Investing in Global Trackers and other similar investments

DoneWorking

Malthusian said:

DoneWorking said:

You are probably right about my concerns over loss and volatility

However I am thinking that for me at this moment in time I would be less anxious with an IFA

Apologies for another possibly brutal post, but as I recall you've been speaking to IFAs since at least 2017. If you were going to "put your trust" in one, which would allow them  limit your anxiety during loss periods, you would already have been receiving ongoing advice for years.

You can't choose to trust someone, any more than you can choose to be happy. You can choose to do what they say but that's not the same thing, and if you force yourself into taking a recommendation you haven't bought into it's a recipe for disaster. The likely outcome is that you'll regret it when the markets are down and you have paper losses of tens of thousands of pounds.

If you don't believe people now when they say that there is nothing to fear from investment volatility, and a diversified investment will beat cash and come out on top through all the crises and bad news stories if you hold it for the long term (however long that turns out to be), you definitely won't believe an IFA when they are saying the exact same thing when the markets have fallen.

It's much harder to believe rational long-term views when everyone is panicking and all the experts in the news are saying that the sky is falling in and you should sell everything before it gets worse.

My only real concern is that I may be entering into investments at a time when there are so many current and pending issues which could have a major affect on returns

Not the least of which are war in Ukraine and elsewhere , the Pandemic ,Energy issue , Climate Emergency.

I agree with Kansuwan. If you only want to invest when there are no issues in the news, your best option is to remain permanently in cash. Inflation is not a demon that everyone has to avoid, it is merely a charge you pay for not having to worry about the number going down.

Thanks for your comments

GeoffTF

DoneWorking said:

GeoffTF said:

The ESG Developed World All Cap Equity Index Fund has been around for over ten years:

https://www.vanguardinvestor.co.uk/investments/vanguard-esg-developed-world-all-cap-equity-index-fund-gbp-acc/overview

It is developed world only, but that does not matter much. Nobody knows whether or not the emerging markets will do better than the developed markets. Adding the emerging markets spreads your risk a little further, but whether it reduces your overall risk is not clear. You will find other alternatives if you search in Google. Nonetheless, Vanguard is a sound choice.

Thanks

Would this be best as a stand alone investment using 50% of my funds

Or would it be better as part of several separate funds

If so for an investment sum of say £150k how many separate VG style funds

That fund would be a reasonable choice for 50% of your money, with the remainder going into savings accounts. You only need one fund. Using more than one will just make life more complicated.

CheekyMikey

I said I was out, but I’ve come back in to just remind you again that you can change what you decide to do at any time…you’re talking as if this is an irreversible decision which you have to live with forever but it isn’t. If you go the 50/50 route, half your money will be safe earning some interest. The type of fund you are talking about choosing means that whichever one you go for is unlikely to perform any worse or better than any other…if it does well, you have the option to add to it from your cash. If it does poorly you can get out at any time, but I am not suggesting bailing* out at the first sign of a downturn. You must still think in your own mind that unless something really drastic happens you are committing to the markets for the mid to long term.

GeoffTF

CheekyMikey said:

If it does well, you have the option to add to it from your cash. If it does poorly you can get out at any time...

The usual recommendation is to do the opposite. If it does well, sell some. If it does poorly, buy some more. Do not buy high and sell low! (Sorry to have cut your sentence short CheekyMikey.) Actually, I have recommended taking money from whichever is the larger: savings or the tracker. That is a cheaper and less drastic method of rebalancing.

DoneWorking

CheekyMikey said:

I said I was out, but I’ve come back in to just remind you again that you can change what you decide to do at any time…you’re talking as if this is an irreversible decision which you have to live with forever but it isn’t. If you go the 50/50 route, half your money will be safe earning some interest. The type of fund you are talking about choosing means that whichever one you go for is unlikely to perform any worse or better than any other…if it does well, you have the option to add to it from your cash. If it does poorly you can get out at any time, but I am not suggesting bailing* out at the first sign of a downturn. You must still think in your own mind that unless something really drastic happens you are committing to the markets for the mid to long term.

Thanks for coming back and the comments above

This option is of interest

50% in savings 
50% in Vanguard ESG Fund 
         Set for accumulation.

The one Geoff posted above has dropped a bit so far in 2022
Is it likely to drop again due to energy issues related to war , potential return to fracking etc and cost hikes

Thoughts

Or is it more likely it will start to rise again as we realise renewables are the way forward for the future

Would I be better trying to find a whole World VG ESG fund

The one mentioned is Developed World Only

Thrugelmir

DoneWorking said:

CheekyMikey said:

I said I was out, but I’ve come back in to just remind you again that you can change what you decide to do at any time…you’re talking as if this is an irreversible decision which you have to live with forever but it isn’t. If you go the 50/50 route, half your money will be safe earning some interest. The type of fund you are talking about choosing means that whichever one you go for is unlikely to perform any worse or better than any other…if it does well, you have the option to add to it from your cash. If it does poorly you can get out at any time, but I am not suggesting bailing* out at the first sign of a downturn. You must still think in your own mind that unless something really drastic happens you are committing to the markets for the mid to long term.

Or is it more likely it will start to rise again as we realise renewables are the way forward for the future

Plenty of storm clouds on the short term horizon. Transition to renewables (globally)  is going to take decades. 

GeoffTF

DoneWorking said:

CheekyMikey said:

I said I was out, but I’ve come back in to just remind you again that you can change what you decide to do at any time…you’re talking as if this is an irreversible decision which you have to live with forever but it isn’t. If you go the 50/50 route, half your money will be safe earning some interest. The type of fund you are talking about choosing means that whichever one you go for is unlikely to perform any worse or better than any other…if it does well, you have the option to add to it from your cash. If it does poorly you can get out at any time, but I am not suggesting bailing* out at the first sign of a downturn. You must still think in your own mind that unless something really drastic happens you are committing to the markets for the mid to long term.

Thanks for coming back and the comments above

This option is of interest

50% in savings 
50% in Vanguard ESG Fund 
         Set for accumulation.

The one Geoff posted above has dropped a bit so far in 2022
Is it likely to drop again due to energy issues related to war , potential return to fracking etc and cost hikes

Thoughts

Or is it more likely it will start to rise again as we realise renewables are the way forward for the future

Would I be better trying to find a whole World VG ESG fund

The one mentioned is Developed World Only

Fossil fuels are not going away. Production is being stepped up, not reduced. They are not going to be replaced by renewables. As I have said, it does not matter whether you choose a developed world or and all world tracker. I have already posted a link to an all world Vanguard ESG tracker, but you did not like it because it is new.

grumiofoundation

DoneWorking said:

CheekyMikey said:

I said I was out, but I’ve come back in to just remind you again that you can change what you decide to do at any time…you’re talking as if this is an irreversible decision which you have to live with forever but it isn’t. If you go the 50/50 route, half your money will be safe earning some interest. The type of fund you are talking about choosing means that whichever one you go for is unlikely to perform any worse or better than any other…if it does well, you have the option to add to it from your cash. If it does poorly you can get out at any time, but I am not suggesting bailing* out at the first sign of a downturn. You must still think in your own mind that unless something really drastic happens you are committing to the markets for the mid to long term.

Thanks for coming back and the comments above

This option is of interest

50% in savings 
50% in Vanguard ESG Fund 
         Set for accumulation.

The one Geoff posted above has dropped a bit so far in 2022
Is it likely to drop again due to energy issues related to war , potential return to fracking etc and cost hikes

Thoughts

Or is it more likely it will start to rise again as we realise renewables are the way forward for the future

Would I be better trying to find a whole World VG ESG fund

The one mentioned is Developed World Only

A very, very small % of the vanguard ESG fund is actually invested in renewable energy. You can check the holding by looking at the link posted. 

The ESG fund has barely dropped this calendar year, and a non-ESG equivalent will have performed very similarly over the last 3 months (although for clarity you shouldn't be worrying about 3 month performance!!)


There is an emerging markets ESG version which you could hold alongside - if you held in a ratio of 45:5 Developed to EM you would replicate the rough % of emerging markets in an all-world tracker.

https://www.vanguardinvestor.co.uk/investments/vanguard-esg-emerging-markets-all-cap-equity-index-fund-gbp-acc

DoneWorking

grumiofoundation said:

DoneWorking said:

CheekyMikey said:

I said I was out, but I’ve come back in to just remind you again that you can change what you decide to do at any time…you’re talking as if this is an irreversible decision which you have to live with forever but it isn’t. If you go the 50/50 route, half your money will be safe earning some interest. The type of fund you are talking about choosing means that whichever one you go for is unlikely to perform any worse or better than any other…if it does well, you have the option to add to it from your cash. If it does poorly you can get out at any time, but I am not suggesting bailing* out at the first sign of a downturn. You must still think in your own mind that unless something really drastic happens you are committing to the markets for the mid to long term.

Thanks for coming back and the comments above

This option is of interest

50% in savings 
50% in Vanguard ESG Fund 
         Set for accumulation.

The one Geoff posted above has dropped a bit so far in 2022
Is it likely to drop again due to energy issues related to war , potential return to fracking etc and cost hikes

Thoughts

Or is it more likely it will start to rise again as we realise renewables are the way forward for the future

Would I be better trying to find a whole World VG ESG fund

The one mentioned is Developed World Only

A very, very small % of the vanguard ESG fund is actually invested in renewable energy. You can check the holding by looking at the link posted. 

The ESG fund has barely dropped this calendar year, and a non-ESG equivalent will have performed very similarly over the last 3 months (although for clarity you shouldn't be worrying about 3 month performance!!)


There is an emerging markets ESG version which you could hold alongside - if you held in a ratio of 45:5 Developed to EM you would replicate the rough % of emerging markets in an all-world tracker.

https://www.vanguardinvestor.co.uk/investments/vanguard-esg-emerging-markets-all-cap-equity-index-fund-gbp-acc

That sounds interesting

So 45% on the
Developed Countries ESG VG 
5% on the Emerging Markets ESG VG 

Geoff suggested only going with one so as not to confuse matters

This sounds like a reasonable compromise

On one final point 

Is there enough spread with just the one or two Vanguard's

I thought it was always best to spread the risk 

Rollinghome

DoneWorking said:

That sounds interesting

So 45% on the
Developed Countries ESG VG 
5% on the Emerging Markets ESG VG

Is there enough spread with just the one or two Vanguard's

I thought it was always best to spread the risk 

So how much spread would you like?

Vanguard ESG Emerging Markets All Cap holds 4476 stocks and Vanguard ESG Developed World All Cap Equity Index Equity Index 3026 stocks.  That's over 7500 between them.

When I started investing there were no ETFs and funds carried a huge front end charge, so many more people than now had a portfolio solely of directly held company stocks. The usual advice then was to have around 15-20 stocks.  Any more than that would be derided as "diworsification".

So 7500 stocks is plenty of diversification for equities. 

But what you should be considering are asset classes other than equities: cash, various bonds, gold, commodities, property, "real assets" etc.  That will depend on what you intend to achieve. You may need to do some googling https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/investment-portfolio/