With Thomas Cook firmly in the news, you may well be wondering how this impacts upon your portfolio.
In order to diversify risk PortfolioSense invests globally, with only 36% of your growth assets being exposed to UK stocks (e.g. Portfolio 50’s UK market exposure would be just 18% of your overall holding), and this is done by investing in the full range of UK listed companies rather than by a process of stock-picking.
To put this into context, at the last evaluation in March 2019 less than 0.017% of the growth assets were exposed to Thomas Cook (so for example Portfolio 50’s exposure would have been around 0.008% of the overall holding), thereby meaning that your exposure would have been fractional. Furthermore, there was no exposure to any Thomas Cook bond issues within the defensive holdings, being excluded on the basis that they did not meet the quality requirements. *
Consequently, as was the case with the recent demise of BHS, the failure of Thomas Cook would not have even caused a ripple in your overall performance.
I trust that this allays any concerns that you may have had, of course if you have any further questions on this position please feel free to get in contact with me.
* This is consistent with our defensive asset class objective which is to dilute the volatility associated with the growth assets, doing so by focussing on high quality (and short-dated) bonds rather than holding lower quality bonds which may produce a higher yield but at the cost of taking greater risk.