Global Tracker

Bigbobby

I posted a few weeks ago about investing in active funds.  I seemed to have been grabbed by the headlines figures that active funds such as Scottish Mortgage Investment Trust delivers superb returns.  Having listening to feedback only in a small number of cases do active outperform passive.  
I am new to investing and I do not have the time to research sectors or regions.  I was thinking of a global index tracker such as Vanguard FTSE Global All Cap Index as it automatically reinvests.  Fees are lower as well.  I am 34 and looking at making regular contributions of £200/month and wish to invest for the long-term possibly as long as 20 years.  I am a member of the NHS pension scheme, have an emergency fund and make overpayments on the mortgage where possible.
With the vast array of index funds is a global index a good place for someone new to investing and does not have the time and knowledge to pick individual funds to try and beat the market?  Index might seem less exciting than active that tries to beat the market but i think it is a more sensible approach to take.

Alistair31

You answer your own question. Yes.

NottinghamKnight

Yes that would be fine, 100% equity might be a roller coaster ride in terms of rise and falls but regular investing will smooth this and also mean that your funds should continue to grow, certainly initially, due to monthly payments. If you have a low mortgage rates then many people might recommend paying that in as it is likely to outperform, personal choice though. Assume you would be doing this into an isa so there are  no tax considerations. 

aroominyork

Even if you had "the time and knowledge to pick individual funds" the chances are you wouldn't succeed in beating the market. So, Yes.

BananaRepublic

I would argue against the statement that only in a small number of cases do active outperform passive (sic). That aside, you should check what the so called global fund is. For example the L&G Global 100 Index Trust is over 70% invested in the US. The Vanguard fund is 56% US. So if you buy only that, you are heavily weighted towards the US. Personally I prefer a greater degree of diversification, but each to their own. 

I’m also concerned by the high growth of FAANG and related stocks. It doesn’t seem to get much mention here. 

BananaRepublic

aroominyork said:

Even if you had "the time and knowledge to pick individual funds" the chances are you wouldn't succeed in beating the market. So, Yes.

Then I must be very lucky. 

Another_Saver

Bigbobby said:

I posted a few weeks ago about investing in active funds.  I seemed to have been grabbed by the headlines figures that active funds such as Scottish Mortgage Investment Trust delivers superb returns. 
Has delivered superb returns recently, you can't assume it is ongoing.
 Having listening to feedback only in a small number of cases do active outperform passive.  
I am new to investing and I do not have the time to research sectors or regions.  I was thinking of a global index tracker such as Vanguard FTSE Global All Cap Index as it automatically reinvests.  Fees are lower as well.  I am 34 and looking at making regular contributions of £200/month and wish to invest for the long-term possibly as long as 20 years.  I am a member of the NHS pension scheme, have an emergency fund and make overpayments on the mortgage where possible.
With the vast array of index funds is a global index a good place for someone new to investing and does not have the time and knowledge to pick individual funds to try and beat the market?
Your options as a newbie are:
1. Know something most of the market doesn't (or take a contrary view)
2. Cheat somehow (and the ways how are all illegal)

3. Get lucky (but you've already lucked out by being alive in the UK in 2020, having your own house/computer/internet access/savings to invest, compared with most humans ever)

4. Pick something other than an index fund for your own reasons rather than just chasing higher returns. People invest in all sorts of things for all sorts of reasons, not just trying to beat the market, and as long as your portfolio is reasonably diverse, you'll probably do fine.

  Index might seem less exciting than active that tries to beat the market but i think it is a more sensible approach to take.
It is

That's a solid fund choice, a solid plan, and using the Vanguard platform will definitely be cheaper for you for a good long while if you carry on at £200/month. Your post demonstrates a very good attitude to have about investing, often people fall into the "little bit of knowledge" but you've dodged it well   

BananaRepublic

I checked the SMIT and it has been a solid performer over the last ten years. It has had stunning performance this year. They might have borrowed lots of money at the time  of the crash to acquire stocks cheap, or sold existing stocks to buy ones with more growth potential. It’s a well performing fund with recent stellar performance which is unlikely to be repeated.