Should I have more than one fund?

chelseablue

I have recently opened a S&S ISA, investing in the Vanguard LifeStrategy 80 fund.


Never had a S&S ISA before so am wondering if just investing into the one fund is what most people do? or should I choose another fund alongside the LS 80?


Questioning whether only having the LS80 is having 'all my eggs in one basket' and maybe should spread the money around

chockydavid1983

VLS 80 is a fund of funds so it doesn't mean you have all your eggs in 1 basket. I have everything in VLS 100 atm.
Whether you need to diversify further is another question, from what others have said on here before my first thought when my pot is a bit bigger is to add a property fund, which VLS doesn't include.

ColdIron

The VLS is constructed in such a way that it can be used as a single fund, it is very diversified. One reason to add other funds might be that you feel that the Vanguard team's approach does not match your objectives. Some feel it is underweight in small caps, emerging markets and perhaps property. This is a matter of opinion, it is hard to make a one size fits all fund

Be aware that if you do add satellites it will dilute the other holdings, this is most applicable if you have a proportion in bonds. You will also need to carry out any rebalancing yourself

Either way the decision to add satellites is probably not worth it until you have enough in it to make it worth while. How much is that? Hard to say but if you had £5,000 and added 3 funds of 10% each that's £500 which won't make any real difference in the great scheme of things

How much do you have in it?

chelseablue

I have only just opened it with £1,000


Looking to put about £800 a month in

dunstonh

As you will know from your own research, VLS is a fettered multi-asset, fund of funds. So, whilst it is a single fund, it is made up of a collection of underlying funds. The whole point of a fund like this, and why you are paying more for it, is that they are doing some of the work for you to meet what they believe are the correct asset allocations.

bowlhead99

It is a decent way to cheaply spread your £1000 around large companies in all the major stock markets of the world plus some global corporate and government bonds. It doesn't stop being good at that job if you have £1800 or £2700 or £3600 instead of £1000. In other words if it's good enough for your first thousand it's probably fine for the next and the next and the next.

Of course, you could invest every £800 in something different so you have 13 different funds a year from now. The question is why you would want to. Unless you don't have anything to do with your spare time except watch the values swim up and down relative to each other like some big fish tank, there's probably no point.

As mentioned above by coldiron, once you've got tens of thousands of pounds invested and decided for yourself what is missing from the 10+ funds already held by the VLS80, maybe add a small amount of another fund. Until then there is not much point unless, as Dunstonh suggests, you think you know better than vanguard what to invest in. If you don't think VLS80 meets your needs and some other global multi asset fund is better, buy that one instead.

sebthered

I'm about to transfer my current cash ISA to a Vanguard LifeStrategy 60 fund.
I remember seeing some past posts advising that perhaps £50k was the 'ceiling' for sensible investing..
As my investment would be £50k any suggestions what fund/s would sit well alongside this fund for future investment of my annual allowance?

AlanP_2

sebthered wrote: »

I'm about to transfer my current cash ISA to a Vanguard LifeStrategy 60 fund.
I remember seeing some past posts advising that perhaps £50k was the 'ceiling' for sensible investing..
As my investment would be £50k any suggestions what fund/s would sit well alongside this fund for future investment of my annual allowance?

Not sure where you have seen the £50k comment you refer to but you often see similar comments to those earlier in this thread about it not being worth the hassle to add satellite funds until you get to a few 10s of thousands so perhaps that is what was meant by what you read.

If VLS60 meets your objectives why add anything just because it is now £50,001 in there? The point being only add an additional fund or funds if you have a good reason and not just based on an arbitrary £ value.

Typical comments about the VLS range are that Emerging Markets is low compared to what some would consider sensible, and some make the point that Small Caps and Commercial Property are missing.

Some think the UK bias is too high compared to overall world stock market ratios (but it is marketed to UK investors who see the FTSE referenced in their newspaper and on the TV so the UK and the £ is what they relate to most easily).

If you agree with any of the observations then looking at adding a Small Cap fund, an EM specific fund and a Property Fund would be worth investigation.

If the Small Cap was non-UK (for example) then along with EM you would go some way to reducing UK specific exposure as well.

Have you looked at the L&G Multi Index range or the Blackrock Consensus range which are similar fund of funds offerings to VLS?

Not implying they are any better or any worse but they do offer a different asset mix (L&G include Property for example).

BLB53

I have held the VLS 60 for a couple of years now and, to be honest its possible going to do as good a job on its own as a more diverse portfolio however I cannot resist the attempt to maybe do just a little bit better than the global index.

For this reason, although the VLS accounts for over 40% of my portfolio, I also hold Aberforth Smaller Companies, City of London, Scottish Mortgage and a couple of property REITs such as Tritax Big Box as they offer exposure to some potential growth areas. However they will also bring more volatility so that is a big factor to consider.

Good luck!

dunstonh

I think in past threads we have suggested figures around 50k are probably the point you could start thinking about building a bespoke portfolio. You often see the example of 3% in Japan. With £50k that is £1500. Still low but better than portfolios of 20k trying that.

Another possibility is the FSCS limit per fund house of £50k. You "may" want to run multiple funds when you get over £50k should that particular issue be of concern to you.

racey

dunstonh wrote: »

Another possibility is the FSCS limit per fund house of £50k. You "may" want to run multiple funds when you get over £50k should that particular issue be of concern to you.

Does this mean that if you have, say, £250000 of funds in Charles Stanley you are only covered up to £50000 if they go bust?