Global (ex UK) v US/Europe/Japan trackers

bowlhead99

MrLeek wrote: »

Then again, my partner's health is not great either. So I need to calculate what things would look like in a few different scenarios. If (for example) I had to drop to £300 per month then 12 funds would be very awkward to manage. That forces some portfolio contracting, which could be selling at a market low....... Unless I'm mis-understanding this element?

If the funds all have a role in the portfolio you wouldn't need to contract the portfolio or pay tiny amounts each month - you could just pay in to each, but less frequently. Say you have 12 funds but only £200pm available:

First month of each quarter, pay £50 into funds A,B,C,D
Middle month of each quarter, pay £50 into funds E,F,G,H
Last month of each quarter, pay £50 into funds I, J, K, L.

So each fund sees a contribution every quarter instead of every month. No real change in the efficiency of the investment, just need to be able to log in and change your monthly choices on what your investment direct debit is going to buy each month. Most platforms let you do that, every single month. With modern online platforms it's maybe a five minute job to change all 4 for the next 4 on the list. In the last quarter of the year you can apply your annual rebalance if needed and buy more or less of each fund than usual to bring the weights closer to their target.

Obviously if you are only investing £300 a month right from the start then a 12-fund portfolio is way overkill because it will take you half a decade to even get to £20k invested and it's not worth the complexity unless you really enjoy the fun of it. However if you are investing substantial amounts right from the start and then just at some point happen to have a cashflow restriction for a while, you don't need to drop the whole existing portfolio - there are ways and means. For example another alternative would be to just keep your 12-fund portfolio at whatever level it is at, manually rebalancing it once a year, and divert all new money into a single multi-asset fund.

MrLeek

bowlhead99 wrote: »

If the funds all have a role in the portfolio you wouldn't need to contract the portfolio or pay tiny amounts each month - you could just pay in to each, but less frequently. Say you have 12 funds but only £200pm available:

First month of each quarter, pay £50 into funds A,B,C,D
Middle month of each quarter, pay £50 into funds E,F,G,H
Last month of each quarter, pay £50 into funds I, J, K, L.

So each fund sees a contribution every quarter instead of every month.

Are you referring to a top-up here? I understand the logic you're referring to - at least I think I do; add in money into certain funds as required/when money is available. That way I'm more effective/efficient with the investment. Moreover, I also assume that when I read about rebalancing using new investment cash it's quite literally put the money into the underperforming funds (leaving the over-performing - overheating? - funds untouched).

What has struck me is the varying differences between brokers. Using Vanguards' FTSE U.K. All Share Index Unit Trust - Accumulation fund as an example: (GB00B3X7QG63)

- Fidelty: £1000 initial, £250 top-up, £50 monthly minimum
- Hargreves Lansdown: £100 initial, £25 monthly minimum, Unknown for top-up
- Charles Stanley: monthly investment available. I've yet to find the relevant minimal amount yet!

I'm assuming that's fairly typical? I may be overcomplicating an (already!) complicated topic but it's good to know there's a few options available when I hit choppy water. But this little exercise illustrates what keeps pushing me away from Charles Stanley and back to Fidelity - finding the information I want always seems to be straightforward with the latter (naturally I can use any information source before using my broker of choice). Until I hit £20,000+ a percentage broker is probably my best option.

Everytime I think i've got a handle on this topic I get another curveball to handle! It's an enjoyable, informative and frustrating exercise all at the same time! :rotfl: