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Does this split makes good investment

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Comments

  • JohnWinder
    JohnWinder Posts: 1,862 Forumite
    Fifth Anniversary 1,000 Posts Name Dropper
    dunstonh said:
    Obviously, you haven't bought into the passive investing views.  So, why are you using passive funds when you are so keen to be a fund manager yourself?


    I'd say that nominating three funds, all tracking reputable indices, provided by the business that pioneered passive investing as a way of allowing DIY'ers to get their fair share of market returns shows a fair bit of faith in passive investing.
    She's allowing the fund managers to track the indices as closely as they can, as cheaply as they can (no easy task), and choosing the funds that reflect her views on stock returns. We don't all fully agree with that latter, but the passive investing community is a broad church.
  • dunstonh
    dunstonh Posts: 118,596 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I'd say that nominating three funds, all tracking reputable indices, provided by the business that pioneered passive investing as a way of allowing DIY'ers to get their fair share of market returns shows a fair bit of faith in passive investing.

    Except snowshine is making significant management decisions that are clearly not passive.    

    • Limiting US to the S&P500.  
    • Having a significant home bias above anything most would consider normal
    • And with that home bias, opting only to have large cap and mid cap but no small cap despite the UK being better at small and mid cap historically.
    • No European (exc UK)
    • No Japan
    • No Asia/pacific
    • No EM

    Passive investing always requires some degree of management.  However, there are some significant management decisions in there beyond what would normally be considered passive.   Picking a handful of passive funds does not make you a passive investor if you decide to make significant management decisions that will have a major influence on the returns.


    And whether the fund selection was managed or passive, the asset weightings are poor.


    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Am I  correct to understand that Vanguard Blended funds performance involve a third party to deliver the returns that the investment tracker "ETF" is trying to replicate?
  • snowshine said:
    Am I  correct to understand that Vanguard Blended funds performance involve a third party to deliver the returns that the investment tracker "ETF" is trying to replicate?
    I doubt it, as I don't understand what you mean.
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