Getting started.

interestedalex

Hello.
Firstly, thank you all for creating such a great online resource. I've lurked and read a fair bit for a while now and am now ready to start an investment strategy. I was hoping to get some feedback before starting. Here's my basic information:

-Looking to invest a lump sum of about 400k GBP for 15 years minimum. Have no mortgage or debts. I am looking for capital growth. I will be able to feed about 3k per month on top of the 400k.

-I live in the EU but due to my residency status, I do not have to pay capital gains tax whilst I live where I live. This will be for another 5 years aprox. When I make the next move, I'll reassess my tax situation.

-I've opened an account with the online broker Degiro due to low costs and fairly good reviews.

-Am looking for a low maintenance passive ETF mix, the obvious choice being Vanguard LS. I saw no reason for not going for full equity since I don't foresee being forced to sell at a bad time. I am signed up with Degiro Ireland, but they don't seem to offer Vanguard LS. Will call them to see if it's available.

-I would say I have a moderate risk profile. Not looking to get rich quick, but to beat inflation.

My questions are the following:
1. Would you suggest any other strategies? Go with more than one broker? Mix passive and active (am tempted by the googledoc on this forum showing good growth in active funds).
2. My funds are in GBP. Some of the ETFs are in euros and USD. Should I look for GBP initially, or does it not matter than much?
3. Would you recommend diversifying amongst a few EFTs? What would you recommend as a good global spread?
4. With recent volatility, would it make sense to drip 50k per month?

Happy to answer any other questions.
Thanks in advance!

masonic

interestedalex said:

-Am looking for a low maintenance passive ETF mix, the obvious choice being Vanguard LS. I saw no reason for not going for full equity since I don't foresee being forced to sell at a bad time. I am signed up with Degiro Ireland, but they don't seem to offer Vanguard LS. Will call them to see if it's available.

Vanguard LS is not available as an ETF. You would need a funds platform to invest in this, not a broker.

An example of a cheap funds provider is iWeb (part of Halifax Sharedealing), which has a one-off £25 account opening fee, and a £5 trading fee, but no ongoing fees other than those trading fees. You could use http://comparefundplatforms.com/ to get some other ideas.

interestedalex said:

My questions are the following:
1. Would you suggest any other strategies? Go with more than one broker? Mix passive and active (am tempted by the googledoc on this forum showing good growth in active funds).

Personally, I'd probably split £400k between two investment providers, but it isn't necessary and will add extra costs.

interestedalex said:

2. My funds are in GBP. Some of the ETFs are in euros and USD. Should I look for GBP initially, or does it not matter than much?

This is one of the complexities of ETFs that makes them unsuitable for beginners. But it seems unlikely you would actually want to invest in ETFs given your preference for Vanguard LS.

interestedalex said:

3. Would you recommend diversifying amongst a few EFTs? What would you recommend as a good global spread?

If you invest in a good quality multi-asset fund, then it would not be necessary to diversify any further. However, some like to split their money between a couple of similar funds from different providers, or invest in satellite funds giving exposure to areas not included in their multi-asset fund.

interestedalex said:

4. With recent volatility, would it make sense to drip 50k per month?

You are statistically most likely to achieve the best outcome by investing the lump sum. Given the recent falls, you are fortunate not to be in the position of investing when markets are at a high. However, you need to consider your psychological reaction if you were to invest and then see markets fall another 10% the following week.

interestedalex

Hi Masonic. Thank you for your reply.

I'd looked at iWeb in the past, but I think you have to be a UK resident to set up with them. I'll look for a trading platform on the link you posted.

Am interested in what you'd think the best beginners strategy would be. Would you recommend an IFA? Given I'm looking for something simple (global passive) and low cost, I was hoping to set up myself. I only mentioned Vanguard LS because so much I've read points towards that as a good simple one stop shop. Am absolutely open to other possibilities. You mention a 'good multi asset fund', any good resources you'd recommend to read up on a good one?

I'd like to think I'll be pretty calm if the market falls. All I'd be interested in is my entry price and my exit price in the future.

Thank you again!

masonic

interestedalex said:

Am interested in what you'd think the best beginners strategy would be. Would you recommend an IFA? Given I'm looking for something simple (global passive) and low cost, I was hoping to set up myself. I only mentioned Vanguard LS because so much I've read points towards that as a good simple one stop shop. Am absolutely open to other possibilities. You mention a 'good multi asset fund', any good resources you'd recommend to read up on a good one?

Using an IFA is certainly an option to consider. But the simple passive option you describe is a sensible approach and is quite easy to DIY.

One feature of Vanguard LS is that it has significant UK bias, which some (including myself) dislike, and might not be suitable for your circumstances if you are living outside the UK longer term. Some alternatives that come recommended on here are L&G Multi-index (which has some property exposure), Blackrock Consensus and HSBC Global Strategy (which has a more unbiased global asset allocation). It would be worth looking these up on Trustnet and examining the asset allocation so you see how they compare.

If you struggle to fund a UK funds platform that will accept you as a customer, you can achieve something similar with a couple of ETFs, e.g. VWRL and a hedged global bond ETF such as VAGP. Again the GBP hedging might not suit your circumstances, but there are unhedged alternatives. Blackrock also run a series of cheap 'Core' ETFs under their iShares brand. So there are quite a few options.

Looping back to your question about ETF currencies, you might find these two posts useful:

https://forums.moneysavingexpert.com/discussion/comment/76011927/#Comment_76011927

https://forums.moneysavingexpert.com/discussion/comment/76284049/#Comment_76284049

interestedalex

Sorry for the delay in responding.

Thank you again for the time and thought you've put into answering me. I really appreciate it and have been doing some further reading. Will now get started!