My First S&S ISA - Are these sensible fund choices/platform?

MayhemMoney

ColdIron said:

The Lifestrategy gives pretty good diversification but I can't see the point of the three index trackers as they are already covered by your VLS and are just duplicating what is already there. Have you deliberately chosen to overweight those 3 indexes? Remember they will dilute the VLS holdings in Europe, Japan, Emerging Markets, Asia Pacific etc. Was this your intention? Hard to comment on the ETF, vanguard do many ETFs but given it is over a quarter of your holdings does it duplicate parts of the VLS or cover different sectors?

For smaller sums and regular purchases you want a percentage fee provider and Cavendish fits that bill, but if you were happy to just hold only Vanguard funds (perhaps just the VLS100) then Vanguard Investor would be a little cheaper

The reason I done that was because at the time those indexes had been hit hard and thought they would offer good growth in years to come, perhaps it's just patriotism thinking the UK is going to be growing in years to come post covid post brexit. 
Now they have recovered would you suggest I switch more over to the VLS, which I have done a bit already. (I got worried when Mr Johnson was sick thinking oh crap what if he dies, actually regret switching them as the others have grown more since lol!). 

Thank you for confirming the platform being fit for purpose. 

The additional vanguard fund on the regular saver is:

Vanguard FTSE All-World UCITS ETF (VWRL)

MayhemMoney

dunstonh said:

The allocations look like someone who thinks they are better than Vanguard in respect of their chosen asset allocations.    That is quite possible but the amounts allocated look a bit random rather than a traditional core and satellite approach.

What was in my mind was 'I'll buy some ftse/s&p500 indexes now with initial capital as they look like good buys then have a regular saver buy mainly diverse vanguard funds to drip feed for years and years'
But this is all new to me and happy to take on feedback to alter how I hold things/set up regular saver 

MayhemMoney

Username999 said:

LS100 already has S&P 500, FTSE 100 and FTSE 250:

4th Vanguard S&P 500 UCITS ETF 13.10%
8th Vanguard FTSE 100 UCITS ETF 4.70%
10th Vanguard FTSE 250 UCITS ETF 0.80%

Nothing wrong with your selections you are just weighting the allocations differently.

thank you for confirming there isn't anything wrong with the selected funds.
yes i've weighted the UK/US more heavily, mainly just because they looked like good buys at the time. 

Alistair31

In my opinion you would do well to stick with just one diverse fund. The Lifestrategy fund you have chosen would be appropriate I think and it gives you decent exposure to FTSE and S&P500, along with much else. 

Alexland

If I was going 100% equity on Cavendish then I would just buy the HSBC FTSE All World index accumulation fund which has a lower ongoing cost than the Vanguard FTSE All World ETF (also won't you being paying ETF trade fees on Cavendish?) and doesn't have the unfortunate UK bias of the VLS100 fund.

Still it would be slightly cheaper to hold the Vanguard FTSE Global All Cap fund on Vanguard Investor as the platform saving would outweigh the higher fund cost.

But if you keep chucking in occasional £5k lump sums then iWeb will become cheaper soon as your account valuation will outgrow percentage based platform fees and it will be cheaper to pay fixed trade costs. Again on iWeb then I would prefer the HSBC fund over Vanguard.

ColdIron

MayhemMoney said:

ColdIron said:

The Lifestrategy gives pretty good diversification but I can't see the point of the three index trackers as they are already covered by your VLS and are just duplicating what is already there. Have you deliberately chosen to overweight those 3 indexes? Remember they will dilute the VLS holdings in Europe, Japan, Emerging Markets, Asia Pacific etc. Was this your intention? Hard to comment on the ETF, vanguard do many ETFs but given it is over a quarter of your holdings does it duplicate parts of the VLS or cover different sectors?

For smaller sums and regular purchases you want a percentage fee provider and Cavendish fits that bill, but if you were happy to just hold only Vanguard funds (perhaps just the VLS100) then Vanguard Investor would be a little cheaper

The reason I done that was because at the time those indexes had been hit hard and thought they would offer good growth in years to come, perhaps it's just patriotism thinking the UK is going to be growing in years to come post covid post brexit.

 Most geographies have been hit due to the widespread nature of the sell off and will all recover to a greater or lesser degree. The US and UK are not unique in that respect. Invest with your head and not your heart

MayhemMoney said:

Now they have recovered would you suggest I switch more over to the VLS, which I have done a bit already. (I got worried when Mr Johnson was sick thinking oh crap what if he dies, actually regret switching them as the others have grown more since lol!).

Nothing has recovered yet, just risen from the lowest point, there may yet be another fall. Personally I would just use a single fund such as the VLS. It is a professionally built portfolio with specific objectives that rebalances frequently to maintain its allocation. Something you would need to do yourself

MayhemMoney said:

The additional vanguard fund on the regular saver is:

Vanguard FTSE All-World UCITS ETF (VWRL)

There is a terrific degree of overlap between this and the VLS100. Perhaps the biggest difference (apart from being an ETF) is that it tracks the FTSE All-World Index so that its allocations match the market capitalisations of the component companies. The VLS is not an index tracker (though it is comprised of several separate trackers) and has been tailored by Vanguard to match what they think would suit a UK investor. For instance it has ~22% UK instead of ~5% and ~43% US instead of ~53%. Some people would prefer a purer focus and match global markets, while for others it makes sense to overweight UK companies if you are resident in the UK. There is no right answer, a lot of investing is about opinion and matching objectives. It's worth noting that your VLS is the Accumulation class while VWRL is distributing , so you would need to reinvest the dividends although you could use some of them to pay the Cavendish fees

I don't know Cavendish's pricing in detail but would be pretty confident that it charges a fee to purchase ETFs  while funds are free, although it may be reduced if you use a monthly investment plan. Bear it in mind but it is a secondary concern to choosing the appropriate investment

MayhemMoney

Alexland said:

If I was going 100% equity on Cavendish then I would just buy the HSBC FTSE All World index accumulation fund which has a lower ongoing cost than the Vanguard FTSE All World ETF (also won't you being paying ETF trade fees on Cavendish?) and doesn't have the unfortunate UK bias of the VLS100 fund.

Still it would be slightly cheaper to hold the Vanguard FTSE Global All Cap fund on Vanguard Investor as the platform saving would outweigh the higher fund cost.

But if you keep chucking in occasional £5k lump sums then iWeb will become cheaper soon as your account valuation will outgrow percentage based platform fees and it will be cheaper to pay fixed trade costs. Again on iWeb then I would prefer the HSBC fund over Vanguard.

OK thank you I'll switch the regular saver from vanguard all world to hsbc ftse all world to save on fees. 
In fact I may make it my sole regular saver.
Do you know roughly at what point it'll be cheaper to switch over to iWeb? I plan on continually putting chunks in (holding back at the moment as I was buying a house as covid19 stopped everything so holding back more than the original deposit just in case anything unexpected happens such as requiring a higher deposit for different LTV mortgage. as well as my separate emergency fund, when things are more certain again I may slightly reduce the emergency fund into stocks as emergency fund is about a years living at the moment I wouldnt mind reducing it to 6-9 months living costs). I run a one man business and expect the recession to impact my earnings so at the moment keeping cash high. 

I guess the bias of VLS to UK being unfortunate is an opinion more than a fact? If it makes a difference I've just turned 26 and plan to keep these funds forever into retirement unless I want to invest in a new business or real estate in the future and sell funds for that.

kuratowski

MayhemMoney said:

I guess the bias of VLS to UK being unfortunate is an opinion more than a fact? 

The bias itself is a fact.  The UK represents about 6% of the global stock market on a market cap basis.  However VLS's allocation is 25% UK equities, therefore VLS is overweight the UK (this is Vanguard's marketing towards the typical UK investor- who are more interested in the UK, than they are in the rest of the world).

Whether this bias is unfortunate or not, is maybe more of an opinion.

Alexland

MayhemMoney said:

OK thank you I'll switch the regular saver from vanguard all world to hsbc ftse all world to save on fees. 
In fact I may make it my sole regular saver.

I don't really understand why you are investing your new regular contributions differently to your existing or lump sum contributions? Surely at any one time there is an asset allocation that you feel is suitable regardless of when or how the money was added into the account?

Do you know roughly at what point it'll be cheaper to switch over to iWeb?

The break-even point is when 0.25% (assuming you stick to funds and don't incur exchange trade assert dealing fees) on your account balance is more expensive than £25 setup and £5 per trade. iWeb is good for those of us that minimise trading such as holding a single fund. For example a Cavendish balance of £25,000 at 0.25% would be £62.50 pa compared to 12 trades on iWeb at £60. However if you get into a very disciplined monthly pattern then Halifax Share Dealing can be even cheaper at £12.50 pa and £2 per scheduled regular trade so £36.50 pa.

I guess the bias of VLS to UK being unfortunate is an opinion more than a fact?

Well the Trustnet Charting Tool only has comparable data going back to 1994 but shows with dividend reinvestment the FTSE100 has returned just over 300% compared to the FTSE World index returning over 600%. Although to be fair most of that divergence has been in the past 6 years. However if you want a depressing evening then just browse the list of UK large caps and think about their future prospects.

MayhemMoney

OK I made HSBC FTSE All World Index Fund Acc my monthly saver, shall I switch the other indexes I hold all into the same fund too?