All investments in same 1 or 2 funds? 13 November 2022 at 10:08PM in Savings & investments 4 replies 351 views

joeyboy

Hi folks. So I'm new to investing and after doing some research on options for saving and retirement I now have the following.. 

ISA with vanguard (LS100) 

LISA with dodl (hsbc ftse all world)

Firstly I was thinking of switching the LS100 to the vanguard global all cap. As after reading their own articles it seems they themselves say they wouldn't have such a weighting to the UK and its partly for marketing. Also personally not sure the UK is going to do that well in comparison to the world.. 

Then I was also considering a SIPP (I already match my employers contributions and it isn't SS)

My question is, is the idea these funds are diversified so much it wouldn't be too much of a problem to just pick between them for multiple products? 

For example if my isa was vanguard global all cap. And my Lisa is hsbc ftse all world. If I open a SIPP with whoever has the lowest fees and pick one of those same funds, is that all the eggs in two baskets and so problematic, or.. Are those baskets so wide it doesn't exactly matter? 

El_Torro

Both funds are very well diversified. There’s a lot of overlap between the two (both will invest a lot in Apple, to give an example) but there’s not really any harm in having both, or  even reducing to one.

I’m not really a fan of VLS100. You’ve already explained the main downside, so as long as you’re happy with what you’re getting that’s fine.

bd10

What you could also do with the LS100 if you're not keen on UK equities is to simply exclude it by building the LS100 yourself. Vanguard lists the split of the underlying funds. Or use a combination of their developed world ex UK and add their emerging market index fund to it. Might even save you a few percentage points on the total fee by constructing it yourself. But whether that's worth the hassle to exclude the remaining 3.8% UK allocation their global all cap has, tbh, not sure.

Albermarle

The potential downside is that they are all 100% equity and all heavily invested in the US.

This strategy is generally seen as fine for a younger person with a high risk threshold. However if markets tank, then they will go down at a similar rate. You have to be clear in your own mind that if they were to drop say 40% that you would not panic and sell.

EthicsGradient

The thing to be aware of if you use a purely All World/Global All Cap investment is that nearly all of your investment will then be overseas, and thus affected by the pound exchange rate (mainly with the dollar, a but with others). If you're happy that will benefit you (ie that the pound will tend to drop from where it is now), or to at least take the risk on which way it will trend, then OK; holding something like LS100 does give you a bit more of a stake in the pound, in which much of your expenditure will be (yes, we import a lot, but the economy is still basically a service economy where we mainly pay for British people's time).