Portfolio .... break it down

Before next week, when I make my next selection, it seems to make sense to take a "strategic view" of the fund as it stands - in order to improve decision making going forwards.

Hargreaves Lansdown is good in this respect, as it has a fairly rudimentary portfolio analysis tool.  So what does it say?

The portfolio breaks down as follows between equities, funds and cash:

Funds           32.5%
UK Shares   33.4%
Cash             31.4%

So I realise I haven't spoken much about my cash holding on here to date.  I do have a substantial amount which I am holding back, on the basis that I still believe Europe is going to experience a shock event in the coming months.  Cash provides "optionality" - that is, it gives me the opportunity to do things.  I don't include it in my calculations at the moment, other than the interest it throws off, but this isn't a big concern for me right now - over time it will dimish as a portfolio constituent.  If that's not an approach you agree with, divide my dividend by two-thirds and my TER by two-thirds - frankly, the optionality is more important over the long term than the short term impact of the cash.

Industry Breakdown

A nice graphic here showing I am very much skewed towards consumers.  The financial services are my Aviva and IG Group holdings - not the banks (another bad week for those guys!)

	Consumer Services							28.3%
	Financials							16.3%
	Consumer Goods							15.0%
	Telecommunications							12.7%
	Health Care							8.6%
	Oil & Gas							6.0%
	Utilities							6.0%
	Basic Materials							3.9%
	Industrials							2.9%
	Technology							0.5%
	Non-Classified							0.2%

Market Capitalisation

Interesting breakdown here - for some reason I either hold very big companies or relatively small companies.  It would probably be worth reviewing how this sits alongside the FTSE at some point, although that's not a task for this evening.

	>£50bn	27.4%
	>£20bn and <£50bn	16.8%
	>£10bn and <£20bn	8.9%
	>£5bn and <£10bn	12.5%
	>£1bn and <£5bn	10.4%
	>£250m and <£1bn	6.9%
	<£250m	16.3%
	Unknown	0.8%

So what?

So what does this all mean?  I am heavily exposed to consumers, which might not be the best with a long period of sluggish growth coming up - although that said, a) I aim for companies that have exposure to as many markets as possible and b) we do live in a consumer society.  Buying shares in companies that sell things people need (soap) rather than want (foreign holidays) seems quite defensible to me. 

What does concern me is how low my exposure is to "technology", although if I dig into this what does it actually mean?  I am not too sure as the whole holding is via my SWIP All Share Tracker fund.   Really, this is an area I know and so should be able to make good decisions about.

A positive?  "Big" companies tend to be defensives because they sell things loads of people need - so having 44% of my shareholdings in companies in the top two categories seems like a positive to me.

Decision making

Being hard on myself, I really need to make sure that shares I buy as the work goes soggy sell things everyone needs, in as many places as possible.  What does this bring to mind?  The basics - soap, telecommunications (especially if they are selling TV which people will sit at home and watch), utilities, nice and cheap generic medicines - all that kind of thing. 

However, given I have a buy-and-hold-for-the-next-30-years strategy, I have the opportunity to be contrarian - maybe I should buy into something I know has long term value which other fund managers will be avoiding on the basis they know it is likely to ruin their next few quarter's performance figures.  Say.....oil rig manufacturers, shipping companies, PIIGS shares etc

Lots of options for the long term investor at the moment - I'll go through my short list and update you once the next purchase has happened.

Take care.