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Easy two fund portfolio

henryandmay
henryandmay Posts: 54 Forumite
Second Anniversary 10 Posts
in Savings & investments
Hi

I want to start investing £300 per month into an S&S isa as I have now exhausted all bank and saving account options ( nationwide, tesco etc).

To keep things simple and cost down, I want to only invest in two index funds.
My thinking is;
70% in a world index fund ex UK
30% in a FTSE all share index fund

My appetite to risk is 4/5 so medium to high as my outlook is 10 to 15 years.

Would you say the above sounds ok?

Thanks
«13

Comments

  • geeovana
    geeovana Posts: 91 Forumite
    Why would you want to skew your portfolio 30% towards the UK, when in reality the UK makes up only around 6% of the total global market cap?
  • henryandmay
    henryandmay Posts: 54 Forumite
    Second Anniversary 10 Posts
    geeovana wrote: »
    Why would you want to skew your portfolio 30% towards the UK, when in reality the UK makes up only around 6% of the total global market cap?

    Home bias I guess. so go 6% into FTSE?
  • eskbanker
    eskbanker Posts: 39,770 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Why not just go for one low-cost global multi-asset fund?
  • henryandmay
    henryandmay Posts: 54 Forumite
    Second Anniversary 10 Posts
    eskbanker wrote: »
    Why not just go for one low-cost global multi-asset fund?

    Ok. Please can you provide further info and a suggestion on funds?
  • geeovana
    geeovana Posts: 91 Forumite
    eskbanker wrote: »
    Why not just go for one low-cost global multi-asset fund?



    As above. A quick search on here should show multiple posts on the same subject.


    Funds such as the FTSE Global All-Cap Index etc. There are many alternative so do a little research. You won't have to worry about re-balancing this way either.
  • geeovana
    geeovana Posts: 91 Forumite
    Your also missing a vital ingredient - Bonds.


    To what extent and at what point you add these to your portfolio is up for debate. There will be some much wiser investors along soon with more information.
  • eskbanker
    eskbanker Posts: 39,770 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    henryandmay wrote: »
    Ok. Please can you provide further info and a suggestion on funds?
    The most frequently suggested options on here are typically Vanguard LifeStrategy, HSBC Global Strategy, L&G Multi-Index and Blackrock Consensus, but others are available.

    This recent thread goes into a bit more detail: https://forums.moneysavingexpert.com/discussion/5879942/multi-asset-funds-differences
  • aroominyork
    aroominyork Posts: 3,762 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    edited 13 August 2018 at 11:47AM
    henryandmay wrote: »
    Home bias I guess. so go 6% into FTSE?
    There is nothing wrong with home bias. It is absolutely your choice. Most IFAs will invest for their clients with a home bias, and Vanguard LifeStrategy - one of the most popular index funds - is 22% UK. Vanguard's All Cap is 6% UK. You pays your money and you takes your choice.
  • geeovana
    geeovana Posts: 91 Forumite
    aroominyork wrote: »
    There is nothing wrong with home bias. It is absolutely your choice. Most IFAs will invest for their clients with a home bias, and Vanguard LifeStrategy - one of the most popular index funds - is 22% UK. Vanguard's All Cap is 6% UK. You pays your money and you takes your choice.


    Is this not a little misleading? The OP clearly doesn't have a lot of insight and I was trying to steer them towards an understanding of global market capitalisation. What benefit would a home bias of 30% give? Perhaps reduced volatility due to currency fluctuation, however they should really be understanding why they want a home bias, rather than just on a whim because its their money.
  • System
    System Posts: 178,410 Community Admin
    10,000 Posts Photogenic Name Dropper
    aroominyork wrote: »
    There is nothing wrong with home bias.
    Home bias reduces the benefits from global diversification:
    https://en.wikipedia.org/wiki/Equity_home_bias_puzzle
    This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com
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