Evaluate my (revised) plan

whatstheplan

As some of you know, I've recently started investing, putting £20k into a Vanguard S&S ISA.  Rightly or wrongly, I want to fully utilise this pot within Vanguard whilst I'm still learning, whether it all remains there in years to come remains to be seen.  I'm reluctant to go down the bonds route as I see no definitive benefit to me given my circumstances and objectives, so my plans are heavily slanted towards equities.

Currently, £10k is invested within LS100.  So I have another £10k that I want to put to work.  I was thinking about small-cap however quite a few sites advise a potential downside is trying to offload, can be a more arduous process than medium/large-cap?  I'm unsure (still learning!) as to how accurate that advice is, however I might park my ideas around small-cap for now.

Rather than just put the other £10k into LS100, I'm toying with the idea of splitting it across the following 4 funds:

US Equity Index
FTSE UK All Share Index
FTSE Developed World ex UK Equity Index
S&P 500

These are the 4 largest funds within LS100 based on %.  My rationale is, as oppose to spreading the £10k across the entire LS100 portfolio, I'm raising (albeit slightly) my % across the aforementioned funds and disregarding the remainder.

The combined OCF for these 4 funds is 0.37% vs LS100's 0.22%, I'm not sure if this has any bearing/adverse impact on my plan, however given my sums are low the OCF difference and consequences of would be minimal?

I get the fact this is small beans to most of you, however I'd be interested to know if my plan makes sense based on remaining within the Vanguard product suite?

george4064

In short, plan doesn't make much sense at all (looks like you're trying to underweight emerging markets and subsequently doubling down on US equities?) and I'd just stick it in the Vanguard LS100 you have already.

eskbanker

whatstheplan said:

The combined OCF for these 4 funds is 0.37% vs LS100's 0.22%, I'm not sure if this has any bearing/adverse impact on my plan, however given my sums are low the OCF difference and consequences of would be minimal?

Putting to one side the wisdom or otherwise of your approach, from a simple maths perspective you don't combine OCFs by adding them all together like that, you average them, so your average OCF of the four funds is 0.0925%, which is the figure you'd compare with the LS100's 0.22%.  This assumes an equal split of your £10K across the four, but if you'd be splitting any other way then you'd take a weighted average....

Albermarle

So you save around 0.13% but bring yourself more effort and probably a less well balanced investment.

whatstheplan

Thanks guys, message received and understood