My £25,000 Investment Portfolio: The Good, The Bad and The Ugly
This blog contains an affiliate link to Trading 212 which would mean both you and I would receive a free share up to the value of £100 if you were to sign up and invest £1 or more – see end.
Firstly, let me be really clear that I am not a financial professional or even an experienced investor. Sharing my portfolio is as much about sharing my learnings and mistakes as it is my wins. I hope it will be useful to anybody starting out on their investment journey or at a similar stage to me. As I haven’t yet sold any investments since starting out, my mistakes are still all there for everybody to see. This has resulted in a messy mishmash of successful stalwarts and abandoned experiments. Almost everything is up since I purchased it, but I’m also conscious that it’s not optimised for growth and there’s fair bit of duplication. Over the last year or so I have moved towards more sustainability-focussed investments, but there is still lots of scope to improve.
My Investment Journey
I opened my account with interactive investor (ii) four years ago. Over that time we’ve bought a house and I’ve been on two maternity leaves, so I haven’t had a lot of spare cash to invest. It’s really only the last year that I’ve come anywhere close to using up my ISA allowance, as you can see below.
Over that time I’ve been learning about investing and experimenting. It took about a year for me to see gains, and now I’m at the stage where I’m almost always in the green (meaning I haven’t lost any money on an investment) even when there have been significant market dips in 2020 and now.
My portfolio is currently worth about £26,000 today, and was worth almost £30,000 before this current dip. Up until this year I put about £250 a month into my investments and any windfalls (like a bonus or inheritance). I then stopped paying down the mortgage on our rental property and put our income from that into investments, which added another £1000 a month. As we are living an even more frugal lifestyle now with no commuting costs or holidays etc I am now budgeting so that we can invest the full lSA allowance a month (£1600) so that we can hopefully use up my allowance next year.
Here is my portfolio as it stands:
|Symbol||Description||Market Value||Book Cost||Gain %|
|B64TS99||FIRST SENTIER INVRS (UK) FDS LTD STEWART INVR GBL EMG MKTS SUST B GBP ACC||£338.90||£300.00||12.97%|
|BF0V6P4||FUNDSMITH LLP SUSTAINABLE EQUITY ACC||£680.85||£674.97||0.87%|
|IEM.L||IMPAX ENVIRONMENTAL MARKETS ORD GBP0.10||£677.35||£636.83||6.36%|
|INRG.L||ISHARES II PLC GLOBAL CLEAN ENERGY UCITS ETF GBP DIST||£4,651.00||£2,729.26||70.41%|
|IESG.L||ISHARES II PLC MSCI EUROPE SRI UCITS ETF EUR (ACC) GBP||£4,037.04||£3,693.39||9.30%|
|CUKX.L||ISHARES VII PLC CORE FTSE 100 UCITS ETF GBP (ACC)||£912.48||£894.71||1.99%|
|SMT.L||SCOTTISH MORTGAGE INV TRUST ORD GBP0.05||£3,886.08||£2,608.43||48.98%|
|ZPRP.XE||SSGA SPDR ETFS EUROPE I PLC FTSE EPRA NAR D EU XUK INDEX UCITS ETF||£1,514.78||€1,643.11||7.65%|
|BKV0VZ0||VANGUARD INVESTMENT SERIES ESG EMG MKTS ALL CAP EQTY IDX GBP ACC||£2,188.02||£2,198.11||-0.46%|
|B4NXY34||VANGUARD INVESTMENTS UK LTD LIFESTRATEGY 20 % EQTY A GBP GROSS ACC||£4,437.28||£4,173.02||6.33%|
|B3TYHH9||VANGUARD INVESTMENTS UK LTD LIFESTRATEGY 60 PERCENTAGE EQTY ACC NAV||£2,968.85||£2,755.10||7.76%|
Why I chose the investments I did
When I started investing in 2017 I had heard ETFs were a “safe” option and had also heard good things about the Vanguard Life Strategy Funds. I liked the fact that they controlled the balance of stocks and bonds for you. A family friend had recommended investing in renewable energy so I chose an ETF in this area (iShares Global Clean Energy) as well as a FTSE 100 ETF. As Brexit was looming, I thought that European real estate may be boosted as UK-headquartered global companies moved their offices to Europe, so I also bought an ETF with this focus.
Later on I heard about the Scottish Mortgage Investment Trust, which has a heavy technology focus, so I started to invest into that to diversify my industry focus. After some time both the Scottish Mortgage fund and iShares Global Clean Energy started to do consistently well so I started investing in them whenever I had something to deposit. I’ve also kept investing regularly in the Life Strategy funds.
More recently I’ve been exploring other options that have a sustainability or ESG focus. Interactive Investor has some interesting recommendations in terms of a ESG portfolio so I picked three recommendations from there. They are all actively managed funds with relatively high management costs:
FIRST SENTIER INVRS (UK) FDS LTD STEWART INVR GBL EMG MKTS SUST B GBP ACC
- This has an emerging markets focus and its approach is to exclude companies that do not meet its criteria for sustainability
FUNDSMITH LLP SUSTAINABLE EQUITY ACC
- As above, but with a US/Eurozone/UK
IMPAX ENVIRONMENTAL MARKETS ORD GBP0.10
- A global environmental investment trust focussed on environmental solutions. This is a dividend paying trust.
After some time I decided to stop investing in the top two and to continue with the Impax fund as I like the approach of investing in companies that are helping to reduce climate change rather than just excluding the environmental or social “villains”.
Using ii’s x-ray analysis tool I saw my portfolio was very weighted towards the US and UK and was also conscious that there was more growth potential in emerging markets. I was looking for a low costs ESG ETF with an emerging markets focus that I could start investing in regularly, and luckily Vanguard has recently released an all-cap emerging markets ESG ETF with a management fee of 0.25% which I’ve started investing in regularly.
My learnings and plans for the future
As I said at the beginning, I am not an investing expert but I have learnt enough over the last few years to be able to look at my portfolio critically and “correct” some of the mistakes I’ve made.
I have no idea why I chose to invest in two different Vanguard Life Strategy funds (20% equity and 60% equity) three years ago rather than just go for one at a balance I was comfortable with (40%). I suspect it’s because I felt more funds was more diversification and I didn’t know much about other options. Now when I look at my overall bond allocation in my portfolio I see that it’s 20% which is relatively high for the accumulation stage of investing. As a general rule, bonds are seen as “safer” than stocks/equities but will usually grow less.
I plan to divest one of the Life Strategy funds and to either put the money into the other one or another fund entirely. At this stage I would be happy with 5-10% bonds.
To streamline my “sustainable” investments I am also planning to divest my two ESG actively managed funds (First Sentier and Fundsmith) and funnel that money into Impax, the Vanguard emerging markets ESG ETF and/or the iShares ESF ETF.
Here are my plans for the portfolio for next year and my rationale.
|FIRST SENTIER INVRS (UK) FDS LTD STEWART INVR GBL EMG MKTS SUST B GBP ACC||Divest||Duplication of focus with Vanguard ESG ETF and high management costs|
|FUNDSMITH LLP SUSTAINABLE EQUITY ACC||Divest||Duplication of focus with iShares ESG and high management costs|
|IMPAX ENVIRONMENTAL MARKETS ORD GBP0.10||Keep investing||Like focus on environmental solutions and strong performance. Pays a dividend.|
|ISHARES II PLC GLOBAL CLEAN ENERGY UCITS ETF GBP DIST||Keep investing||Excellent performance and like the clean energy focus. Pays a dividend.|
|ISHARES II PLC MSCI EUROPE SRI UCITS ETF EUR (ACC) GBP||Keep investing||Is a nice “general” ESG global ETF with reasonable management costs. You can’t do “free regular investing” with this one, but will use some of my free trading credit on this|
|ISHARES VII PLC CORE FTSE 100 UCITS ETF GBP (ACC)||Keep and hold||Will keep this for the moment for diversification (it’s my main UK-focussed fund), It seems to do well when other ones are struggling and vice versa.|
|SCOTTISH MORTGAGE INV TRUST ORD GBP0.05||Keep investing||Really strong performing technology-focussed fund paying dividends.|
|SSGA SPDR ETFS EUROPE I PLC FTSE EPRA NAR D EU XUK INDEX UCITS ETF||Keep and hold||Will keep for diversification (Euro real estate focus) but not planning to invest more for the moment|
|VANGUARD INVESTMENT SERIES ESG EMG MKTS ALL CAP EQTY IDX GBP ACC||Keep investing||Low cost emerging markets ESG focus.|
|VANGUARD INVESTMENTS UK LTD LIFESTRATEGY 20 % EQTY A GBP GROSS ACC||Divest||Plan to invest based on duplication with the Life Strategy 60%. It’s also really raising my bond ratio.|
|VANGUARD INVESTMENTS UK LTD LIFESTRATEGY 60 PERCENTAGE EQTY ACC NAV||Keep investing||Will keep investing for the moment for diversification (bonds). It’s been a good stalwart in my portfolio from the start but I may look for a more ESG-friendly alternative.|
I realise I have a lot to learn about investing and am very open to suggestions or questions. I hope this is interesting to anybody else building up their own portfolio and trying to increase their sustainable investments.
Most if not all of these products are also available on Trading 212. If you are interested in opening a Trading 212 and getting a free share up to the value of £100, I would appreciate it if you would use my link (affiliate link). I also have a friend’s referral for ii which means the first year of management costs are waived (worth £120) so let me know in the comments if you’d like that.