FTSE All World UCITS ETF

forextc

It'd echo what Audaxer says above.

I should also clarify that the Vanguard funds already contain around 5% allocation to Emerging markets. So even with only an additional 5% allocation to this market the portfolio would still be quite over-weighted the sector to its relative benchmark. The Small Cap fund I have less of an issue with as it's more diversified, although only reflects the developed world.

There is of course no reason not to try to add some 'alpha' to performance and weighting a particular market or sector is one way to do this. However personally I'm not sure why people are always to keen to do this with EM when already using multi asset funds that already contain an EM element.

Historic performance over the last 20 years shows annualized performance of around 10.7% per annum for EM. This compares to 10.1% for the S&P. So not much gain in performance and also worth noting that the EM market return came with a much higher level of volatility.

It's also worth thinking that if these markets do gain greater size and importance in the coming years, this will naturally be reflected in the balance of most global funds, with an increased allocation. I'm assuming the Lifestrategy funds would also rebalance to reflect their increased weighting.

bcfclee27

forextc wrote: »

It'd echo what Audaxer says above.

I should also clarify that the Vanguard funds already contain around 5% allocation to Emerging markets. So even with only an additional 5% allocation to this market the portfolio would still be quite over-weighted the sector to its relative benchmark. The Small Cap fund I have less of an issue with as it's more diversified, although only reflects the developed world.

There is of course no reason not to try to add some 'alpha' to performance and weighting a particular market or sector is one way to do this. However personally I'm not sure why people are always to keen to do this with EM when already using multi asset funds that already contain an EM element.

Historic performance over the last 20 years shows annualized performance of around 10.7% per annum for EM. This compares to 10.1% for the S&P. So not much gain in performance and also worth noting that the EM market return came with a much higher level of volatility.

It's also worth thinking that if these markets do gain greater size and importance in the coming years, this will naturally be reflected in the balance of most global funds, with an increased allocation. I'm assuming the Lifestrategy funds would also rebalance to reflect their increased weighting.

Thanks all for the replies, it's looking more and more like I should just keep this simple no matter how much I try to muddy the waters :rotfl:

I'm definitely gonna take on the VLS 60 so will probably go with HSBC dynamic to go with it.

Thinking il probably just leave EM & small caps alone to keep things simple.

This will mean I will take the vls60 in a ISA wrapper and will give the wife the HSBC one. This will mean they will end up with 60k in each fund (after a few years). Is this too much to have in these funds as I see people getting twitchy about holding larger amounts in the VLS etc I think some down to protection of their money, but some seem to think this amount is better off in other funds ?

AlanP_2

bcfclee27 wrote: »

Thanks all for the replies, it's looking more and more like I should just keep this simple no matter how much I try to muddy the waters :rotfl:

I'm definitely gonna take on the VLS 60 so will probably go with HSBC dynamic to go with it.

Thinking il probably just leave EM & small caps alone to keep things simple.

This will mean I will take the vls60 in a ISA wrapper and will give the wife the HSBC one. This will mean they will end up with 60k in each fund (after a few years). Is this too much to have in these funds as I see people getting twitchy about holding larger amounts in the VLS etc I think some down to protection of their money, but some seem to think this amount is better off in other funds ?

The FSCS limit per Fund House is £50k I think and that is why some people get twitchy about having more than that with one of them. It's been discussed on here a few times.

Many more don't than do I would think.

Realistically what are the chances of someone at Vanguard (or HSBC) committing such a large enough fraud that all the supposedly segregated underlying investments were never actually purchased and the money went into their Swiss Bank Account instead?

ValiantSon

bcfclee27 wrote: »

Thanks all for the replies, it's looking more and more like I should just keep this simple no matter how much I try to muddy the waters :rotfl:

I'm definitely gonna take on the VLS 60 so will probably go with HSBC dynamic to go with it.

Thinking il probably just leave EM & small caps alone to keep things simple.

This will mean I will take the vls60 in a ISA wrapper and will give the wife the HSBC one. This will mean they will end up with 60k in each fund (after a few years). Is this too much to have in these funds as I see people getting twitchy about holding larger amounts in the VLS etc I think some down to protection of their money, but some seem to think this amount is better off in other funds ?

I think keeping it simple is probably best. Are you no longer intending to mix VLS60 and VLS80 for the reasons previously discussed? If that asset mix suits you better then you should go ahead. If, however, your attitude to risk is, on balance, a little more conservative than you first thought, then just using VLS60 may suit you better. There is no good argument against creating a theoretical VLS70, however, if that proportion of equities suits you and you like the VLS underlying investments and approach.

Personally, I don't have any meaningful concerns about holding more than £50,000 with one provider as the risk is infinitesimally small. There are others on here, whose opinions I respect, who prefer not to take that very small risk. It has to be your choice. In the main, however, the issue isn't about having large sums in on fund, but more the platform holding them.

bcfclee27

ValiantSon wrote: »

I think keeping it simple is probably best. Are you no longer intending to mix VLS60 and VLS80 for the reasons previously discussed? If that asset mix suits you better then you should go ahead. If, however, your attitude to risk is, on balance, a little more conservative than you first thought, then just using VLS60 may suit you better. There is no good argument against creating a theoretical VLS70, however, if that proportion of equities suits you and you like the VLS underlying investments and approach.

Personally, I don't have any meaningful concerns about holding more than £50,000 with one provider as the risk is infinitesimally small. There are others on here, whose opinions I respect, who prefer not to take that very small risk. It has to be your choice. In the main, however, the issue isn't about having large sums in on fund, but more the platform holding them.

Hi Valiantson, I'm in the process today of telling my financial advisor that I'm going on my own.

Still mulling over whether to mix the funds and created the 70% hybrid or just to stick with a vls60 / balanced.

There is no right or wrong answer to it and I just have to make a decision and stick with it.

To be honest I will probably hybrid it because I keep coming back to this and like the mix of corporate / government bonds etc that the 4 different funds gives us.

Audaxer

bcfclee27 wrote: »

This will mean I will take the vls60 in a ISA wrapper and will give the wife the HSBC one. This will mean they will end up with 60k in each fund (after a few years). Is this too much to have in these funds as I see people getting twitchy about holding larger amounts in the VLS etc I think some down to protection of their money, but some seem to think this amount is better off in other funds ?

To eliminate the risk, albeit minimal, of eventually having more than £50k in one fund, you and your wife could both split your investments in your individual ISAs/accounts between VLS and HSBC. By doing it that way it will also be easier to rebalance within your individual accounts, as in a continuing bull run HSBC GS Dynamic will mostly likely have higher returns than VLS60.

bcfclee27

Audaxer wrote: »

To eliminate the risk, albeit minimal, of eventually having more than £50k in one fund, you and your wife could both split your investments in your individual ISAs/accounts between VLS and HSBC. By doing it that way it will also be easier to rebalance within your individual accounts, as in a continuing bull run HSBC GS Dynamic will mostly likely have higher returns than VLS60.

Yes this is exactly what I'm thinking Audaxer.

Gonna set up a hybrid for both of us in vanguard and Cavendish (HSBC). Also as we get older I can rebalance down towards the 60%.

Audaxer

bcfclee27 wrote: »

Yes this is exactly what I'm thinking Audaxer.

Gonna set up a hybrid for both of us in vanguard and Cavendish (HSBC). Also as we get older I can rebalance down towards the 60%.

That's good, but remember with VLS60 and HSBC Dynamic (85% equities) you have net equities of 72.5%. So that equity percentage could creep up if the bull run continues, and you would therefore have to rebalance before you get old, just to keep it at around that level.

Another thing to bear in mind is that the HSBC fund isn't a fixed equity allocation like the VLS fund, and I understand the fund manager could vary it a bit depending on market conditions. So before rebalancing I would just check to see if the equity allocation in the HSBC fund is still the same.

Cintrapark

This is my investment strategy and I'm extremely happy with it. CUSS is the small cap and I've thrown in additional emerging markets and REIT. The bond is IAAA.

CUSS 10%
VWRD 75%
IDWP 3%
VDEM 3%
IAAA 10%