I know (from reading the numerous posts on the subject on moneysavingexpert.com) that all the platforms are struggling with the volume of transfers at the moment. II is one of the better value flat rate services and so I appreciate that it is probably struggling more than most. I am (and I have been) prepared to wait but it is quite disconcerting to get an automated mail saying that your transfer is finalised, hold onto your hat, you'll be able to trade very soon, and then..... nothing.
However, in the meantime, I thought I should some concrete plans about what I'm actually going to do when the magic moment finally arrives.
My transfer will consist mainly of the CIS UK Growth Fund (around £40,000 on a good day) and a tiny bit of the CIS US Equities Fund (£70 - somehow a bit got left behind when I sold most of it a few years ago).
Due to the UK fund being by far my biggest holding my portfolio is very top-heavy in UK equities and I know that I need to rebalance. However I do need to watch out for dealing charges. Interactive Investor charge £10 per buy/sell but I will be credited with a total of £50 credit plus £20 cash when the transfer completes due to the quarterly credit plus transfer offer. So I will have £70 to spend over the next 3 months which also needs to cover 3 lots of monthly investments at £1.50 per line.
My first priority is to sell a good chunk of the CIS UK fund - I'm was thinking that I would sell £10,000 and redistribute it into my trackers as a start. So something like £3,000 into BlackRock Emerging Markets, £3,000 into HSBC FTSE 250 and £4,000 into HSBC European Tracker. Well at least this was my intention until I saw this:
(Telegraph 26 Oct 2013 - Dan Hyde)
This article has made me question my plans because it seems that (if the analysis is to be trusted) the areas in which I have already bought trackers are actually the areas where, if I'm going to use active funds at all, I should be using them. It seems that somehow I may have got it completely the wrong way round. Until you look at the effect of the fees of course :-)
One thing I can be clear on is that I do need to put a fair bit of money into the US as I have very little exposure to the US markets at the moment (around 4%). But this is such an expensive area as the S&P is soaring. I would be buying very high.
Perhaps a global tracker would be a better idea that a US specific fund at this point in time (I do also have an ex-UK tracker in my AVC fund). In this way I cover both the US and Europe and can beef up either/both when the markets fall a little. So I've decided to make the following buys:
- Vanguard Developed World ex-UK tracker - £5,000
I'm inclined to continue to cover Emerging markets with a mixture of active and passive
- BlackRock EM CIF - £1500
- Aberdeen Asian Smaller Companies - £1000
Europe is a bit of a biggie as I have very little invested here and according to the chart this is the one area where low cost active management (if you can find it) can really pay off. So my fourth buy will be a European investment trust (possibly property based) although I haven't done enough research to know which one as yet.
- European IT (tbc) - £1500.
This leaves me with £1000 to add to my regular £500 contribution this month and I so will invest £300 in each of the following:
Ishares Clean Energy
HSBC 250 Index
BG Shin Nippon
Total dealing charges: £56.50. This means that I will have £13.50 credit remaining for the rest of the quarter - I'm happy with that.
This is the plan. I just need to wait for my transfer to complete and then I can get on with it!