over:          
  1 mth 6 mths 1 year 3 yrs 5 yrs Inception  
  % % % % % %
Foxtrot 0.5 4.9 12.2 51.9 74.5 127.6
FTSE All Share 1.3 5.0 9.2 30.2 44.9 88.5
FTSE UK Private Investor Growth 0.1 0.9 7.1 34.6 57.8 89.1

 

Timeline

2018

  • Buy
    STANDARD LIFE INVESTMENTS GLOBAL SMALLER COMPANIES
    June 2018

    Replaces the riskier Old Mutual Global Equity

  • Sell
    OLD MUTUAL GLOBAL EQUITY
    June 2018

    Aims "to follow the money" so too sensitive to market movements

  • Buy
    BARING EASTERN
    April 2018

    More focused on 'new Asia' companies so should provide more of a kick to returns than Scottish Oriental Smaller Cos.

  • Sell
    SCOTTISH ORIENTAL SMALLER COMPANIES
    April 2018

    Capital preservation focus is not ideal for a higher-risk portfolio and has meant it has lagged peers, so has been replaced with Baring Eastern.

  • Sell
    RIT CAPITAL PARTNERS
    January 2018
  • Buy
    SENECA GLOBAL INCOME & GROWTH
    January 2018

    Targets total return and its shares trade at a manageable premium.

  • Sell
    MARLBOROUGH UK MICRO CAP GROWTH FUND
    January 2018
  • Buy
    MITON UK MICROCAP TRUST
    January 2018

    With asset of just £114 million, this is a nimble trust mostly invested in the Aim market.

2017

  • Sell
    BLACKROCK WORLD MINING IT
    July 2017
  • Buy
    SCOTTISH ORIENTAL SMALLER COMPANIES
    July 2017

    The trust focuses on companies with a market capitalisation of less than £1 billion and its biggest weightings are in consumer stocks.

  • Sell
    HSBC FTSE 250 INDEX
    July 2017
  • Buy
    OLD MUTUAL UK MID CAP
    July 2017

    The active fund's performance has been far superior to the tracker fund, with returns of 184 per cent versus 105 per cent over five years.

  • Sell
    HERALD INVESTMENT TRUST
    January 2017
  • Buy
    SCOTTISH MORTGAGE INVESTMENT TRUST
    January 2017

    We believe that its increasing investment in unquoted companies, its exposure to emerging markets and emphasis on disruptive technologies will stand it in good stead.

  • Sell
    CALEDONIA INVESTMENTS
    January 2017
  • Buy
    RIT CAPITAL PARTNERS
    January 2017

    We believe this trust will be a good core holding for the higher risk portfolios.

2016

  • Sell
    JPMORGAN GLOBAL EMERGING MARKETS INCOME
    January 2016

    Poor performance and lack of a meaningful recovery in sight.

  • Buy
    OLD MUTUAL GLOBAL EQUITY
    January 2016

    To provide greater diversity and opportunities for growth through a fund which has no style bias and takes advantage of rising share prices wherever it finds them.

2014

  • Sell
    MONKS
    October 2014

    Disappointing performance.

  • Buy
    CALEDONIA INVESTMENTS
    October 2014

    To gain from global exposure, high discount to NAV and significant exposure to unquoted companies.

  • Sell
    TEMPLETON EMERGING MARKETS
    April 2014

    Disappointing performance.

  • Buy
    JPMORGAN GLOBAL EMERGING MARKETS INCOME
    April 2014

    To maintain exposure to emerging markets but through a trust which invests in stable companies that pay a growing dividend which can be reinvested by growth investors.

  • Sell
    M&G GLOBAL BASICS
    January 2014

    Disappointing performance and change of manager.

  • Buy
    BLACKROCK WORLD MINING
    January 2014

    To benefit from the potential turnaround in resources sector as demand recovers.

2012

  • Buy
    HERALD INVESTMENT TRUST
    January 2012

    To provide global exposure to smaller quoted TMT companies.

  • Buy
    HSBC FTSE 250 INDEX
    January 2012

    Tracks the performance of the UK's 250 medium sized companies ranking behind the 100 largest.

  • Buy
    M&G GLOBAL BASICS
    January 2012

    Provides exposure to manufacturing and commodity companies worldwide.

  • Buy
    MARLBOROUGH UK MICRO CAP GROWTH
    January 2012

    To gain exposure to the UK's smallest companies with growth potential.

  • Buy
    MONKS
    January 2012

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

  • Buy
    PANTHEON INTERNATIONAL
    January 2012

    To benefit from the potentially strong growth potential offered byinvestment in private companies through this fund of private equity funds.

  • Buy
    TEMPLETON EMERGING MARKETS
    January 2012

    To gain from the faster growth of the world's emerging economies.