Investment option somewhere between shares tracker and savings account

WobblyDog
WobblyDog Posts: 512 Forumite
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edited 18 October 2017 at 4:20PM in Savings & investments
I'm looking for an investment option somewhere between a shares tracker and a savings account. My current situation:

- 1.5 times gross salary in savings accounts earning 1% interest
- 2 times gross salary in FTSE All Share tracker ISA
- 4 times gross salary in DC pension (and I'm feeding 50% of gross salary in via salary sacrifice each year). It's a fairly well diversified default fund.
- Own house, no debts. Hoping to retire in 7 years, probably no major expenditure before then.

I'm wondering whether I should continue feeding my excess cash into my savings accounts and the FTSE tracker, or is there another product I could consider? I'm nervous about putting too much money in the FTSE tracker, but the interest rate on savings accounts is derisory.

Comments

  • grandst
    grandst Posts: 38 Forumite
    Vanguard lifestrategy or Legal and General multi index are far better than a Uk tracker as they are diversified around the globe. Something with a risk level roughly half way between cash and shares would be multi-index 5 or lifestrategy 60.
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    Yep my immediate thought was ditch the FTSE100 tracker and put it in a worldwide tracker. Doesn’t have t9 be VLS there are many others. In the FTSE you are in reality investing in oniy about 20 companies in just a handful of industries.
  • bigadaj
    bigadaj Posts: 11,531 Forumite
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    For diversification then p2p or even vct may be of interest, though may be above your risk tolerance.
  • Apodemus
    Apodemus Posts: 3,384 Forumite
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    AnotherJoe wrote: »
    Yep my immediate thought was ditch the FTSE100 tracker and put it in a worldwide tracker. Doesn’t have t9 be VLS there are many others. In the FTSE you are in reality investing in oniy about 20 companies in just a handful of industries.

    It’s the FTSE All Share Indes that the OP says he is tracking, not FT100. Still capitalisation weighted, so the top companies represent a large component, but a bit wider than just FT100.
  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
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    Apodemus wrote: »
    It’s the FTSE All Share Indes that the OP says he is tracking, not FT100. Still capitalisation weighted, so the top companies represent a large component, but a bit wider than just FT100.

    Yes, "a bit" but over 80% of its money is invested in the FTSE 100 with a massive weighting to the very biggest ones by market capitalisation so it is a really poor way of investing several multiples of your annual salary. There are entire industries missing not to mention the over 95% of companies by market value which are listed on a stock exchange other than the London one.
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,594 Ambassador
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    I would look to diversify further by investing globally rather than just the FTSE.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • Tom99
    Tom99 Posts: 5,371 Forumite
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    [FONT=Verdana, sans-serif]If you want something between a index tracker and a savings account I think your only option is to split your investment into those two products.[/FONT]
    [FONT=Verdana, sans-serif]Most lower volatility/risk funds invest part of the non equity element in bonds and my view is that in the short/medium term bond yields will go up and prices down.[/FONT]
    [FONT=Verdana, sans-serif]I split my UK equities into a FTSE100 fund and a FTSE250 fund. The reason being that I think, maybe incorrectly, that a FTSE All Share fund still focuses to much on the top 10 in the FTSE100.[/FONT]
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    Apodemus wrote: »
    It’s the FTSE All Share Indes that the OP says he is tracking, not FT100. Still capitalisation weighted, so the top companies represent a large component, but a bit wider than just FT100.
    Fair enough I thought it was 100 not A but I’d still say the same thing, dump it and go global.
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    You could try those investment trusts intended to preserve your capital rather than necessarily grow it. Personal Assets Trust and Ruffer Investment Company are the two I look at. Visit their websites and read some of their reports/reviews.
    Free the dunston one next time too.
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
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    If you can reinvest interest for 10 years think about an intermediate term bond index tracker.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
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