Is this fund diversified enough?

w00519772

I currently have a few thousand pounds invested in this fund: https://www.trustnet.com/factsheets/o/acdt/vanguard-lifestrategy-80-equity. I am aware that it is a higher risk fund because 80% is invested in equities and I accept this.

I have 20% of my money invested in this and the other 80% is cash. Say I wanted to move more of the cash to the fund. Is the fund diversified enough? The research I have done tells me that I should be investing in 10+ funds. However, with the fund above I notice from the factsheet that:

1) The fund invests in assets over the world e.g. America, Japan, UK etc.

2) The fund invests in a number of funds e.g. VANGUARD US EQUITY INDEX A

Is this classified as a diversified fund? I am trying to understand exactly what people mean when they say diversified.

AnotherJoe

At root, its invested in literally thousands of companies. At a guess 3-4,000. Thats diversified enough.
Whatever research that said you shoudl be invested in 10+ funds is, err, how can i put this, oh yes, wrong. Did you mean companies? Got the source?

bowlhead99

The 80% equity fund does itself already invest in ten+ funds. Those funds in which it invests are each specialist Vanguard index funds which hold shares in different regions around the world, and in a number of types of bonds. As Joe says, you get exposure to shares and bonds from several thousand companies, and to various types of government bonds too.

If you are only investing 'a few thousand' and want to put some more in, there is not a lot of point tying yourself up in knots about what other funds you could buy instead. The fund is fine ; there are plenty of other funds with a broadly similar level of risk that would have been fine too, but you don't need to mess around buying multiple separate funds when you are talking about £5,000 rather than £50,000 or £500,000.

DrSyn

w00519772 wrote: »

The research I have done tells me that I should be investing in 10+ funds.

Can you quote the source that says it should be +10 funds?

Do you mean companies?

Have you actually read the info about VLS on the Vanguard website?
https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds?intcmpgn=lifestrategyfunds_learnmore_link

There are number of low cost, well diversified global muti-asset funds and VLS is one of them. It is used by many. Did you know that Vanguard is actually owned by its fund holders?


If it sets your mind at rest, the site below shows the portfolio fund construction suggest by some well known professionals. You will find you do not need +10 funds:-

https://portfoliocharts.com/portfolios/