Vanguard LS80 - am I missing out on anything

NewInvestor35

Hi,

I've searched this forum for the answer to my query, but I'm still unsure. At the moment, I have £20,000 in Vanguard LS80 (ISA) via Vanguard Investor as well as £750 in 3 Baillie Gifford ITs (Japan, Scottish American and Scottish Mortgage to be precise).

I have a further £20,000 in my Vanguard general account to invest until April, at which point I will Bed and ISA. I could put the second £20,000 it into LS80 as well, but some of the comments I've read during my research made me think that there could be other areas that LS80 doesn't really hit? A few users suggested that LS80 was 'UK heavy' and that a global small cap index fund might make a good addition, albeit only a small %. The asset allocation side is one I'm still trying to better understand, so please accept my apologies.

Many thanks

bcfclee27

I've posted several times on things like this to do with vls80 and adding small caps.

With all the info I just kept it simple and left it in vls80 without adding the small cap.

Basically with those amounts it probably won't make a lot of difference either way so it's up to you whether you think owning that proportion of smaller companies is worth doing.

Prism

The higher percentage of UK equities in VLS80 is overstated IMO. There is no actual problem with having a higher percentage UK invested. Theoretically that reduces the currency exposure. However VLS80 invests in the FTSE All Share which is dominated by the FTSE 100, which itself is heavily focused on big global companies which are very much affected by currency changes. In addition, the FTSE is heavy on miners and oil companies which may or may not be a good thing.

So if you want to change things a little you could invest in mid size or smaller companies. Global if you don't mind currency risks or UK if you do. UK mid cap and smaller company funds tend to do quite well.

Is it all worth it? Unless you dedicate a reasonable percentage to it probably not.

bostonerimus

Fear of "missing something" is common with investors and it can lead to some silly and risky investments. An excess global small cap allocation will probably increase the volatility of your portfolio, but there are studies that it can improve risk/return metrics. However, it's debatable. Being overweighted in the UK isn't a terrible thing when you are a UK resident. So more VLS80 will be just fine. You won't keep up with the high flyers swinging on the Asian small cap trapeze, but you also won't be risking a really nasty fall to the sawdust.

Prisms comments are well taken, but remember there is no one correct solution here, just a vast number of choices and possible ways of success or failure, so don't worry that you are missing something. It just might be a good thing to miss.

NewInvestor35

Thank you for the input. Sounds like I'm as well leaving alone.

Bostonerimus - definitely, it's really easy to think you're missing out on something. That's mainly why I posted here first! I guess in my situation, I am being a little impatient in so much that I am only just starting out, but will have quite a good amount of funds to invest after this and feel like I'm 'playing catch up', which I dare say could be recipe for disaster with the wrong person behind the mouse buttons.

bostonerimus

NewInvestor35 wrote: »

Thank you for the input. Sounds like I'm as well leaving alone.

Bostonerimus - definitely, it's really easy to think you're missing out on something. That's mainly why I posted here first! I guess in my situation, I am being a little impatient in so much that I am only just starting out, but will have quite a good amount of funds to invest after this and feel like I'm 'playing catch up', which I dare say could be recipe for disaster with the wrong person behind the mouse buttons.

As a beginner something like VLS80 is a good place to be, it's not bad for an experienced investor either. Educate yourself about asset allocation and investing so that as your portfolio grows you can make sound judgements. The best things you can do for success aren't necessarily fund choices though, the are using all the tax efficient accounts you have available......so ISAs and pensions.....and controlling your spending. Get those right and invest regularly. That's all I did for 30 years and now I'm financially independent. Success isn't guaranteed, but you can make it more probable by following a few simple rules.

Thrugelmir

NewInvestor35 wrote: »

as well as £750 in 3 Baillie Gifford ITs (Japan, Scottish American and Scottish Mortgage to be precise).

Either increase your holding or sell. Too small to be worthwhile.

Alexland

Thrugelmir wrote: »

Either increase your holding or sell. Too small to be worthwhile.

Barely worth the trading fees to sell either - probably best left alone to grow into something bigger.

NewInvestor35

More than happy to increase my BG holdings, that would just mean finding further funds to ensure my ISA is maximised next year. The holdings on BG are increased on a monthly basis anyway, albeit only by £30 at the moment. How much is a worthwhile amount to increase by, £1,000, £3,000, more?

Alexland

NewInvestor35 wrote: »

More than happy to increase my BG holdings, that would just mean finding further funds to ensure my ISA is maximised next year. The holdings on BG are increased on a monthly basis anyway, albeit only by £30 at the moment. How much is a worthwhile amount to increase by, £1,000, £3,000, more?

If you are doing the BG regular saver plan then you might as well continue and after many years it will hopefully be worth something noteworthy. I do something similar with £50 per month into a BG child savings plan. It's not much of our portfolio but it's still something.

Alex.

Cactus_Jack

I started off with VLS but I didn't fancy the UK bias, so I recently moved into Vanguard FTSE Global All-Cap instead. It's only equities though, no bonds element (that is fine by me for my timescale).

https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-accumulation-shares