S&S ISA VANGUARD FUNDS

grumiofoundation

Another_Saver said:

dunstonh said:

Only wish a small if any uk stocks

Which probably means you shouldn't be using Vanguard if you are referring to their multi-asset funds. As it won't meet that objective.  If you are using their single sector funds and building your own portfolio, then the amount you allocate to any country/region is up to you.

20-25% is hardly not meeting the objective of a small UK equity allocation, and the op hasn't given their reasons so we can't comment on that.
And it does save a lot of admin and rebalance automatically.

The OP specified small if any. 

Whether this means circa 5%, what they would get in global index fund, or whether they want less than this (could look at ex-UK tracker) who knows? I think though is a fair assumption to say that 5x this does not pass the smell test of “small”. 

I am aware though that you are bullish on the UK stock markets prospects and is a particular hobby horse of yours but that doesn’t make 25% small... (especially without knowing their reasoning) 

Another_Saver

@Holls_dad, a few questions:
Why the vanguard platform? (I use it, like it, think it's fine and if you're already familiar with it that's a good a reason as any)

How much is this amount?

What's your age?

What other pensions do you have?
Do you have a partner, what is their pension situation?

Do you intend for your vanguard sipp to take you from early retirement to claiming state pension, or to last the rest of your life?
 Ie say you're 50 now, retire at 57 on the SIPP and then make it to state pension age by when the SIPP has run out.
Or do you need it to last for life, are you going to partially retire in 7 years and then fully retire at state pension age? Maybe retire, live off drawdown and savings til state pension age?
Or do you need it to do both? I.e. retire fully off the SIPP from say 57-67 (SPA) and then reduce the drawdown by the state pension amount.

If you want to stay on the vanguard platform and avoid the UK bias of the lifestrategy or target retirement range, you could construct your own portfolio using a global fund such as FTSE global all cap (there's also developed world which cuts out emerging markets, developed world ex UK which cuts out emerging markets and the UK, all world which includes the UK and emerging markets but cuts out small caps) and the global bond index fund or ETF.

Holls_dad

Another_Saver said:

@Holls_dad, a few questions:
Why the vanguard platform? (I use it, like it, think it's fine and if you're already familiar with it that's a good a reason as any)- Good reviews by various people

How much is this amount?- £20k per year as it is an ISA 

What's your age?-48

What other pensions do you have?-2 other Pensions, one final salary 
Do you have a partner, what is their pension situation?- 2 other pensions ,one defined benefits 

Do you intend for your vanguard sipp to take you from early retirement to claiming state pension, or to last the rest of your life?- ISA to maximise my returns instead of in a bank earning low interest, can keep it in for 5-10 years after retirement 
 Ie say you're 50 now, retire at 57 on the SIPP and then make it to state pension age by when the SIPP has run out.
Or do you need it to last for life, are you going to partially retire in 7 years and then fully retire at state pension age? Maybe retire, live off drawdown and savings til state pension age?
Or do you need it to do both? I.e. retire fully off the SIPP from say 57-67 (SPA) and then reduce the drawdown by the state pension amount.

If you want to stay on the vanguard platform and avoid the UK bias of the lifestrategy or target retirement range, you could construct your own portfolio using a global fund such as FTSE global all cap (there's also developed world which cuts out emerging markets, developed world ex UK which cuts out emerging markets and the UK, all world which includes the UK and emerging markets but cuts out small caps) and the global bond index fund or ETF.

As above, also up to 25% of Uk stock is fine

Rich1976

eskbanker said:

Another_Saver said:

eskbanker said:

Another_Saver said:

dunstonh said:

Only wish a small if any uk stocks

Which probably means you shouldn't be using Vanguard if you are referring to their multi-asset funds. As it won't meet that objective.  If you are using their single sector funds and building your own portfolio, then the amount you allocate to any country/region is up to you.

20-25% is hardly not meeting the objective of a small UK equity allocation, and the op hasn't given their reasons so we can't comment on that.
And it does save a lot of admin and rebalance automatically.

But if OP is making a point of specifying a desire to underweight UK stocks, then choosing a product that overweights them significantly is unlikely to be appropriate....

They said small if any.
Depending on the amount, HSBC global strategy dynamic held on iWeb may be more appropriate/cheaper. But no numbers or reasons for minimising the UK % have been given.

Indeed, but while OP hasn't felt the need to justify their position, that shouldn't in itself be seen as a rationale to ignore it and assume that we know better, although I agree with Linton's response that it's odd to start with platform choice ahead of investment selection!

For the inexperienced,  it does seem the norm at the minute to go straight to Vanguard and then choose the fund as they will see it being heavily recommended by users on this forum and various Facebook forums that I read. Plus it being cheap , limited choice of funds and easy to use is an advantage to them.
Not saying that is the right or wrong way to do things but someone without much knowledge is hardly going to know in advance where they want to invest and then knowing the fund before selecting the provider. Most people just want simple and straightforward. 

Another_Saver

I'm so stupid sorry I didn't even read that this was an ISA 🤦‍♂️

Other considerations:

Mortgage - there's no clear answer to the question "pay off mortgage asap or keep paying minimum and invest the rest".

Cash - make sure you still have plenty of cash savings besides your ISA. General wisdom is 3-6 months worth of spending as a minimum.

If your timescale is to "set and forget" until you retire in seven years, and you don't expect to touch this money for 5-10 years after, then perhaps 100% equities may be appropriate. I would suggest looking at using iWeb as a platform (https://www.moneysavingexpert.com/savings/stocks-shares-isas/) and if so, open your account sharpish because the account opening fee goes upto £100 on the 4th Jan.
Vanguard don't charge you to trade funds (you can pay £7.50 to trade ETFs instantly during market hours or you can get free overnight dealing) but do charge 0.15% of what you hold, ie £30pa on £20k. iWeb only charge £25 to open, and £5 to trade, so say you only do one trade pet year of £20k to buy a single fund, iWeb will be cheaper and that could add up over the next 12-17 years (your suggested timescale).

As you mentioned ~25% UK is fine, that's roughly the UK weighting in the lifestrategy range. So you could look at lifestrategy 100, but this will be the most volatile option. However, the interest on the bonds % in the other vls range (Ie the 20% of VLS 80, the 40% of VLS 60) is less than the best savings accounts right now. So within an ISA it does make sense to only hold stocks, and to lower your risk profile you could simply increase your cash savings, provided you're getting as much interest as possible.

For example, say you and your partner sticks £20k each into vls 100 this year, after which you will have £60k cash savings leftover. You're only 40% stocks 60% cash (ignoring your house and pensions for a moment).

Have you checked that you'll definitely be able to access your pensions at 55 not 57?

Black_Cat2

Isa newbie here.  With the Vanguard isa do you get charged everytime you pay some money into it which I presume they then automatically invest for you?  I see some peeps saying it can be good to pay a small amount in every month and not a lump sum all at once.  Thanks in advance

grumiofoundation

Black_Cat2 said:

Isa newbie here.  With the Vanguard isa do you get charged everytime you pay some money into it which I presume they then automatically invest for you?  I see some peeps saying it can be good to pay a small amount in every month and not a lump sum all at once.  Thanks in advance

No - it is free to buy/sell funds, there is no upfront charge (see Another_Savers post above for more detail). 

You can set up direct debit(s) (minimum £100) to automatically invest in the fund/funds you want to invest in.

https://www.vanguardinvestor.co.uk/what-we-offer/fees-explained

Another_Saver

Black_Cat2 said:

Isa newbie here.  With the Vanguard isa do you get charged everytime you pay some money into it which I presume they then automatically invest for you?  I see some peeps saying it can be good to pay a small amount in every month and not a lump sum all at once.  Thanks in advance

As above.

What you're talking about is called cost averaging/drip feed/regular investing as opposed to investing a lump sum all at once. The idea is to minimise the risk of putting all your money in the market on the worst day - 10 September 2001, 22 June 2016 - and "smooth out" your investing.
Statistics are that this only makes you better off about 1/3 of the time.

Aside from that, if you have a lump sum to invest then putting it in the market over say, a year, rather than all at once, can be easier for newbies to commit to emotionally because if the market goes down, you just carry on buying more for less, if it goes up, you've already bought at the earlier price.

eskbanker

Black_Cat2 said:

I see some peeps saying it can be good to pay a small amount in every month and not a lump sum all at once.

Just because some peeps say it doesn't mean it's true though - given the long-term trend of investment value rising, it's statistically better to commit a lump sum immediately rather than drip-feeding it, so financially it's typically advantageous not to drip-feed, although, as above, there may be broader psychological perspectives to consider rather than simply seeing it from a solely financial viewpoint....

Black_Cat2

Thanks folks 👍