World Index Tracker

Fortean_Investor

I'm looking at putting money into some funds and world index trackers (especially a couple of Vanguard ones) seem to be performing pretty well. If I had £250K to invest how would it be best to spread that - how many funds and which ones? Any others rather than Vanguard?

Would it be possible to turn that £350K into £750K in 10 years if I reinvested everything I earned from them and added in £500 a month into other investments? Appreciate it's a steep target

Evesham_Hardcore

Sounds like a big broad question!

double in 10 years sounds possible with risk - look at the last 10 years and see if it could have happened.

you'd need 7% average, compounded, to get 350k > 688k

Prism

Thats about a 6.5% per year increase. Assuming around 2% of that is from reinvested dividends (easy enough to do with an acc fund) that means a 4.5% growth. Possible but certainly not guaranteed. Best not to have a fixed target when it comes to equities.

dunstonh

If I had £250K to invest how would it be best to spread that

You probably wouldn't want just one fund. It would give you less control over managing your CGT allowances.

how many funds and which ones?

I would go with a bespoke portfolio of single sector funds with that amount. a) for CGT control and b) as one fund house will not be the best in every area.

Also, as a new investor, do you really have that high a risk profile to go 100% into global equity?

Would it be possible to turn that £350K into £750K in 10 years if I reinvested everything I earned from them and added in £500 a month into other investments? Appreciate it's a steep target

It is within the ballpark of likely outcomes. However, that is a big ballpark.

Fortean_Investor

So if I wanted to double that £350K in ten years is there a better way to do it? How would you spread the money around rather than the tracker I talked about?

dunstonh

Fortean_Investor wrote: »

So if I wanted to double that £350K in ten years is there a better way to do it? How would you spread the money around rather than the tracker I talked about?

There would be people who would invest 100% into a single global tracker. I wouldn't with that amount as
a) I don't have the risk profile to invest that high up the scale.
b) CGT would be harder to control (as I mentioned).
c) I prefer hybrid investing (mix of active and passive rather than be biased to one or the other).
d) linked to risk profile, it wouldnt cover the asset classes I would need in my portfolio.


its a lot of money to put at such a high risk level and its unusual for an experienced investor with that sort of amount to do it. Let alone a new investor. Are you happy to lose half its value during downturns?

i.e. you may hit £700k and then within weeks/months find yourself around £375k.

bostonerimus

Fortean_Investor wrote: »

So if I wanted to double that £350K in ten years is there a better way to do it? How would you spread the money around rather than the tracker I talked about?

Do some research about asset allocation. You might think about a global tracker and then compliment it with some bond, property or sector trackers. You should also look at actively managed funds and see if you think stock picking, the higher fees and returns that don't track an index fit into your portfolio. Also you haven't told us whether you intend to use your ISA and pension allowances to invest this money

coastline

You could invest some of the cash in a pension plan as you can withdraw money from 55 yo at the moment.

https://www.moneyadviceservice.org.uk/en/articles/tax-relief-on-pension-contributions

In the link below you can look at past history of the MSCI World Index which is a common benchmark for the global market . Changing the timescale will give you an idea of volatility during different periods all the way back to 1975.You can also add other sectors and regions for comparison.

https://www2.trustnet.com/Tools/Charting.aspx?typeCode=NM990100

https://en.wikipedia.org/wiki/MSCI_World

Thrugelmir

Fortean_Investor wrote: »

So if I wanted to double that £350K in ten years is there a better way to do it? How would you spread the money around rather than the tracker I talked about?

Identify the next Fevertree. Cannot envisage the likes of the FAANGs doubling in market capitlisation in the next 10 years.

rathernot

I do a lot of playing with Trustnet portfolios and whilst you're always looking at the past, it's amazing how many very conservative portfolios have averaged 7% over the last 10 years.

I know, it's not indicative of the future, but you have to start somewhere with trying to identify options if you're not going to go the tracker route.