VLS100 and 60

btcp

If you blend VLS100 and VLS60 50x50 does  it simply gives you VLS80? I first thought if I have both, I balance risk. But if I get one VLS80 it should give me the same result, right? 

daveyjp

More or less,  there is certainly little point having two different risk levels of VLS.

You decide the risk you want and invest accordingly.

jaybeetoo

You'll have to rebalance them every so often as they will grow (hopefully) at different rates.

btcp

daveyjp said:

More or less,  there is certainly little point having two different risk levels of VLS.

You decide the risk you want and invest accordingly.

That’s what I thought. It’s my first year investing so took me a little bit of time to start questioning why I bought initially. Especially reading about people who have diversified portfolio 

bowlhead99

btcp said:
That’s what I thought. It’s my first year investing so took me a little bit of time to start questioning why I bought initially. Especially reading about people who have diversified portfolio 

The VLS 80 is already a diversified portfolio in one product. It has more money invested into equity funds than VLS 60% Equity, but less than VLS 100% Equity:

As at date 30 Apr 2020:

Vanguard FTSE U.K. All Share Index Unit Trust 19.5%

Vanguard U.S. Equity Index Fund 19.4%

Vanguard FTSE Developed World ex-U.K. Equity Index Fund 19.2%

Vanguard Global Bond Index Fund 14.0%

Vanguard Emerging Markets Stock Index Fund 6.5%

Vanguard FTSE Developed Europe ex-U.K. Equity Index Fund 5.5%

Vanguard S&P 500 UCITS ETF 4.6%

Vanguard Japan Stock Index Fund 3.3%

Vanguard U.K. Government Bond Index Fund 2.6%

Vanguard U.K. Inflation-Linked Gilt Index Fund 1.8%

Vanguard U.K. Investment Grade Bond Index Fund 1.5%

Vanguard Pacific ex-Japan Stock Index Fund 1.5%

Vanguard FTSE 100 UCITS ETF 0.6%

Vanguard U.K. Government Bond UCITS ETF 0.0%

ColdIron

btcp said:

If you blend VLS100 and VLS60 50x50 does  it simply gives you VLS80? I first thought if I have both, I balance risk. But if I get one VLS80 it should give me the same result, right? 

In terms of equity/bond split it will, at least initially. But since over time you would expect the 100% equity fund to grow more than the 60% one you may end up with something closer to a VLS85 and may require rebalancing to restore the split. The VLS would do this for you automatically

When Vanguard construct these funds they do so assuming you will have one of them not a mix and match of several of them. What components that make sense for a single fund may make less sense with some sort of blend

Most people would settle on a single professionally built fund

btcp

Based on the above recommendations it sounds like I should sell one of the funds and invest in the other one, depending on my risk attitude.

eskbanker

btcp said:

Based on the above recommendations it sounds like I should sell one of the funds and invest in the other one, depending on my risk attitude.

Surely you'd sell both of the funds (60 and 100) and buy the third (80) unless you've now decided your risk attitude is actually equivalent to 60 or 100 after all?

btcp

eskbanker said:

btcp said:

Based on the above recommendations it sounds like I should sell one of the funds and invest in the other one, depending on my risk attitude.

Surely you'd sell both of the funds (60 and 100) and buy the third (80) unless you've now decided your risk attitude is actually equivalent to 60 or 100 after all?

Exactly. I just need to figure out what is my attitude to risk.

Sailtheworld

btcp said:

eskbanker said:

btcp said:

Based on the above recommendations it sounds like I should sell one of the funds and invest in the other one, depending on my risk attitude.

Surely you'd sell both of the funds (60 and 100) and buy the third (80) unless you've now decided your risk attitude is actually equivalent to 60 or 100 after all?

Exactly. I just need to figure out what is my attitude to risk.

You'll have to work it out for yourself but the the videos Lars Kroijer made to accompany his book Investing Demystified are a worthwhile watch if you're thinking about risk https://www.kroijer.com/

Albermarle

Here is a risk questionnaire
https://www.standardlife.co.uk/c1/guides-and-calculators/assess-your-attitude-to-risk.page