INDEX FUNDS

deeamon18

Hello everyone,

I am new to investing and after weeks of research, I have decided to start to invest in an Index fund or more. As I understood so far the best is to diversify as much as possible but now I cannot decide how it would be better to do: 1. Invest for now only in FTSE Global All Cap (500£ lump sum for now)

2. Pick a LifeStratgy fund 80 or maybe 60 to have bonds as well and invest half here and half in FTSE Global All Cap ( I really don't want only a lifestrategy as is too much UK bias)

3. Life strategy 80 or 60 (50%) and Fidelity Index World Fund (45%) + Fidelity Index Emerging Markets (5%) . Like this I think it is better as I don't keep my money in one basket, using fidelity platform is cheaper and all the markets are included plus bonds.

I am looking for a medium or long term investment (10 years or more) and I can invest 200£-300£ /monthly for now, but slowly, slowly after I gain confidence I can invest more.

Please, feel free to correct me or give suggestions or maybe a better and cheaper platform. Many thanks.

Linton

deeamon18 said:

Hello everyone,

I am new to investing and after weeks of research, I have decided to start to invest in an Index fund or more. As I understood so far the best is to diversify as much as possible but now I cannot decide how it would be better to do: 1. Invest for now only in FTSE Global All Cap (500£ lump sum for now)

2. Pick a LifeStratgy fund 80 or maybe 60 to have bonds as well and invest half here and half in FTSE Global All Cap ( I really don't want only a lifestrategy as is too much UK bias)

3. Life strategy 80 or 60 (50%) and Fidelity Index World Fund (45%) + Fidelity Index Emerging Markets (5%) . Like this I think it is better as I don't keep my money in one basket, using fidelity platform is cheaper and all the markets are included plus bonds.

I am looking for a medium or long term investment (10 years or more) and I can invest 200£-300£ /monthly for now, but slowly, slowly after I gain confidence I can invest more.

Please, feel free to correct me or give suggestions or maybe a better and cheaper platform. Many thanks.

1) Reasonable thing to do assuming you wont panic when/if it drops by 40%.  Your real risk from a crash is much diminished by your drip feeding since any temporary fall would be good for you since you would buy more units for your  £200-300.
2) Pointless since your bond holding would be so small.  If you used VLS80 it would be only 10% of your portfoliom which wont make much difference.  If you want bonds at all, say to significantly reduce the effect and benefits of a crash  I would say 40% of the total may be more appropriate. 
If you dont want the equity part of VLS because if its UK bias why not just have a pure bond fund alongside the Global one.
3) As (2) + Since you are only investing say £250/month only £12.50 of that would be going into EM.  Not worth the effort.  In any case Vanguard Global All Cap is about 8% EM anyway.

Albermarle

( I really don't want only a lifestrategy as is too much UK bias)

There are alternatives to Life Strategy multi asset funds .eg HSBC global strategy & Blackrock consensus, to name two.

Also as you mentioned Fidelity they have  multi asset Allocator funds . They are all about the same cost.

chockydavid1983

Personally I use 1 (Vanguard FTSE Global All Cap) + Vanguard Global Bond Index

dunstonh

chockydavid1983 said:

Personally I use 1 (Vanguard FTSE Global All Cap) + Vanguard Global Bond Index

Global bonds?  interesting choice at this time.

Albermarle

Well you could be happy with this choice, so far anyway .
https://www.moneyobserver.com/fund/Allianz-Strategic-Bond-C-Inc
Not one I have unfortunately but posted in another thread by one happy investor. 

Sebo027

Check this video out for a equities / bonds explanation. 
https://www.youtube.com/watch?v=b28OCfZhaMc