UK Property/Real Estate Funds?

snowqueen555

Do you think it's wise to divert some cash into UK Property? At the moment I'm formulating a small portfolio. Most of the cash will go into a Vanguard Lifestrategy 80, but I feel like adding a few more funds.

Thanks

Linton

It depends on the size of the portfolio. The VLS80 will hold some property shares. You may wish to add some extra niche funds once you have say £10-£20K in VLS80. Property in my view should come fairly low in the priority list for special treatment. Perhaps once you are up to £50K.

These figures are just a finger in the air suggestion. The main point is that VLS80 on its own is pretty well diversified. So there shouldnt be any real need to buy something else until a small % holding is sufficiently large in absolute terms to be worth the effort buying.

dunstonh

Do you think it's wise to divert some cash into UK Property?

Depends on how you have built your portfolio.

If you are using single sector funds to have a spread model portfolio then bricks and mortar property funds are a way to reduce the risk and diversify. Property share funds are specialist and high risk and its debatable as to how much they diversify your portfolio and the impact the increased risk it has on your portfolio (i.e. do you have to hold less Asia and/or emerging markets to compensate).

Most of the cash will go into a Vanguard Lifestrategy 80, but I feel like adding a few more funds.

One of the major limitations of VLS is its lack of property exposure. This is why the L&G Multi-index funds can be more favourable.

However, if you plan to stick to VLS, then the whole point of using a multi-asset fund is that the allocations are built to match a risk profile/volatility rating. If you start breaking the allocation by adding single sector funds then the risk will go out of sync and your holdings will go out of sync with the efficient frontier. Good research could put you above it but poor research could bring you below it.

snowqueen555

Starting out and so won't be using large amounts of capital.

The LS80 will be my main holding, the additional funds would be a lot less in % so hopefully not too detrimental.

If there is one thing about all these funds, they are heavily weighted towards US and UK (70%-80% seems common), that is also something I wanted to rebalance.

Thrugelmir

snowqueen555 wrote: »

Starting out and so won't be using large amounts of capital.

The LS80 will be my main holding, the additional funds would be a lot less in % so hopefully not too detrimental.

If there is one thing about all these funds, they are heavily weighted towards US and UK (70%-80% seems common), that is also something I wanted to rebalance.

If the allocation is a small % wise is it worth it? Better to wait until you are ready to diversify.

dunstonh

If there is one thing about all these funds, they are heavily weighted towards US and UK (70%-80% seems common), that is also something I wanted to rebalance.

So, why are you investing in VLS and not L&G?

snowqueen555

Is there a specific fund name I can look for? Cannot find what you would be suggesting.

bigadaj

snowqueen555 wrote: »

Is there a specific fund name I can look for? Cannot find what you would be suggesting.

As dunstonh says there are similar funds to vanguard lifestrategy out there which are worth looking at. L & g multi index is one range, as is black rock consensus.

Searching for these funds will give some background and trustnet or Morningstar will give performance and allocation information, though they have only been around for a few years, little in the way of long term track record.