S&S LISA, good idea to invest in two separate funds, or is that self-defeating?

chillymoose

Apologies if this has been asked before, I tried to use the search function but it was a nightmare.

I've opened a S&S LISA. Deposited £4k in it but not chosen where to invest yet. I was just going to stick with good ol' Vanguard LS (leaning towards 60%), however I'm not completely comfortable with how overexposed this fund is to the UK. So, I thought split my money between two funds; this one, and another more globalised one.

My question is, when investing relatively small amounts (max 4k a year, although some years it may be considerably less than this, - goal is to buy a property within the next 5-10 years), is it worth splitting one's money between two funds in this way? Or does it defeat the point of Vanguard LS?

El_Torro

If you want to invest in two multi asset funds, even if you're only investing £4k, then that's fine, no harm in doing it. 

You could argue that if you don't like the overweight UK nature of VLS you could just invest in a fund which isn't overweight in the UK. For example HSBC Global Strategy or Fidelity Multi Asset Allocator. However if you do want to be overweight in the UK, but not as much as VLS, you can mix a couple of funds together.

It's not the simplest way to invest, but your long term returns shouldn't be harmed by you doing this.

dunstonh

 Surely it is bad practice not to confirm in writing following telephone cancellations? How about not sticking it in VLS at all if you are not happy with its weightings?   There are plenty of alternatives.

My question is, when investing relatively small amounts (max 4k a year, although some years it may be considerably less than this, - goal is to buy a property within the next 5-10 years), is it worth splitting one's money between two funds in this way? Or does it defeat the point of Vanguard LS?

The amount doesn't warrant having two funds.   Even adding a zero to it doesn't.    

chillymoose

El_Torro said:

If you want to invest in two multi asset funds, even if you're only investing £4k, then that's fine, no harm in doing it. 

You could argue that if you don't like the overweight UK nature of VLS you could just invest in a fund which isn't overweight in the UK. For example HSBC Global Strategy or Fidelity Multi Asset Allocator. However if you do want to be overweight in the UK, but not as much as VLS, you can mix a couple of funds together.

It's not the simplest way to invest, but your long term returns shouldn't be harmed by you doing this.

Well yes I thought about that but my concern was not having any bonds in the fund? I'm no economist but most of the advice I've read says if you're investing for a short-medium period (as I am), then going all in on equities is pretty risky?

Albermarle

chillymoose said:

El_Torro said:

If you want to invest in two multi asset funds, even if you're only investing £4k, then that's fine, no harm in doing it. 

You could argue that if you don't like the overweight UK nature of VLS you could just invest in a fund which isn't overweight in the UK. For example HSBC Global Strategy or Fidelity Multi Asset Allocator. However if you do want to be overweight in the UK, but not as much as VLS, you can mix a couple of funds together.

It's not the simplest way to invest, but your long term returns shouldn't be harmed by you doing this.

Well yes I thought about that but my concern was not having any bonds in the fund? I'm no economist but most of the advice I've read says if you're investing for a short-medium period (as I am), then going all in on equities is pretty risky?

The HSBC and Fidelity funds mentioned both have a choice of risk levels , same as VLS.
Fidelity Multi asset allocator 'Growth ' has 60% equities but no UK bias.
HSBC global strategy 'Balanced' has a flexible equity % ( but in the approx region of 60% ) and no UK Bias. 

Alexland

Investing in anything over the short term is 'pretty risky' and at current equity and bond market valuations that might even extend into the start of the medium term so for anything less than 5-7 years it might be better to stick with a cash LISA product.
S&S LISAs are really intended for those investing for 20+ years until age 60+.