Novice investor asset allocation - lifestrategy or roll-your-own

guymo

Linton wrote: »

I dont think the proposal is to minimise UK content, but rather not have it extremely high, way above that justified by the size of the UK market.

That's what I was aiming for, yes.

The vanguard global stock index fund currently has 9% UK, so I was trying to get around that proportion of my equity exposure to be UK. I'm not wedded to having a UK fund and an ex-UK fund in the portfolio of course --- a global one would be fine --- but the particular trackers I was looking at this morning (the Vanguard ones) were set up that way which is why I had the figures I did. Actually the numbers I gave do slightly overweight the UK but only slightly --- I don't propose to fret about that unless someone tells me to --- but e.g. the Vanguard LifeStrategy funds have UK and US equally weighted. I still don't really understand why that should be.

Many thanks once again.

kidmugsy

Linton wrote: »

I dont think the proposal is to minimise UK content, but rather not have it extremely high, way above that justified by the size of the UK market.

Once you accept that many FTSE firms make most of their livelihood abroad, it's hard to see what "justified by the size of the UK market" might mean: why would its size matter?

TCA

A year ago I started experimenting with individual Vanguard index trackers. As my pension has a heavy UK bias I bought Dev World ex-UK, Dev Europe ex-UK, Asia Pacific ex-Japan, Emerging Markets Stock Index and Global Small Caps Index trackers in equal proportions, monthly.

However I found I started to meddle too much, attempted to rebalance too frequently and even time monthly purchases, so going forwards I'm thinking about the Lifestrategy 100% option for my ISA allowance.

I'm not overly enthusiastic about the high UK weighting so am using investment trust holdings in other geographic areas (like Asia Pacific) to dilute where I think active management is better. I also figure I can still add individual trackers or make other investment trust purchases down the line if I feel the weightings go wildly out of whack. But Lifestrategy would be the core ISA holding. So not entirely passive but not entirely active either.

Would I do like is that Lifestrategy is a collection of individual index funds as opposed to a single global fund. So despite the weightings being a bit spurious, you do (should) get a greater geographic spread. And as has been said several times, UK weighting includes UK listed companies with global exposure, so it's not cut and dried anyway.

But as you said yourself, it's all completely DIYable depending on how much effort you want to put in.