Investing at 30 - fund advice

WeWereOnABreak

Hi -

I have approx £20k to invest, which can be supplemented with at least £100/mo for the foreseeable future. I already possess some individual company shares due to previous employment, but am looking to move into funds to diversify and reduce vulnerability.

I am only 30 and already have a substantial emergency buffer built up (12 mo salary) and am overpaying £200/mo on my mortgage (currently approx 50% LTV) and maxing my employer’s pension contributions. Other than my mortgage I am debt free, I’m single and have no dependents, and am mainly wanting to plan for my future - ideally an early retirement.

As such, I have a reasonably high tolerance to risk, but would also prefer to invest in funds that will require minimal fiddling/rebalancing each year. I’d sort of like a set and forget arrangement but with decent returns, since savings/current account interest is abysmal.

From the research I‘ve done it looks like VLS80 or 100 might be a good starting point, but are there any other funds I could consider so that I can spread my money wider? Or do you think I should take a totally different approach?

Thanks in advance, and apologies if I have said or asked anything dumb.

tacpot12

You've not said or asked anything dumb! Well done for getting to this point. I don't have any recommemdations myself but others will be along to comment. I would have say that you want global growth fund that primarily holds equities, you want low charges for your initial investment and for your regular investments. You might supplement this with other funds if you want some more investment to be uk based or focused on specific sectors or sizes of companies.

AnotherJoe

Alternatives to VLS are any low cost global trackers that dont have an artificial bias to the UK. There are quite a few mentioned here from time to time, HMWO is one i have but there are many others, there is a Vanguard one, Legal & General, etc.

xylophone

Would a Vanguard ISA suit?

https://www.vanguardinvestor.co.uk/investing-explained/stocks-shares-isa

http://monevator.com/vanguard-direct-uk/

http://monevator.com/using-vanguard-lifestrategy-funds-life/

You could invest the £20,000 for this tax year.

With regard to the £100 a month, you might save and use the funds to make your ISA contribution in the next tax year.


Have you ever had a Nationwide Flexdirect current account ?

https://www.nationwide.co.uk/products/current-accounts/flexdirect/features-and-benefits

There is also a Flex regular saver.

Alexland

xylophone wrote: »

Would a Vanguard ISA suit?

Rather than paying the Vanguard Investor 0.15% platform fee (initially £30 pa for the lump sum) the OP might as well go for the Halifax Share Dealing at a fixed £12.50 per year and £2 per scheduled regular trade. The year 1 costs would be £12.50 platform + £12.50 for a £20k adhoc trade so cheaper than Vanguard Investor.

Alex.

System

AnotherJoe wrote: »

Alternatives to VLS are any low cost global trackers that dont have an artificial bias to the UK.

Never understood this comment. Most of the VLS UK investing is in companies that make their money globally. And when you invest almost or all outside the UK you're massively exposed to currency values so a strong pound can see your fund tank in value as shares priced in Euros or Dollars are worth less in GBP, a weak one can see it rise.

WeWereOnABreak

Thanks for all the replies!

Yes I already have all the top recommended savings/current accounts including Nationwide FlexDirect and regular saver.

I’ve paid into an ISA already this year so unless there is a good alternative for the Vanguard LifeStrategy funds it might be better for me to hold off until next year to get the benefit of investing within an ISA wrapper (thanks for the suggestion!).

I’d read that the VLS is quite global, so what might be some good UK-focused funds to balance against?

mije1983

WeWereOnABreak wrote: »

I’ve paid into an ISA already this year

Do you mean another S&S ISA, or that you have used up your £20k allowance for this tax year? If you have done neither of those, you can still open a new (or first) S&S ISA.

Audaxer

WeWereOnABreak wrote: »

I’d read that the VLS is quite global, so what might be some good UK-focused funds to balance against?

VLS already includes quite a lot of UK equity. Nothing wrong with that, but unusual for someone to look for more UK equity. I was thinking of balancing my VLS with HSBC Global Strategy which has a lot less UK equity.

ValiantSon

WeWereOnABreak wrote: »

Thanks for all the replies!

Yes I already have all the top recommended savings/current accounts including Nationwide FlexDirect and regular saver.

I’ve paid into an ISA already this year so unless there is a good alternative for the Vanguard LifeStrategy funds it might be better for me to hold off until next year to get the benefit of investing within an ISA wrapper (thanks for the suggestion!).

I’d read that the VLS is quite global, so what might be some good UK-focused funds to balance against?

If you buy VLS then you don't need to buy any additional UK-focused funds. Furthermore, given that your investment sum is relatively small, you'd be best off picking one multi-asset fund and sticking with it for the time being, otherwise you will be unnecessarily increasing your costs for no real gain. When your investment sum gets to around £50,000 then you might want to look again (but even then it isn't necessary).

I'd second Alex's suggestion for using Halifax for this year's ISA. Deposit the full £20,000 and make one purchase with it. For the next year you could open a Vanguard ISA and make regular monthly contributions of £100. This gives you the cheapest fees possible for both years, and you won't need to look for an alternative platform for quite some time given that Vanguard only charge 0.15% and not other fees.


If you have only subscribed to a cash ISA this year, then that is no problem. Transfer it to Halifax and then top it up to the total £20,000 (assuming it is not already at that level) and then buy one fund with that money.

Alternative multi-asset funds that you might want to look at are HSBC Global Strategy; L&G Multi Index; Blackrock Consensus.

WeWereOnABreak

mije1983 wrote: »

Do you mean another S&S ISA, or that you have used up your £20k allowance for this tax year? If you have done neither of those, you can still open a new (or first) S&S ISA.

Can I open a LISA to purchase VLS100? I don’t have one of these yet (didn’t make much financial sense before now as I hadn’t maximised other options e.g. employer pension contributions) and I’ve already paid into a s&s ISA this year. Still have some allowance left, so this might be a potential solution rather than waiting until next year as I originally thought.