Cash and Fixed Interest savings

2shy

Where do people include cash and fixed interest savings in their total portfolio make up?

Say hypothetically, I have a 20k SS ISA in a 60/40 split equity/bond fund, I have 10k sitting in an easy access ISA or savings account for emergency purposes, and say 10k in a Fixed Rate ISA for 2 years.

Would people class the Fixed Rate ISA as part of their bond-like allocation? Which of these scenarios seems best.
Equity / Bond / Cash

1. 12k Equity, 8k Bond, 20k Cash = 30/20/50
2. 12k Equity, 18k Bond, 10k Cash = 30/45/25
3. 12k Equity, 8k Bond, 10k Cash (ignore emergency fund) = 40/27/33

Am I just being over analytical? Im just trying to plan ahead for when the cash ISAs drop their rate, how much I should look to rebalance.

Thanks.

Ark_Welder

For me, Option 1 because I don't have a specific emergency cash allocation, just an instant access pool into which income is received. I do not count fixed-term cash as being the same as bonds because their characteristics differ: the nominal value of cash is not affected by interest rates, unlike many types of bonds.

But outside of the main breakdown, I also keep track of: instant-access cash versus fixed term, and when the fixed term are due to mature (i.e. how close to becoming 'instant' they are); the level of cash plus investment-grade bonds; the level of equities plus sub-investment grade bonds (or 'junk', as they are sometimes called); also, equities plus private equity.