Fundsmith Equity and
Evenlode Global Income are two of Blair ’ s favourite funds in his model portfolios . While they have different holdings , they are both highly correlated so there is little benefit to rebalancing between the two .
“ We sit down with all our portfolios at the beginning of the year , take out a piece of paper and ask ourselves : ‘ If I were building a portfolio today , would I buy this fund ?’” he says . “ It ’ s really the fund selection that drives portfolio construction . Asset allocation is important , but it ’ s about how you are expressing that .” Blair agrees that people often tinker with their portfolios without changing them enough to make a significant difference : “ If I go underweight or overweight equities by 3 % more , it will rarely turn the dial in terms of performance .” He suggests you need to make significant changes with at least a five-year horizon in mind . An alternative option is to leave the rebalancing to the professionals . Holding a single multi-asset fund or investing in a model portfolio service through a financial adviser could ensure your portfolio remains on track . Just as there are some hobbyist mechanics who like to fix their car themselves , for most people it is best to leave it to the professionals .
Issue 93 - March 2023 / 15 /