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Should I supplement a passive VLS?
munkee_saver
Posts: 16 Forumite
Evening All,
I've had 3 funds for a little over a year now in a S&S ISA, with the planned expectation of 5% gains a year.
VLS60 ACC
L&G US Index Trust ACC
CF Woodford Equity Income C ACC
Originally the plan was to keep VLS as the back bone of my ISA with the majority of investment there for diversification/ease. Since then I've slowly added in a few satellite funds which are there for the growth opportunities covering UK and USA equities. Tonight I spent a couple of hours looking over Asia & Europe (ex uk) prospective funds to give the diversification across other markets.
However in doing so it's made me question my whole setup. Whilst L&G has given great gains this year, woodford has been sliding. Would I have been much better just piling everything in to VLS.. probably.
Whilst having VLS sat there do I really need to be adding in extra funds as hopeful gainers when I could quite easily switch to a VLS 80 or 100? In my head I was planning to just keep VLS60 for the next 30 years and settle with the moderate gains and somewhat stability. The other funds I add in could be dropped along the way to ease back my risk, whilst knowing they are being managed by non Vanguard managers for a different view of the markets.
Any opinions welcomed. I'm more than happy to go to 80+ equities but the VLS funds give you diversification with little effort.
I've had 3 funds for a little over a year now in a S&S ISA, with the planned expectation of 5% gains a year.
VLS60 ACC
L&G US Index Trust ACC
CF Woodford Equity Income C ACC
Originally the plan was to keep VLS as the back bone of my ISA with the majority of investment there for diversification/ease. Since then I've slowly added in a few satellite funds which are there for the growth opportunities covering UK and USA equities. Tonight I spent a couple of hours looking over Asia & Europe (ex uk) prospective funds to give the diversification across other markets.
However in doing so it's made me question my whole setup. Whilst L&G has given great gains this year, woodford has been sliding. Would I have been much better just piling everything in to VLS.. probably.
Whilst having VLS sat there do I really need to be adding in extra funds as hopeful gainers when I could quite easily switch to a VLS 80 or 100? In my head I was planning to just keep VLS60 for the next 30 years and settle with the moderate gains and somewhat stability. The other funds I add in could be dropped along the way to ease back my risk, whilst knowing they are being managed by non Vanguard managers for a different view of the markets.
Any opinions welcomed. I'm more than happy to go to 80+ equities but the VLS funds give you diversification with little effort.
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Comments
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Whilst L&G has given great gains this year, woodford has been sliding.
Obviously you cannot compare the two funds. Woodford is planning for an event that has not happened yet.Whilst having VLS sat there do I really need to be adding in extra funds as hopeful gainers when I could quite easily switch to a VLS 80 or 100?
The point about using multi-asset funds is that you they save you the need to use single sector funds. You introduced further management decisions into the process and decided your asset allocation was better than Vanguards. What research, data and analysis have you done to make you think you know more than they do?I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
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bottleandahalf wrote: »Brexit/ Crash?
With respect he did say 'that has not happened yet' so Brexit is well out of the equation? And IMHO nobody can forsee a crash?0 -
You need to look at your portfolio as a whole rather than as a collection of random funds.
The Vanguard fund already includes a US tracker. Why are you adding another one? If you want to add a bit more diversity to a VLS fund you could look at a small companies fund. There could be an argument for SE Asia (ex Japan) or some of the wilder areas of EM, but not Europe - that's already included in VLS.
And then there is Woodford. He goes to great length to choose UK companies that he believes will out-perform in the long term. Fair enough, he might be right. But if you believe he is right why add the the set of UK companies that comprise 25% of VLS equity that is chosen quite differently? Mixing them together makes a confusing jumble.
If you are going for VLS, which is a reasonable approach for someone who does not want to manage his/her investments in detail, then you may decide to leave it at that or add one or two extra things which arent well represented in VLS. If you want to really depart from the VLS allocations in the major markets you would be better off choosing your own niche funds for each region rather than adding them to a core VLS. However this only becomes worth considering if you have say £20K or perhaps rather more to invest.0 -
With respect he did say 'that has not happened yet' so Brexit is well out of the equation? And IMHO nobody can forsee a crash?
We still have the same trade relationships with Europe and the rest of the world as before the brexit referendum, so brexit has definitely not happened yet.loose does not rhyme with choose but lose does and is the word you meant to write.0 -
With respect he did say 'that has not happened yet' so Brexit is well out of the equation? And IMHO nobody can forsee a crash?
Brexit has not happened yet.
We're told by the caretaker it will happen, whether it actually does (as envisaged) and on what terms is a complete unknown at this point.'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0 -
It's like an MSN bait to click,
and then you get to a laser Eye Surgery home page.
It's bound to be a crash. I shall assume it's 2018.
I want to hedge for a nuclear war.
Used to think in terms of a Pacific Island, but they are all drowning in the rising sea level.
Solar powered submersible house boat.
Like Kevin Costner, Waterworld.
When I fancy a pint, go to New Zealand.
Got it. He is investing in an under water real estate deal, along the lines of Vivos:
http://www.terravivos.com/0 -
Please can you explain 'Woodford is planning for an event that has not happened yet'? Don't really understand what you mean, sorry?
Woodford has a defensive stance. Going defensive lowers your growth in growth periods but reduces the losses in negative periods. So, he has gone defensive in anticipation of a negative period that hasnt happened yet.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
You need to look at your portfolio as a whole rather than as a collection of random funds.
The Vanguard fund already includes a US tracker. Why are you adding another one? If you want to add a bit more diversity to a VLS fund you could look at a small companies fund. There could be an argument for SE Asia (ex Japan) or some of the wilder areas of EM, but not Europe - that's already included in VLS.
And then there is Woodford. He goes to great length to choose UK companies that he believes will out-perform in the long term. Fair enough, he might be right. But if you believe he is right why add the the set of UK companies that comprise 25% of VLS equity that is chosen quite differently? Mixing them together makes a confusing jumble.
If you are going for VLS, which is a reasonable approach for someone who does not want to manage his/her investments in detail, then you may decide to leave it at that or add one or two extra things which arent well represented in VLS. If you want to really depart from the VLS allocations in the major markets you would be better off choosing your own niche funds for each region rather than adding them to a core VLS. However this only becomes worth considering if you have say £20K or perhaps rather more to invest.
I tend to agree that you either add some extra funds that are not represented in the VLS strategy or alternatively build your own portfolio mainly using trackers but also consider some active funds for bonds or property.0
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