Should we Invest in only one fund?

enthusiasticsaver

My husband and I are relatively new to investing and have stocks and shares isas and I have a sipp. We have other occupational pensions and my husband took early retirement last year and I will do the same at the end of this year.

All our investments are in Vanguard LS60 and amount to around £150k between us. We have a large cash buffer in national savings earning only 0.75% now plus some high interest current accounts and are selling a property this year so will have more to invest.

I think I should expand our portfolio now to include another fund rather than keep it all in Vanguard as the figure is now quite high. I am still looking for long term growth and will accept moderate risk. I am researching global managed income funds like Artemis high income and Henderson global income.

Do other more experienced investors think this is sensible or is it better to stick with the Vanguard considering it is the correct level of risk for me, balanced, well diversified, does what I need it to and has low charges? I want to manage these myself rather than use an IFA as so far I have not found one I feel confident in.

Audaxer

I agree probably good to diversify into other funds but if you are still interested in growth, just wondering why you are looking at adding income funds.

I am in a similar position, with my wife and I having recently invested in VLS 40s. I really like the VLS products but I am a bit reluctant for us to put more than £50k each into Vanguard, as I understand you are only covered up to £50k each by the FSCS for any fund house, although the risk is probably minimal. As I am retired and looking for income as well as growth I am looking to invest further funds in a selection of Investment Trusts for income so as not to have all my eggs in the VLS basket.

ian-d

Interested in answers to this also, but will add, just make sure any other funds don't conflict with the structure of the VLS60 you already have, i.e. buying more equities outside of this fund will water down the bonds proportion etc.

chockydavid1983

VLS60 isn't a single fund, it's a fund of funds.
By all means add things it doesn't cover or add more of a region/ asset type but it is already pretty well diversified.

enthusiasticsaver

Audaxer wrote: »

I agree probably good to diversify into other funds but if you are still interested in growth, just wondering why you are looking at adding income funds.

I am in a similar position, with my wife and I having recently invested in VLS 40s. I really like the VLS products but I am a bit reluctant for us to put more than £50k each into Vanguard, as I understand you are only covered up to £50k each by the FSCS for any fund house, although the risk is probably minimal. As I am retired and looking for income as well as growth I am looking to invest further funds in a selection of Investment Trusts for income so as not to have all my eggs in the VLS basket.

I am open to Acc and income but thought seeing as we retired it might be an idea to have an option to take the income (providing I can put it in an ISA wrapper) or reinvest depending on how we manage once we living only on our company pensions. I have read that if we reinvest an income fund the return is the same as an acc anyway.

Not having all our eggs in one basket is primary reason for considering other funds. We have more than £50k in each of our names so technically over the guarantee limit but I am not overly concerned but just don't think we should put in more.

I am considering the next lot of money as being invested for longer than our existing investments, maybe to cover care if needed in later life. I am therefore prepared to take slightly more risk as it may or may not be need to be accessed.

enthusiasticsaver

chockydavid1983 wrote: »

VLS60 isn't a single fund, it's a fund of funds.
By all means add things it doesn't cover or add more of a region/ asset type but it is already pretty well diversified.

Yes I realise that it is well diversified and it is a fund of funds. It is a passive fund though so I think using a managed one for income might be an option. I just do feel quite uncomfortable having all our investments with Vanguard.

enthusiasticsaver

ian-d wrote: »

Interested in answers to this also, but will add, just make sure any other funds don't conflict with the structure of the VLS60 you already have, i.e. buying more equities outside of this fund will water down the bonds proportion etc.

That is certainly a consideration but I am treating this bucket of money as a pot used for separate purposes. The Vanguard 60 is relatively medium to low risk as there is a possibility we may need to draw on it within the next 10 years in our early retirement up to age 70. This money I think will only be needed if we need care in later life so we are prepared to take more risks so it might be higher equity or I may look into offsetting risk by doing global equity for 50% and global bond for 50%.

I have 6 months to consider anyway so just bouncing ideas around at the moment.

Audaxer

enthusiasticsaver wrote: »

I am open to Acc and income but thought seeing as we retired it might be an idea to have an option to take the income (providing I can put it in an ISA wrapper) or reinvest depending on how we manage once we living only on our company pensions. I have read that if we reinvest an income fund the return is the same as an acc anyway.

Not having all our eggs in one basket is primary reason for considering other funds. We have more than £50k in each of our names so technically over the guarantee limit but I am not overly concerned but just don't think we should put in more.

I am considering the next lot of money as being invested for longer than our existing investments, maybe to cover care if needed in later life. I am therefore prepared to take slightly more risk as it may or may not be need to be accessed.

My understanding is that if you are looking at high yielding interest funds you will be losing out on some growth. That's fine if that is what you are looking for - it is what I am looking for with Investment Trusts hopefully. However if you are looking to invest your next lot of money for longer I am surprised you are considering the income funds you mentioned.

In my case I'm looking to leave my VLS fund to grow, just taking the modest yield as income, and use the ITs that I'm considering for more regular growing income to supplement my pension income.

Bravepants

Interesting thread!


I too have most of my money in VLS60, but also I have Fidelity World Index to make 70% equities and 30% bonds in total, to take on more risk, and diversify fund houses. I have also just popped £2.5k in a Vanguard short term bond fund as half of my emergency cash fund. So I have picked and chosen funds according to need.


There are many rules of thumb out there to keep things simple. A lot of opinion suggests for long term investment (say someone starting out in their 20s) that a single Global Equity Index Fund (or fund of funds) is sufficient. Also, according to Tim Hale's opinion, hold your age as a percentage in bond funds. If a single VLS fund does everything you NEED, global diversity, bond content, then stick to that. I may dump my global fund into VLS 60 when I hit 50 in a couple of years.

Stirfry

I also have money in VLS60 acc, but have just started investing in Investment Trusts primarily for income. The funds are in S&S isa's. I have 4 IT's and as I invest further I intend to add some Bonds 20/40% and possibly unit trusts. I will look to rebalance Funds on a yearly basis. BTW I have no appetite for individual shares and I am a total newbie but will eventually have around 550k invested.

I will not be drawing on the income until my investments are fully in place in the next 3 years (funds currently in fixed term savings) so have the dividends paid to the isa a/c and will use that to rebalance the portfolio.

You have said that you do not need to draw a regular income. When reinvesting income remember you will incur charges, whereas if the money is automatically reinvested you could still sell off part of the investment if you needed the money.

If you have the appetite to manage your income without panicking too much when investments fall, why not start reading up on Unit Trusts and Investment Trusts in order to devise a strategy. Diversity seems to be the key, whether it be geographically or through different types of investments.

Glen_Clark

UK Bond rates are now over 2% behind projected inflation, which suggest to me they are over valued, so I would rather spread my cash around best buy retail savings accounts - getting a better rate than the professional big investors can get through bonds..
Or am I missing something here?