Important information: the value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

My once neat and tidy investment portfolio has been in need of a refresh for a while now.

From a simple and balanced starting point, I’ve made changes over time with funds and individual shares added at the margins. Gains for some assets and losses for others have warped the once-perfect diversification that I began with.

It’s time for a Spring Clean. Here’s how I will rationalise, prune and rebalance my portfolio for the new financial year ahead.

Portfolio X-Ray - getting under the skin of my investments

I like to think I have a pretty good idea of the progress my investments are making. I check in on them online a couple of times a week and am aware of my best and worst performers. However, even with that level of engagement I realise I could benefit from going deeper. I invest mostly via funds so it can be difficult to know immediately what my exposure to individual assets is, and where I may have a concentration of risk.

Up to now, the bulk of my money has been held in one fund - a large multi-asset fund which gives me exposure to both shares and bonds (on an 80/20 split) via low-cost passive funds, which follow an investment index. Beyond that I hold actively-managed funds for some alternative assets like infrastructure, gold miners, UK smaller companies and emerging markets. With the skill of an active manager, I give myself the chance of a better return than the index but this is far from certain.

Finally, I do hold a small number of individual shares as well - more of a toe-dipping exercise at this stage rather than something I expect to drive my returns overall.

To get a better understanding of what I’m holding I ran an ‘account holdings report’ through my Fidelity account. You can reach it via a tab within your account summary page.

Once you’ve selected a benchmark to compare your portfolio against you’ll be taken to an analysis report page. To view the full report you need to hit the ‘Export’ tab near the top right of the page to generate your Portfolio X-Ray report.

Your X-Ray report will, in a couple of pages, show you a detailed breakdown of your investments via geographical region, asset class, sector, style and more. For example, below is an image that shows a high-level breakdown of my portfolio.

pictorial presentation of high-level breakdown of my portfolio

The report also allows you to drill down another level and view the most significant holdings within the funds you invest in. Because I invest primarily via a large multi-asset fund, the largest holdings are themselves funds - ETF (exchange-traded funds) representing different assets.

screenshot shows the top ten largest holdings ordered by percentage weight of each asset

Using these two elements within the report, I am able to immediately spot some areas I would like to tweak. Firstly, the geographical breakdown shows me that I have most of my money held in the US market, but with a sizeable chunk in the UK too. The US exposure comes as no surprise - it’s the world’s largest stock market so is always likely to make up a significant chunk of a globally invested portfolio. The UK component, however, seems surprisingly large at above 20%. This is mostly due to a large UK exposure within my multi-asset fund.

The changes I’ll make

Running the X-Ray report has shown me that I need to reconfigure the geographical breakdown of my investments. But to do that I need to shift away from my inflexible multi-asset fund which decides for me where to invest and pick a selection of funds for myself instead.

Usefully, the X-Ray report also shows me a list of the ETFs I’m invested in, providing a good starting point for me to research a list of my own fund choices that I can mix into a portfolio that better suits me. I’ll stick with the same broad 80/20 split between shares and bonds but will dial back my UK exposure within the shares chunk to more like 5%, which is closer to the proportion of global markets the UK makes up.

I’ll redistribute that allocation to some areas that I feel are currently underrepresented. I’m happy to keep a large weighting to the main US market but will supplement this with some exposure to smaller companies, where valuations are lower, and towards some higher dividend paying companies. Europe is another area I’ll be adding to.

I’ll also take the opportunity to ditch my fund of gold miners and replace it with a physical gold ETF which better tracks the gold price.

Lower charges - an added boost

Another happy consequence of my rebalancing could be lower overall fund costs. I plan to sell out of my multi-asset fund where the charge was 0.22% and instead create a portfolio comprising several funds and ETFs where charges will tend to be lower. For example, I could choose to gain exposure to the US market via an ETF costing just 0.07%. They won’t be all that cheap but I’m confident I will be able to shave off 0.1 percentage points from my costs each year.

The trade-off is that I will need to rebalance my investments myself to keep the overall mix I want. I’ll do this twice a year - a job I’m happy to take on.

A further benefit is that Fidelity’s platform pricing can be lower for portfolios of ETFs (and also investment trusts and shares). The usual 0.35% platform cost (or 0.20% for larger portfolios) is capped at £90 on the ETF/shares/investment trust element.

Even if you think you know your portfolio inside out, running the rule over it every so often can be a valuable exercise. If you invest via the Fidelity platform, give the X-Ray tool a try for yourself. For those with portfolios exceeding £250,000, you will have access to a Relationship Manager, included in our service. They can show you how to use the X-Ray tool and talk to you about your portfolio composition.

  • If you would like more detailed help with your portfolio, find out more about our financial advice service: request a callback .

Important information- investors should note that the views expressed may no longer be current and may have already been acted upon. Overseas investments will be affected by movements in currency exchange rates. Investments in emerging markets can be more volatile than other more developed markets. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.

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