ISA S&S Advice - Solid, low maintenance portfolio

drag0nfly

Hello! Newbie investor wanting to establish a Solid (as can be), but Simple and Low Maintenance portfolio. Here are the facts and thank you for taking the time…

I am early 40s and do not plan on touching this for at-least 10 - 15 years.

I already have an H&L account for my LISA with some money in it, so I might as well stick with it?*

I have £20,000 to invest before the end of the tax year and £600 to contribute monthly.

As a starting point I have just narrowed it down to 3 potential investments. I have chosen these particular ones only because they seem to be the most popular and dependable over the long term.

I am therefore not sure how to split these up and into what ISAs. Does it make sense to contribute equally to each one or are they are all very similar? Is it better to focus on maybe 2 of them?

Also open to other suggestions to add or replace here! As I said this was just a starting point to create my portfolio…

Stocks and Share ISA:

£5,000 Lump sum - VANGUARD LIFESTRATEGY 80% EQUITY + (£150 per month)

£5,000 Lump sum- LEGAL & GENERAL GLOBAL 100 INDEX CLASS C - ACCUMULATION + (£150 per month)

LifeTime ISA:

£10,000 Lump sum - VANGUARD FTSE GLOBAL ALL CAP INDEX ACCUMULATION + (£300 per month)

*I read lot of people saying on here that if you have mostly Vanguard holdings then just move to the vanguard platform, however I cannot see the price difference from the Vanguard website and H&L website as both say 0.23%. Is the right or am I missing hidden costs here from H&L?

Other musings:

Just Hand it over to wealth management company?

Is now even a good time to pile money into stocks and shares? 

Any advice would be hugely appreciated!

Thankyou! 

dunstonh

*I read lot of people saying on here that if you have mostly Vanguard holdings then just move to the vanguard platform, however I cannot see the price difference from the Vanguard website and H&L website as both say 0.23%. Is the right or am I missing hidden costs here from H&L?

Fund charges are the same on most platforms.   It is only the platform charge that is different and which tax wrappers the platform offers and what functionality they offer.

Just Hand it over to wealth management company?

Generally not a good idea.     You should really pick from either DIY (as you currently are) or using an IFA.   Not an FA or wealth management company.

Is now even a good time to pile money into stocks and shares? 

What is happening now that makes you think it wouldn't be?  

drag0nfly

Is now even a good time to pile money into stocks and shares? 

What is happening now that makes you think it wouldn't be?  

Well I don't think I need to state the obvious but I have no idea if this means to hold off investing or not. So pelase ignore this question.

I am more interested in getting some feedback on my investment choices at this stage. 

masonic

Vanguard would charge you 0.15% to manage the Vanguard funds, while HL will charge 0.45%. Over the years that difference can mount up, as your portfolio grows.

I don't understand the rationale for including the L&G fund. Do you want to end up with 90% equities (95% equities including the LISA)? If so, why this fund? It's not very diversified (just over 100 holdings in total, largest holding @ 14%, top 4 holdings all arguably in the same sector @ 42%!). If simple and low maintenance are of importance, then a good justification would be needed to go beyond a single fund in the S&S ISA.

eskbanker

drag0nfly said:

I am early 40s and do not plan on touching this for at-least 10 - 15 years.

Have you considered using a pension wrapper instead of ISAs?  Generally tax-advantageous if it's money that won't be needed until mid to late fifties....

drag0nfly said:

LifeTime ISA:
£10,000 Lump sum

You can only pay up to £4K per tax year into a LISA.

drag0nfly said:

As a starting point I have just narrowed it down to 3 potential investments. I have chosen these particular ones only because they seem to be the most popular and dependable over the long term.

I am therefore not sure how to split these up and into what ISAs. Does it make sense to contribute equally to each one or are they are all very similar? Is it better to focus on maybe 2 of them?

Also open to other suggestions to add or replace here! As I said this was just a starting point to create my portfolio…

Not convinced it's worth going for three different funds, unless there are specific meaningful reasons why you believe that one wouldn't fulfil your requirements, i.e. don't be under the illusion that you're achieving better diversification if the underlying holdings overlap so heavily.  At this sort of level of investment, a single multi-asset fund is likely to be adequate as a 'fire and forget' one stop shop that covers all the main bases, unless you've identified an investing strategy that necessitates a different allocation that isn't readily handled by off-the-shelf solutions.

drag0nfly

Ok I see I have a lot to learn.
So then if you were to have a 'fire and forget' strategy, how would it look?...

For example:

Stocks and Share ISA:

VANGUARD FTSE GLOBAL ALL CAP INDEX ACCUMULATION + (£300 per month)

LifeTime ISA: (max 4,000 per year)

VANGUARD LIFESTRATEGY 80% EQUITY + (£300 per month)

(I realise these are probably too similar but it is just a starting point.)

eskbanker

What's your rationale for using two different funds?

drag0nfly

eskbanker said:

What's your rationale for using two different funds?

No rationale. Only that it mixes things up a bit. Are you potentially saying just have the same fund in both my LISA and ISA? I am no expert, only here for advice so whatever makes the most sense! 

masonic

It would be worth reviewing some of the Monevator articles linked in on this page:

https://monevator.com/category/investing/passive-investing-investing/

eskbanker

drag0nfly said:

eskbanker said:

What's your rationale for using two different funds?

No rationale. Only that it mixes things up a bit. Are you potentially saying just have the same fund in both my LISA and ISA? I am no expert, only here for advice so whatever makes the most sense! 

Yes - there's no right or wrong answer as such, but 'mixing things up a bit' doesn't really seem a particularly valid strategy when there's a huge amount of overlap between those funds from the same manager, so you'd effectively be constructing something akin to VLS 90, which isn't necessarily a bad thing, but it really comes down to what you're actually trying to achieve.