How many funds in a portfolio?

ColdIron

newbinvestor wrote: »

It's not clear but you are probably right. I thought if VLS60 holds Vanguard SP500 for example, you would pay the charges of both funds.

Lifestrategy and the underlying trackers are all Vanguard funds, they can structure their fees as they wish. Think of a Waitrose mixed salad. Waitrose sell lettuce, tomatoes etc and will charge a markup if you buy these individually. However if you buy a mixed salad they won't charge you those markups and an addition markup for buying it all in one box, it might even be cheaper. If Waitrose sold a salad with lettuce they bought from a Tesco store and tomatoes from an Aldi store things would be different but that's not how Waitrose or Vanguard operate

DrSyn

Linton wrote: »

However if you are retired, needing well diversified inflation linked income for on going expenditure, medium term (since the very long term is not so much an issue ) inflation protection, and some reassurance that in the event of a serious crash one wont be left comparatively destitute, then investing becomes rather more complex. A strategy based on believing choosing the xx in VLSxx is the only investment decision one ever needs make would be totally inadequate.

I would not call this your average investor.

I agree in this situation, when you need money to pay the bills it would not make sense to chose a fund paying the low yield that VLSxx has.

bowlhead99

newbinvestor wrote: »

It's not clear but you are probably right. I thought if VLS60 holds Vanguard SP500 for example, you would pay the charges of both funds.

When they advertise an ongoing charge figure for their fund-of-funds product it includes the ongoing charges of the other open-ended collective investment schemes in which they invest - that's how the disclosure standards work.

So, the fund fact sheets don't say e.g. '0.22% of which underlying fund is x and top level fund is y ' because it is generally understood that OCF just includes both.

bostonerimus

newbinvestor wrote: »

It's not clear but you are probably right. I thought if VLS60 holds Vanguard SP500 for example, you would pay the charges of both funds.

No, you just pay a single fee for VLSxx. The fee will probably be higher than many of the funds owned as you pay a bit of a premium for Vanguard's work to assemble the funds and rebalance them.

Apodemus

ColdIron wrote: »

Lifestrategy and the underlying trackers are all Vanguard funds, they can structure their fees as they wish. Think of a Waitrose mixed salad. Waitrose sell lettuce, tomatoes etc and will charge a markup if you buy these individually. However if you buy a mixed salad they won't charge you those markups and an addition markup for buying it all in one box, it might even be cheaper. If Waitrose sold a salad with lettuce they bought from a Tesco store and tomatoes from an Aldi store things would be different but that's not how Waitrose or Vanguard operate

I’ve not done the maths recently, but last time I checked, the supermarkets were charging quite a premium for the convenience of choosing a mixed salad rather than individual ingredients! It’s always fun comparing the prices of the same basic foodstuffs in slightly different forms in different parts of the store! For example, Tesco used to sell dates in three different aisles at vastly different prices, depending on whether they were in the baking aisle, the natural foods aisle or the snacking aisle. Not sure how this analogy works for Vanguard, though!

OldMusicGuy

I'm definitely an average investor and I have a large DC pot spread over 3 multi-asset funds. So I'm actually investing in multiple underlying funds.

I started off with an advised portfolio of around 17 funds but the more I read about passive investing I realised that was not for me.

The issue we see a lot on here is that a lot of DIY investors end up with a ragbag of funds because they just accumulate them over time and often there isn't a clear strategy behind them. My adviser put together a portfolio of single sector funds with a clear strategy behind them but I realised that for me, a cheaper, simpler portfolio of multi-asset funds was a much better fit for my goals and investing style.

Apodemus wrote: »

I’ve not done the maths recently, but last time I checked, the supermarkets were charging quite a premium for the convenience of choosing a mixed salad rather than individual ingredients! It’s always fun comparing the prices of the same basic foodstuffs in slightly different forms in different parts of the store! For example, Tesco used to sell dates in three different aisles at vastly different prices, depending on whether they were in the baking aisle, the natural foods aisle or the snacking aisle. Not sure how this analogy works for Vanguard, though!

I don't think the analogy works well for Vanguard. However, IMO it does work well for the like of the HL Multi Manager funds, which are best avoided.

Prism

My wife and I treat our ISA's as a joint pool. Across them all we have 2 global funds, 2 smaller company global fund, 1 emerging markets fund and 2 global bond funds. I could probably make do with just 4 if pushed to it.

MK62

You can have as many or as few funds as you wish - there is no right or wrong answer really.
Obviously the more you have, the more work it becomes, but that's up to each individual.
Account operating costs might be a factor too but that can depend on the platforms/accounts being used and the type of investments.

You can diversify across platforms and fund houses, as well as asset classes, sectors, regions etc etc.... for instance, you might decide no more than 5% (for example) exposure to any single fund, fund house, or manager - that would mean a minimum of 20 funds, maybe more......

As long as your overall portfolio matches up with your desired goals, I really wouldn't worry too much about the actual number of investments (within reason of course).
Some can match their goals with a single fund......others, with different goals, might need/want more.....

It's a bit like asking how many bank/building society accounts you need......

londoninvestor

ColdIron wrote: »

Lifestrategy and the underlying trackers are all Vanguard funds, they can structure their fees as they wish. Think of a Waitrose mixed salad. Waitrose sell lettuce, tomatoes etc and will charge a markup if you buy these individually. However if you buy a mixed salad they won't charge you those markups and an addition markup for buying it all in one box, it might even be cheaper.

Exactly. If the price on the shelf says the mixed salad is £1.99, then what you pay is £1.99.

They don't weigh the tomatoes, avocado and cucumber, charge you for them by weight and then add the £1.99 onto that.

Just in case we needed more salad analogy ;-)

Gadfium

Apodemus wrote: »

It’s always fun comparing the prices of the same basic foodstuffs in slightly different forms in different parts of the store!

The hours must fly by in your house.....:p;)