Long-term Investment Portfolio - Part 1

In this blogpost, I will go through my Investment Portfolio, focusing on Index Funds. As a long-term investor, my aim is to preserve and grow the real value of my assets. World's most renowned investors, including Howard Marks & Warren Buffett, suggest low-cost tracker (Index) funds as a best for retail investors to invest their money in. These funds should be used for a long-term investment (5-10 years) and not advised to do short term trade in and out.

Most of the below funds are available as an either income or accumulation share class for the UK investors. Furthermore, most of the funds are also available with another layer of discounts as some of the investment platforms have negotiated further discounts on already low-cost ongoing charges (OCF).

1. BlackRock Corporate Bond Tracker Fund

This is a low cost tracker fund which tracks the performance of the Markit iBoxx GBP Non-Gilts Overall TR Index. The OCF for the fund for a retail investor is 0.16%. The fund is currently yielding just above 3% and gives a good exposure to world's corporate bond market.

2. Legal and General European Index

Legal and General Investment Management has done a great job of providing very low cost index funds across the major investment sectors. This is an Equity index fund tracking the performance of the FTSE World Europe (excluding UK) Index. The Index consists of a broad spectrum of European companies and currently advertised at OCF of 0.12%.

3. Legal and General UK 100 Index Trust

It is a well known fact that most of the investors have a home bias when it comes to investing their savings. Being aware of that and also knowing that a few of my individual stock investments are within FTSE 100 companies, I have a minor portfolio holding in this fund.

4. HSBC FTSE 250 Index

Again, this is one of my smaller portfolio holding. This fund provides tracking of FTSE 250 Index and has OCF of 0.18%.

5. Legal and General US Index

This fund replicates the performance of FTSE USA Index. This index has a few more companies compared to SP 500 index. For the UK retail investor, I found that this fund provides the lowest OCF compared to an SP 500 index fund and hence I have selected this fund over an SP fund.

I do not have any emerging market index tracker funds. There are few reasons behind this as I think most of the emerging market indices do not correctly represent emerging or developing markets. The second reason is that I do not believe that those markets are efficient or free from inside trading.

I hope the above list will give you a good starting point to start constructing a balanced portfolio and than add an active investment funds. It is possible to reduce the number of Equity Index funds from four to a single fund by investing in an International Index Trust if you do not want to allocate your funds to these individual funds.

I will write a separate blog featuring my investments in Active Mutual Funds.

Important Information: I do not give investment advice so you need to decide if an investment is suitable for you. If you are unsure whether to invest, you should contact a financial adviser.