40-60% Funds Worried

Albermarle

ChainsawCharlie said:

Is the Vanguard FTSE Global All Cap Index £ Acc, almost the same as the VLS 100, BUT with smaller UK Bias?

I was thinking of Maybe moving away from the VLS 60/40 then having just FTSE Global All Cap Index £ Acc, and a Vanguard Bond Fund

Then I could rebalance myself between Stocks and Bonds, whilst having less UK bias

Or you could just have a multi asset fund without the UK bias of Vanguard.
Multi Asset Funds | Ready-made Portfolios - HSBC UK
Fidelity Investment Funds IV - Fidelity Multi Asset Allocator Growth Fund W Accumulation Key Statistics | GB00B9C3GS90 | Fidelity
Or something in the middle.
MyMap 5 Fund D GBP Acc Portfolio Overview | GB00BFBFYQ25 | Fidelity

Linton

Albermarle said:

ChainsawCharlie said:

Is the Vanguard FTSE Global All Cap Index £ Acc, almost the same as the VLS 100, BUT with smaller UK Bias?

I was thinking of Maybe moving away from the VLS 60/40 then having just FTSE Global All Cap Index £ Acc, and a Vanguard Bond Fund

Then I could rebalance myself between Stocks and Bonds, whilst having less UK bias

Or you could just have a multi asset fund without the UK bias of Vanguard.
Multi Asset Funds | Ready-made Portfolios - HSBC UK
Fidelity Investment Funds IV - Fidelity Multi Asset Allocator Growth Fund W Accumulation Key Statistics | GB00B9C3GS90 | Fidelity
Or something in the middle.
MyMap 5 Fund D GBP Acc Portfolio Overview | GB00BFBFYQ25 | Fidelity

I agree that a multi-asset fund could be preferable to you managing your own allocations. One reason I like the HSBC funds is that their government bond allocation is predominantly US with a very low % gilts and with 70% of the total bond investment with maturity dates of <10 years. 

masonic

ChainsawCharlie said:

But isn't there better mileage in not having multi asset fund that is all 10% equity then a 2nd fund which is all 100% bonds
then you can choose bond/equity ratios more easily, and make changes easier ? or are you saying choose a ready made portfolio and have one adventurous and 1 cautious?

Personal choice. There may be costs associated with manual rebalancing, but on the other hand you can do it at a time of your choosing. Some multi-asset funds are volatility managed and adjust % bonds over the market cycle. Small changes are unlikely to have a significant impact, so keeping things simple comes at little cost.

Malthusian

ChainsawCharlie said:

But isn't there better mileage in not having multi asset fund that is all 100% equity then a 2nd fund which is all 100% bonds
then you can choose bond/equity ratios more easily, and make changes easier ?

That's not a good thing if the changes are likely to involve switching your equity fund into the bond fund when you are worried (when the markets will probably be down) and then switching the bonds into the equities when things seem rosier again (when the markets will probably be back at their peak).

In very simple terms, you should pick a ratio and stick to it through ups and downs.

Investors often also find it difficult to "rebalance" as it means selling investments that have done well and buying stuff that has done badly. When the imbalance is in equities' favour, it means selling investments that have done well and buying stuff that you know will, in the long term, do less well in the future. (But conventional investment wisdom says it is still important to do so, for the reason you bought bonds in the first place - to continue limiting volatility to an acceptable level.) Multi-asset funds take care of the job for you, one way or another.

Iain_For

Rebalancing needn't be onerous with a simple spreadsheet though it does need discipline. I moved out of multi-asset funds when I retired as I needed a more tailored balance of bond maturities than available in many multi-asset funds in the growth part of our portfolio to run alongside the WP portion and cash. Having a portion of our portfolio focussed on long term (10+ years) growth certainly helps with the discipline - this is money for our dotage, I don't need to fret about right now - just focus on getting that far in life!

Albermarle

ChainsawCharlie said:

My predicament at present is this.
I really do want a set it and forget portfolio, where I can chuck all my sipp fund into one global tracker, and leave it.

If say I was to throw everything at say a vanguard VLS 60 then part of me says well 60% will be ok as it is going into equities which will may grow over 10 years...surely, but its that 40% going into bonds that concerns me, in similar measures as backing a 3 legged horse in the grand national, in 10 years time 60% equity makes it to the finishing post, but the 40% bonds, has nowpossibly dragged down the fund 

I have modified your post above. In 10 years anything can happen.

Audaxer

ChainsawCharlie said:

But isn't there better mileage in not having multi asset fund that is all 100% equity then a 2nd fund which is all 100% bonds
then you can choose bond/equity ratios more easily, and make changes easier ? 

You certainly could do that and do your own rebalancing, but if bonds keep falling in value and your equity percentage increases, would you be brave enough to rebalance by selling equities to buy more bonds? With all the negative talk about bonds, many of us may not be that brave or disciplined, and that is where it may be preferable to have a multi asset fund that just does it for you.

bostonerimus

ChainsawCharlie said:

My predicament at present is this.
I really do want a set it and forget portfolio, where I can chuck all my sipp fund into one global tracker, and leave it.

If say I was to throw everything at say a vanguard VLS 60 then part of me says well 60% will be ok as it is going into equities which will grow over 10 years...surely, but its that 40% going into bonds that concerns me, in similar measures as backing a 3 legged horse in the grand national, in 10 years time 60% equity makes it to the finishing post, but the 40% bonds, has now dragged down the fund 

I admire your optimism. Think of it like this: you have a highly strung horse with 4 legs that could fall at Valentine's or a 3 legged horse that is very steady and climbs over Valentine's and makes it to the finish. Once again you are prioritizing potential returns and ignoring risk. You want to maximize the possibility of success rather than the potential size of your pot and to do that your finances should be diversified with cash, bonds, stock, a house, maybe an annuity at some point, sensible insurance cover etc.

ChainsawCharlie

Audaxer said:

ChainsawCharlie said:

But isn't there better mileage in not having multi asset fund that is all 100% equity then a 2nd fund which is all 100% bonds
then you can choose bond/equity ratios more easily, and make changes easier ? 

You certainly could do that and do your own rebalancing, but if bonds keep falling in value and your equity percentage increases, would you be brave enough to rebalance by selling equities to buy more bonds? With all the negative talk about bonds, many of us may not be that brave or disciplined, and that is where it may be preferable to have a multi asset fund that just does it for you.

Point taken, no i wouldn't  be that brave

ChainsawCharlie

Albermarle said:

ChainsawCharlie said:

My predicament at present is this.
I really do want a set it and forget portfolio, where I can chuck all my sipp fund into one global tracker, and leave it.

If say I was to throw everything at say a vanguard VLS 60 then part of me says well 60% will be ok as it is going into equities which will may grow over 10 years...surely, but its that 40% going into bonds that concerns me, in similar measures as backing a 3 legged horse in the grand national, in 10 years time 60% equity makes it to the finishing post, but the 40% bonds, has nowpossibly dragged down the fund 

I have modified your post above. In 10 years anything can happen.

Thanks  point taken, but once the bonds go down in value in a multi asset fund, is that it, or do they have the possibility to recover and even gain again?