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  • FIRST POST
    • Drucifer
    • By Drucifer 16th Jul 17, 12:15 PM
    • 6Posts
    • 7Thanks
    Drucifer
    New Investor: VLS 100?
    • #1
    • 16th Jul 17, 12:15 PM
    New Investor: VLS 100? 16th Jul 17 at 12:15 PM
    Hello,

    A little history about myself before I ask my question. I'm 27 years old, I've recently purchased a home with my fiance, I knew prior to this investing wasn't really an option as it was a short term goal and I needed access to the money. I've also got an emergency fund, enough to cover 7.5 months worth of bills in the event I lose my job. No debts (except mortgage) and I've sold my car.

    Now that I've secured buying a home & dealt with all my short term goals, I'd like to focus on the long term, as I'm a strong believer in having plans and following them through, I believe everyone should have a direction/destination to go. I realise that my actions now will determine how I live in the future, so I'd appreciate the wisdom of people that know better or have had the experience.

    Seeing that I'm new to investing my knowledge on the subject is limited, from what I've been reading, most people suggest a "Fund and Forget" type of strategy for newbies, the VLS 100 has caught my attention as it is already diversified for me, I'm also happy to take the risk. At this moment in time it makes sense to me to go for this, as buying individual stocks or day trading seems far out of my depth.

    I've "only" £5,000.00 spare (I say only because to me it's a lot to have, but it doesn't feel like a lot to invest), should I drip feed or lump sum this amount into the VLS 100? Is the VLS 100 even my best option here?

    My goal with this by the way is to, aswell as my pension, fund my retirement, so this'll be the start of at least 40 years of investing.

    At retirement I feel comfortable with the idea of having a home to sell to downsize (if necessary) a pension pot and an investment pot, is this a sensible approach for the future?
    Last edited by Drucifer; 16-07-2017 at 12:21 PM.
Page 2
    • fwor
    • By fwor 17th Jul 17, 11:35 PM
    • 5,833 Posts
    • 3,861 Thanks
    fwor
    No, the us represent maybe 55% of the world equity market, if you invested according to economy size you'd have most of your money in government bonds.
    Originally posted by bigadaj
    However it's defined, having over 50% of your equity investments based in the US seems to me to be disproportionate. But others may think it's fine.

    To be honest, I don't know ~exactly~ what my regional allocations are, but I currently use VLS60, L&G MI6 and HSBC Global Strategy Balanced in roughly equal proportions.

    I won't pretend that the proportions are anything more accurate than rough approximations of what I feel is about right - because I've never felt that there is any point in being too precise about these things.
    • Drucifer
    • By Drucifer 17th Jul 17, 11:37 PM
    • 6 Posts
    • 7 Thanks
    Drucifer
    Why would you do that in future as individual shares are much more risky than 100% equities in a diversified VLS100. Maybe look at single sector funds in future to build up a portfolio but not individual shares in my opinion.
    Originally posted by Audaxer
    Up until you mentioned it I wasn't even aware that you could invest in a single particular sector, but I'm here to learn and I'm very glad you made me aware of that, further reading for me to do, not that I'll be implementing it anytime soon, but it's great to know the options.
    • moxter
    • By moxter 18th Jul 17, 12:08 AM
    • 89 Posts
    • 92 Thanks
    moxter
    I've no desire to be filthy rich
    Originally posted by Drucifer
    This is a pedant's point, but even if you did, it shouldn't affect your decision, unless you were happy to say "I desire to be filthy rich and would like to take a punt at becomign filthy rish whilst understanding that there's a significant chance that I won't end up rich at all". What you want to do is give yourself the best chance of being as wealthy as you can, in years to come. If you're disciplined enough to leave the money alone, then pure equity may be fine. But there are a lot of things you might want that £5k (or other money) for. What happens if you suddenly need money for (some/all of these may not apply in your case) a marriage, a child, twins, a divorce, a debilitating illness to you, ditto for a partner, ditto for a parent, a new car, a big emergency plumbing job, the roof falling in, a course of damp, school fees, a house extension, a deposit for a house, upsizing, an expensive holiday, losing your job. If at that time your money ploughed into shares has had a slide - let's say your £5k which has now turned into £3k - and you decide to take it out to pay for whichever of those things you need (or don't need, but want)? That's £3k for you, and £2k tossed into the wind. It needs iron determiniation not to touch it.

    The state pension will never disappear altogether if only because politicians know how valuable the grey vote is.
    • A_T
    • By A_T 18th Jul 17, 7:47 AM
    • 105 Posts
    • 37 Thanks
    A_T
    However it's defined, having over 50% of your equity investments based in the US seems to me to be disproportionate. But others may think it's fine.

    To be honest, I don't know ~exactly~ what my regional allocations are, but I currently use VLS60, L&G MI6 and HSBC Global Strategy Balanced in roughly equal proportions.

    I won't pretend that the proportions are anything more accurate than rough approximations of what I feel is about right - because I've never felt that there is any point in being too precise about these things.
    Originally posted by fwor
    I'm interested in the HSBC Global Strategy funds. But the amount in these funds is comparitviely very small - 5 figures. Should this be a concern?
    • AnotherJoe
    • By AnotherJoe 18th Jul 17, 8:13 AM
    • 6,803 Posts
    • 7,226 Thanks
    AnotherJoe
    I'm interested in the HSBC Global Strategy funds. But the amount in these funds is comparitviely very small - 5 figures. Should this be a concern?
    Originally posted by A_T
    5 figures would be between £10k and £100k ???
    Looking on HL for HMWO it's £252Million USD which is a tadge above about £200M I'd guess. Nine figures.
    Last edited by AnotherJoe; 18-07-2017 at 8:26 AM.
    • bowlhead99
    • By bowlhead99 18th Jul 17, 8:24 AM
    • 6,470 Posts
    • 11,440 Thanks
    bowlhead99
    I'm interested in the HSBC Global Strategy funds. But the amount in these funds is comparitviely very small - 5 figures. Should this be a concern?
    Originally posted by A_T
    Yes, that's a concern.

    The concern is that if you are reading reports and factsheets where figures are in thousands and you are assuming they are in pounds because you haven't read them properly, what else are you missing?

    Per the factsheets for Dynamic, Cautious and Balanced:
    Latest NAV date 17-July-2017
    AUM 53,467,860.57 GBP

    Latest NAV date 17-July-2017
    AUM 51,580,525.43 GBP

    Latest NAV date 17-July-2017
    AUM 114,048,053.49 GBP


    I would agree that total assets across the portfolios in the low £200 millions is not massive (there are many larger multi-asset funds) - but for example, if they decided to close down the products, given the investments held by the HSBC products are large and liquid funds, it's not like all the investors would have to take a huge haircut in a fire sale.

    Funds with lower assets under management find it inherently more difficult to produce a low percentage operating cost, but you would see that in the OCF and net returns before you decide to buy. Within reason, as long as the OCF isn't too outrageous, the difference in returns from asset allocation versus the other direct competitor multi-asset funds will dwarf the difference in returns that come from operating costs.
    • A_T
    • By A_T 18th Jul 17, 9:24 AM
    • 105 Posts
    • 37 Thanks
    A_T
    Sorry meant 8 figures.


    Sarcasm is not an attractive quality by the way.
    • MrWizard
    • By MrWizard 18th Jul 17, 1:09 PM
    • 21 Posts
    • 1 Thanks
    MrWizard
    I do have VLS 100%, but now I have a little more experience in funds, the 23% in the UK is worrying only because of Brexit. I'll be swapping soon. About 6% in UK is something I feel comfortable with and that will be FTSE 100 only.
    • dunstonh
    • By dunstonh 18th Jul 17, 1:24 PM
    • 88,271 Posts
    • 53,500 Thanks
    dunstonh
    I do have VLS 100%, but now I have a little more experience in funds, the 23% in the UK is worrying only because of Brexit. I'll be swapping soon. About 6% in UK is something I feel comfortable with and that will be FTSE 100 only.
    Originally posted by MrWizard
    Interesting that you feel the FTSE100 is a better option considering it has been one of the worst performing indexes for over 20 years. It is also one of the most imbalanced indexes as well.

    The 250 is spread for average UK businesses.

    Whilst some posters on this site focus on their view that the UK is over exposed, most other sites have a criticism over its high US weighting.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • MrWizard
    • By MrWizard 18th Jul 17, 2:31 PM
    • 21 Posts
    • 1 Thanks
    MrWizard
    Interesting that you feel the FTSE100 is a better option considering it has been one of the worst performing indexes for over 20 years. It is also one of the most imbalanced indexes as well.

    The 250 is spread for average UK businesses.

    Whilst some posters on this site focus on their view that the UK is over exposed, most other sites have a criticism over its high US weighting.
    Originally posted by dunstonh
    Disclaimer, I'm new to this but learning. This is what I'm thinking right now.

    Yes the FTSE 250 is better over the FTSE 100 however purely thinking about Brexit as it has the chances of crashing the market. The FTSE 100 will recover better because of it's international links. At least that's my thinking, open to the fact I could be wrong.

    Maybe the US is a little too much but the UK weighting is way more disproportional I feel 40% weighting of the US is ok. I have this weighting set for my DIY virtual portfolio, which I want to move to but will run it virtually for a bit longer.
    • bigadaj
    • By bigadaj 18th Jul 17, 8:02 PM
    • 9,340 Posts
    • 5,971 Thanks
    bigadaj
    However it's defined, having over 50% of your equity investments based in the US seems to me to be disproportionate. But others may think it's fine.

    To be honest, I don't know ~exactly~ what my regional allocations are, but I currently use VLS60, L&G MI6 and HSBC Global Strategy Balanced in roughly equal proportions.

    I won't pretend that the proportions are anything more accurate than rough approximations of what I feel is about right - because I've never felt that there is any point in being too precise about these things.
    Originally posted by fwor
    It's your decision but why those three, I can sort of understand two, or maybe smaller satellite funds in niche areas im addition to give a tilt, but those three use different strategies and approaches.
    • fwor
    • By fwor 19th Jul 17, 12:41 AM
    • 5,833 Posts
    • 3,861 Thanks
    fwor
    It's your decision but why those three, I can sort of understand two, or maybe smaller satellite funds in niche areas im addition to give a tilt, but those three use different strategies and approaches.
    Originally posted by bigadaj
    In truth there is no deep underlying strategy behind it. I know my limitations: I have absolutely no way of knowing how each of the differences between the funds will play out in the long term - so I may as well try several and see how they work out. If in the medium term one turns out to be a dog, I can ditch it - better that way than putting everything on one dog.

    One of the things that has influenced my choice is the realisation that there is little point in having a precise and completely coherent investment strategy when the market itself is often chaotic and incoherent, and driven by events that nobody can reasonably predict. So a bit of inconsistency and a lack of complete precision no longer worries me tooo much.

    I should add that around four years ago I was inspired by Tim Hale's book to implement a coherent strategy (GM 42%, GV 14%, GS 14%, EM 10%, EV 5%, Property 10%, Bonds 5%) and then realised that I just can't be rsed with all the rebalancing faff. Perhaps I'm just too lazy to do investing properly...
    Last edited by fwor; 19-07-2017 at 1:19 AM.
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