A good balance of funds within my Vanguard account

dllive

@bowlhead99 : Its posters like you that keep me coming back to these forums. Thanks so much. Im now much clearer in the direction I think I need to go.

A_T

bowlhead99 wrote: »

That L&G fund tracks the FTSE World (ex UK) Index. The same index which is being tracked by the "FTSE Developed World ex-U.K. Equity Index Fund" offered by Vanguard, which dllive already owns. So it doesn't improve or change the portfolio for the better.

There's a slight difference in that the Vanguard fund tracks a Developed-only index whereas the L&G includes some of what FTSE regards as emerging markets including Taiwan and Brazil.

bowlhead99

A_T wrote: »

There's a slight difference in that the Vanguard fund tracks a Developed-only index whereas the L&G includes some of what FTSE regards as emerging markets including Taiwan and Brazil.

Yes that's true. I'd originally written 'basically the same' rather than 'the same', and then edited as I prefer to avoid using 'basically' but forgot to replace with some other filler word.

The FTSE World contains FTSE's 'developed' and 'advanced emerging' country indices. The 'FTSE developed' bit represents $44.3 trillion out of $46.2tn free float market cap in the FTSE World, so 96% of it is the same data set.

But if the purpose of adding that ex-UK fund is simply to dilute a perceived high concentration of UK companies that you get in the LifeStrategy, there's not a lot of reason to ignore markets like China and India which are in the Emerging part of the LifeStrategy fund but don't qualify as 'advanced emerging'. The FTSE All-World is more comprehensive than the World as it includes the other Emerging markets, while the FTSE Global All Cap is more comprehensive still, including developed and emerging markets and smaller companies.

I say 'not a lot of reason'... though it is more expensive to track a more comprehensive index, and Vanguard's version of the All-World and Global All-Cap cost about 0.1% more per year than their simple 'Developed ex-UK'. But as they're not really any more expensive per pound invested than the LifeStrategy I wouldn't worry about it too much. The extra fees are unlikely to change your retirement date. But going with the Small Cap seems like a better solution than either of them anyway, if you're set on 100% equity and using Vanguard products, IMHO.

bostonerimus

SonOf wrote: »

There is more to life than Vanguard and Vanguard do not have the best options in every area. So, do not restrict your choice to Vanguard only. HSBC and iShares for example.

There are lots of very good fund companies with good funds and they all have enough choice for you to create a perfectly good portfolio. There are thousands of funds and an awful lot of duplication between them so come up with an asset allocation appropriate to your circumstances and implement it in a straight forward way using a few inexpensive funds.

SonOf

bostonerimus wrote: »

There are lots of very good fund companies with good funds and they all have enough choice for you to create a perfectly good portfolio. There are thousands of funds and an awful lot of duplication between them so come up with an asset allocation appropriate to your circumstances and implement it in a straight forward way using a few inexpensive funds.

I cannot argue with any of that. However, Vanguard is not the answer in every area. All I am saying is that do not restrict yourself to Vanguard as there is more available that can be better (for reference, of the index trackers in my portfolio, 3 are Vanguard, 2 are HSBC and one is iShares - and 5 managed)

bostonerimus

SonOf wrote: »

I cannot argue with any of that. However, Vanguard is not the answer in every area. All I am saying is that do not restrict yourself to Vanguard as there is more available that can be better (for reference, of the index trackers in my portfolio, 3 are Vanguard, 2 are HSBC and one is iShares - and 5 managed)

I don't believe there's any practical restriction on financial success by staying within Vanguard, iShares or HSBC etc. for the vast majority of investors.

dllive

OK, after much deliberation I have decided to squirrel away £1,666 per month (but if the markets are doing especially badly one month I will put a bit more in). Ill divert £1,332 into LifeStrategy 100% and £334 in Global Small Cap.
In 25 years I will post back here and let you know how it went.

quirkydeptless

dllive wrote: »

In 25 years I will post back here and let you know how it went.

We'll be waiting