Question: I have started investing in Platinum International Fund and have a few international ETFs, like VTS and VEU. Should I stick to just one fund or is it good to have mix – like having equal investments in Platinum or Magellan Global Fund? Or should I have a mix of ETF/funds as a long-term investment buy-and-hold strategy. I guess the issue is the fees.
Answer (By Paul Rickard): It sounds like you are pretty much on the right track. You have taken a mix of passive funds (through the ETFs which give broad market exposure to the US and the rest of the world), and potentially, specialist active funds through Platinum and Magellan, which will be more focussed on stock selection.
With the active managers, I think spreading your investment reduces some of the “manager” risk – it is a diversification strategy.
Clearly, whether you can afford to have this mix depends on the size of your investment in offshore funds, and any resultant transaction costs.
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