Passive Index Portfolio

ogletshore

Much obliged to you SnowMan
Thanks v much

SnowMan wrote: »

I can't see anything wrong with holding separate gilt (bond) and equity tracker funds rather than using the Vanguard Lifestyle products. While you get the automatic rebalancing with the Lifestyle funds there is nothing stopping you rebalancing when using separate funds. Using separate funds can help on occasions in using ISA investment allowances; you are generally better holding your gilts within the ISA wrapper rather than equities.

But whether you hold 60% in a gilt fund and 40% in an equity fund or hold an equivalent Lifestyle fund you are still holding 60% in gilts.

Your IFA seems to be making a reasonable point that you are over-exposed to bonds. There does seem to be only one way bonds can go, that is for yields to increase and prices to fall. Koru makes that same point earlier. This may happen suddenly or gradually.

So you could consider say substituting savings for the bond proportion. This may be more difficult if you are saving/investing through a pension. Worth talking to your IFA about the options.

In terms of cheapest mainstream (clean) trackers then a mix of Vanguard, HSBC C class, Black Rock D class, and L&G I class trackers can be used if you are concerned about investing with one company. Also HSBC and Vanguard ETFs could be considered as alternative tracking options as they are very cheap.