Investment watchlist, thoughts?

ian-d

I'm beginning my venture into the world of investments for long term gains (hopefully). Markets might be toppy at the moment, so intention is to add money slowly over the course of this year (all within ISA wrapper). I'm looking at these index funds and bonds so far; appreciate that some will overlap. Thoughts appreciated and examples of your own portfolio gratefully received:

BlackRock Emerging Markets Equity Tracker
BlackRock Pacific ex Japan Equity Tracker
CF Woodford Equity
Fidelity Moneybuilder
HSBC FTSE 250 Index
Legal & General International Index Trust
Legal & General UK 100 Index Trus
Vanguard LifeStrategy 100% Equity
Vanguard LifeStrategy 40% Equity
Vanguard LifeStrategy 60% Equity

Intention is a balance of UK indexes/bonds, US indexes/bonds and Global indexes.

Vanguard added to watch list solely because of their low fees; I question whether their spread negates some of the others? Similarly with the UK indexes covered by a few here.

ColdIron

Hard to say without proportions but what is your justification for 1) mixing the generalist funds like Vanguard with more specialist funds and 2) such a wide range of LifeStrategy allocations. Seems confused to me

jamei305

Why the two income funds? Do you need an income or do you like the particular mix of shares they hold for some reason?

dunstonh

No weightings means it is impossible to consider structure but the choice of funds seems really strange. Three different multi-asset funds with near identical underlying assets makes no sense. The use of a FTSE100 tracker would need some justification as its such an awful index.

You then have to ask why are you using trackers as you do not appear to believe in the principle of passive investing. You are making significant management decisions. So, what makes you more qualified and capable of beating professional fund managers?

It would help to know the amounts as well as you could be significantly over-complicating this.

If I saw one of my advisers putting together that fund selection I would consider it poor advice and take appropriate action.

masonic

I hope this is just a shortlist from which you will pick 1-4 funds in which to actually invest. Seems to me your choices are:

- Vanguard Lifestrategy OR some combination of L&G International + Fidelity Moneybuilder Income
- Leave it at that OR add come CF Woodford OR some combination of FTSE100/FTSE250 tracker
- Leave it at that OR add some combination of the Japan / EM funds.

ian-d

Sorry for the "income" confusion, mistaken product, only interested in accumulation.

As mentioned, there is overlap; these are products I've highlighted for consideration, obviously no point investing in duplicates, though I may need some assistance in understanding which are (I'll research too). I will cherry pick between them and others.

In terms of money; either going to utilise the LISA so max £4k per year; or a proportion of my Cash ISA, so in the region of £25-50k, over a period of time to spread risk on ups and downs.

Do Vanguard products typically cover all basis, or would a more sensible approach be to target an individual bond fund, individual index fund etc? Is there any point overlapping L&G and HSBC FTSE products, maybe focus on 250 rather than the 100?

Thoughts/views appreciated.

dunstonh

As mentioned, there is overlap; these are products I've highlighted for consideration,

In which case, if you have done your research correctly, you would only have one VLS being suitable for you. Not three

In terms of money; either going to utilise the LISA so max £4k per year; or a proportion of my Cash ISA, so in the region of £25-50k, over a period of time to spread risk on ups and downs.

In which case, one multi-asset fund will do the job fine. Dont over complicate it and try and build a bespoke portfolio of single sector funds on such a small amount.

For example, if your model allocation for Japanese equity was 3% then 3% of £25,000 is just £750.

Do Vanguard products typically cover all basis, or would a more sensible approach be to target an individual bond fund, individual index fund etc?

They are not products, they are funds. The VLS funds cover a selection of areas but are not as widespread as others. The more cautious investors may prefer L&GMI instead

Is there any point overlapping L&G and HSBC FTSE products, maybe focus on 250 rather than the 100?

I would forget about trying to build a bespoke portfolio of single sector funds at this stage. To get to a position where you are likely to beat a multi-asset fund will take some learning and understanding. Something you dont have yet but something you can get over time.

It isnt a case of picking a random percentage and putting into a random passive fund. That is poor quality investing. It is about having a structure and process using allocations that match economic data, actuarial assumptions and risk profiles and then picking funds that you feel offer best options with the end result being the plan to beat the multi-asset fund you could have used instead that does all that for you.

ian-d

Thank you dunstonh for the sound advise, when you put it that way, 3% of not very much is just a waste of time, even if the % increases are relevant regardless.

Would your view change if it was a large sum of money, say £25k? Reason being that I have that invested with Lloyds in their e-investment ISA (past contributions, not this year) but I'm getting told their fund (with Scottish Widow) is a poor performer...it hasn't started yet, waiting for the ISA money to transfer in.

dunstonh

Would your view change if it was a large sum of money, say £25k?

Not really. Bespoke portfolios tend to be more sensible at the 100k range.

You can start looking to adjust allocations if you feel the multi-asset fund is lacking in an area earlier than that. Maybe 25k onwards. However, you must always remember that any adjustments you make are management decisions and you need to decide if you have the knowledge and understanding at that stage to make the right management decisions.

ian-d

dunstonh wrote: »

However, you must always remember that any adjustments you make are management decisions

But my missus is hopeless with money