Opinions - QL Freeway Splits?

[apple1]

Folks

About to invest a lump sum in QL as its sitting in a poorly performing deposit a/c. Have a long term view (min. 10yrs) and was thinking of the following split.

Euro 35%
US Free 15%
Latin Am 15%
Emerging 20%
China 15%

Rationale for above is primarily to diversify into different indices to spread risk. I see Euro & US to be relatively 'safe' & solid over long term, therefore half my investment in these two. The other 50% is split over three higher risk options but potentially offering higher returns. Would appreciate any feedback or opinions on this split. Thanks in advance, apple1

 

[PMU]

Would appreciate any feedback or opinions on this split. Thanks in advance, apple1

I think this is a reasonable allocation if you are not risk adverse and have a long investment horizon (but I would keep an eye on China). Personally, I would throw a bit into the UK Freeway (as I have) – good solid companies and exposure to international mining companies on the FTSE. Also, that way you would have exposure to EUR, USD and GBP denominated equities. You could consider re-balancing every year if any fund starts to deviate significantly from its initial allocation, and after say 5 years consider a re-allocation depending on your needs / risk profile, etc.

 

[apple1]

Thanks PMU.....sound advice. Will move some portion of the Euro allocation & some from the Emerging/China allocations towards UK. Makes sense in terms of a broadly balanced investment I think.

 

[thomsk]

Seems strange to me that you are putting 15% into US, when odds are so high that it is heading into recession??
Would have thought something like gold exposure would be more fitting.

 

[apple1]

Thomsk, my rationale for putting 15% into the US during troubled times is twofold:

1. I'd be buying in when the dollar is low and hoping to make a gain when the currency rises again

2. If as anticipated, the US remains depressed in the short term, I'd be buying in during a dip in the cycle and then hope to switch out when the situation improves.

Does this make sense to you or other posters? Appreciate any comment.

 

[bungaloid]

Thomsk, my rationale for putting 15% into the US during troubled times is twofold:

1. I'd be buying in when the dollar is low and hoping to make a gain when the currency rises again

2. If as anticipated, the US remains depressed in the short term, I'd be buying in during a dip in the cycle and then hope to switch out when the situation improves.

Does this make sense to you or other posters? Appreciate any comment.

We certainly live in interesting times. You are asked to justify allocating 15% of an equity portfolio to US. But no one bats an eyelid over your allocation of 50% to emerging economies.

Your future liabilities are probably in euro, so 35% is probably a minimum level for eur. Personally, I would keep 75% in euro/us.

Also you can look at an equity split by geography but also by industry. What do you think the right split between financials, technology, energy, commodity, telecom, consumer etc is? You might be surprised how different your portfolio looks on that basis. Recently a lot of people have discovered that the ISEQ is all about banks and building, for example.

Good luck!