Vanguard Life Strategy v HSBC Global Strategy Dynamic Portfolio v Fundsmith Equity

needhouseadvice

I'm a complete novice to investing and am thinking of setting up my first stocks and shares ISA. After much Googling I've narrowed it down to three options - Vanguard Life Strategy, HSBC Global Strategy Dynamic Portfolio and Fundsmith Equity.

Vanguard seems to be the one that is recommended for beginners like me. I'd probably get the VLS80 as I'd be keeping my money there long-term. But my eye was also taken by the impressive returns by Fundsmith Equity and HSBC: https://www.trustnet.com/news/796585/five-flawless-funds-topping-the-performance-tables

Which one should I go for?

Thrugelmir

The aim should be to build a diversified portfolio. Select a fund that gives you the widest possible exposure to create a solid foundation for the future. No single fund or strategy is always going to be best over an extended period of time.

Alistair31

I!!!8217;m fairly new to investing and my only investments so far are the 3 you mention, spooky.

Answer: There is nothing limiting you to just one of them.

needhouseadvice

Alistair31 wrote: »

I!!!8217;m fairly new to investing and my only investments so far are the 3 you mention, spooky.

Answer: There is nothing limiting you to just one of them.

Seriously? That is spooky! Which has performed the best so far?

Well, the limit is my funds. I don't have that much to invest - I thought I'd start off with £2,000 to 3,000 first so wouldn't it be better to invest such a small amount in one ISA?

economic

Thrugelmir wrote: »

The aim should be to build a diversified portfolio. Select a fund that gives you the widest possible exposure to create a solid foundation for the future. No single fund or strategy is always going to be best over an extended period of time.

How do comments like this even help? What’s the point of as much diversification as possible? Own a tiny amount of everything that can be bought? You would be buying a lot of crap in that case!!

Alistair31

Fundsmith.

Audaxer

needhouseadvice wrote: »

I'm a complete novice to investing and am thinking of setting up my first stocks and shares ISA. After much Googling I've narrowed it down to three options - Vanguard Life Strategy, HSBC Global Strategy Dynamic Portfolio and Fundsmith Equity.

The first two are well diversified multi asset funds, so either or both would be a decent option. The Fundsmith fund is 100% equities and would normally be held as part of a portfolio containing other funds in different sectors to get the desired balance and diversification. The Fundsmith fund may have had the best returns recently but it is likely to have a much bigger fall than the other two in an equity crash, so I don't think many people would hold that as their only investment.

Blackavar

I've just put all of mine into VLS via Iweb. I think you just have to take a deep breath and jump

Prism

Audaxer wrote: »

The Fundsmith fund may have had the best returns recently but it is likely to have a much bigger fall than the other two in an equity crash.

Pretty much the whole purpose of Fundsmith is to invest in companies that would still be profitable during a crash so it would be pretty disappointing if it did. I wouldnt be surprised to see it hold out better than both of the other funds even with their 13% and 20% bond allocations.

Where I think it will struggle a little is if interest rates keep going up and people move out of bond proxies.

bowlhead99

needhouseadvice wrote: »

Seriously? That is spooky! Which has performed the best so far?

You would generally expect Fundsmith (which is all invested in equities) to do better in the good times(and relatively worse in the bad times) than the ones which use multiple classes of assets (equities and bonds etc) such as HSBC Global Dynamic or Vanguard Lifestrategy 80. Mr Smith will hope it does better than them in the bad times too, as those other funds don't have a huge value of non-equities.

But Fundsmith's equities are a relatively small concentrated portfolio of just Mr Smith's favourite companies, so is likely to be more volatile than those other two funds which hold shares issued by thousands of companies in every corner of the world, and bonds issued by a great many companies and governments.

So, that doesn't mean Fundsmith is the best thing for you to buy - even if it did give a higher return for Alistair31 over the limited time he held it - unless you are comfortable that you only want to invest in a concentrated portfolio of equities rather than instead investing in a much broader portfolio of equities and bonds. It depends what your long term goals are and also your tolerance for risk. As economic mentions, if you invest in absolutely everything you will buy a lot of crappy investments - but you will also buy a lot of great investments, so over the long term you should do OK.

Well, the limit is my funds. I don't have that much to invest - I thought I'd start off with £2,000 to 3,000 first so wouldn't it be better to invest such a small amount in one ISA?

Well, with many fund-supermarket type platforms you can invest in one ISA and hold multiple funds within that ISA - the ISA itself is just an account number, like a shopping basket into which you put the funds. But you are right that when you are only investing a relatively small amount compared to your entire lifetime earnings, it is probably not going to be a grievous mistake to buy one or the other rather than doing £1000 each in all three.

rangers_fc

Really we are all gamblers its a question of how much you are prepared to gamble. equities i.e shares over the longer term outweighs banks. However you have to accept investments may fall as well as rise. So pick a globally managed fund such as VLS or HSBC Global Strategy Dynamic Portfolio and expect volatility. It is likely you will profit if you hold the funds for a extended period , more than 5 years