Portfolio Fund Assistance

Prism wrote: »

The only other things you are missing is a smaller companies fund and/or an EM fund if you fancy a bit more risk. I can tell you which ones I have so you can research them yourself:

[Lists the smaller companies and/or EM funds that he has]

DennisTenus wrote: »

Sorry silly question probably but do your suggestions cover smaller companies and EM fund?

Yes, silly question. that's exactly why he listed them...

Not sure what EM fund is btw?

Emerging markets ; as opposed to countries with developed markets

If you don't really know what you're doing with this sort of stuff, there's no shame in recognising that and just putting more money into the VLS80 which covers the larger companies in broad global markets (including emerging markets). The emerging markets content of the equities within your VLS80 is about 7.5% of the equities you have in that fund. However, as you've added other funds such as Fundsmith and the Japan one on the side - which only have companies in developed markets - you will have diluted down the EM content of the overall portfolio. If you buy more VLS80, you will increase it again (as well as also increasing bond content, reducing volatility).

By having your money in a fund such as VLS80 which allocates it to equities in all major regions (US, UK, Europe, Japan, other developed Asia-Pacific, emerging markets) and across asset classes (equities, government bonds, index linked government bonds, corporate bonds) it is like a ready-made portfolio all within one holding, right off the shelf. It covers the basic major areas you would want, and is far better than not investing at all.

If you are going to decide that instead of VLS80 being your whole portfolio, you are going to leave space in the £70k total to add other things on top of that (i.e., dilute the VLS80 holding with other stuff), you should probably aim for that 'other stuff' to be areas that VLS80 does not cover. Rather than duplicating the stuff it already covers, or giving more exposure to a particular country or company type.

The only reason really to add extra funds around the side of the VLS80 in a 'core and satellite' or 'hub and spoke' style, would be if you decide there are other asset classes or global regions or company types which are particularly under-bought by your generalist VLS80 fund, compared to what you want. If that is your goal, you could leave room in the £70k to accommodate them while having VLS80 be the core of your holdings, with the additional holdings just providing little tweaks to tilt the overall portfolio to whatever you like.

However, to be frank, it sounds like you don't really know what portfolio you want to create and are just reaching out to us for ideas of what you might like to use to create a portfolio you might like. That is a bonkers way of allocating capital. You are just as likely to do harm than good, when messing with the allocations Vanguard gave you.

The VLS series of funds is designed to be a whole portfolio of developed and emerging markets equities and bonds right off the shelf ; you could use it for an entire portfolio, or more experienced investors might want to complement it with something and add their own slant, if they know what it is they want to do and why they want to slant the portfolio in a particular direction. Likewise, the Fundsmith fund is designed to be a general global developed markets100% equities fund, leaving you to just add a few other things to balance out your overall asset allocation to what you want. The idea of buying VLS80, but then also adding Fundsmith, and then adding more Japan, and then going online and asking everyone around what extra funds they would fancy adding, seems like a mess.

You don't need a portfolio designed by a committee of forum members with their own tastes and preferences and no vested interest in your actual goals and needs. You just need to buy something simple that isn't too risky/volatile for what you can handle. You can do that by buying VLS or one of their rivals, or by doing a lot more research and creating something uniquely custom just for you.

With your level of experience it's unlikely you need something uniquely custom just for you. Following that path will just tempt you into doing things you should avoid - like trying to copy what other people with different levels of experience or risk tolerance have done, or just buying funds to stuff into your portfolio because they look nice in the performance charts due to having a high return in the last five to eight years when markets were rising rapidly.