What's your portfolio?

aroominyork

@random321, I doubt anyone could find anything to criticise here. One of the benefits of sticking to index funds broadly aligned to global cap weighting is that if the market moves against you, you can just shrug your shoulders. If you make active fund decisions which work against you it is less easy to be sanguine.

redlightbulb

Late 30's

£181K split between

Cash - (7%)
ISA - Vanguard Global All Cap - (38%)
LISA - HSBC All World - (1%)
Crypto (Bitcoin) - (1.5%)
GIA (individual shares) - (0.5%)

SIPP - Vanguard Global All Cap - (45%)
Work pension - PP global up to 100% shares - (7%)

I was in VLS 80 prior to the Global All Cap,  I think a lot of newbie investors chose this line of funds initially.
I knew there was a UK bias, but I didn't realise just how large it was.
After more research and in part thanks to this forum, I changed to Global All Cap a few years ago.
Where I plan to stay indefinitely (at least closing on to retirement when I will evaluate)

Niv

chris021 said:

Late 30's

£181K split between

Cash - (7%)
ISA - Vanguard Global All Cap - (38%)
LISA - HSBC All World - (1%)
Crypto (Bitcoin) - (1.5%)
GIA (individual shares) - (0.5%)

SIPP - Vanguard Global All Cap - (45%)
Work pension - PP global up to 100% shares - (7%)

I was in VLS 80 prior to the Global All Cap,  I think a lot of newbie investors chose this line of funds initially.
I knew there was a UK bias, but I didn't realise just how large it was.
After more research and in part thanks to this forum, I changed to Global All Cap a few years ago.
Where I plan to stay indefinitely (at least closing on to retirement when I will evaluate)

Hi chris. By Vanguard Global All Cap is it the FTSE Global All Cap Index Fund (VAFTGAG)?

Zoe02

For my ISA i had previous funds but sold them all and now have Vanguard Global All Cap is it the FTSE Global All Cap Index Fund 

For shares I have some Marks and spencer holding of 7705 shares (did their sharesave scheme whilst working part time as a student)

I also have Royal Mail now IDS Plc which i was going to sell but recently gone up with the proposed sale  holding of 359 shares. 

redlightbulb

Niv said:

chris021 said:

Late 30's

£181K split between

Cash - (7%)
ISA - Vanguard Global All Cap - (38%)
LISA - HSBC All World - (1%)
Crypto (Bitcoin) - (1.5%)
GIA (individual shares) - (0.5%)

SIPP - Vanguard Global All Cap - (45%)
Work pension - PP global up to 100% shares - (7%)

I was in VLS 80 prior to the Global All Cap,  I think a lot of newbie investors chose this line of funds initially.
I knew there was a UK bias, but I didn't realise just how large it was.
After more research and in part thanks to this forum, I changed to Global All Cap a few years ago.
Where I plan to stay indefinitely (at least closing on to retirement when I will evaluate)

Hi chris. By Vanguard Global All Cap is it the FTSE Global All Cap Index Fund (VAFTGAG)?

Hi Niv,

Yes, that is the fund. 

aroominyork

masonic said:

aroominyork said:

Masonic, what flavour are you planning?

I'd just opt for an unhedged global aggregate fund or ETF. There is an iShares Core ETF that looks to fit the bill. Unhedged because historically that has delivered the best risk-adjusted return in combination with equities. Perhaps as there is a flight to the global reserve currency (currently USD and not likely to become GBP again) in times of fear.

I want to come back to this subject which started on page 2 of this thread. This article by Vanguard strongly advocates hedging global bonds (no surprise there) but includes this data about the benefits of hedging during a stock market downturn:

Below is the global equity market and GBP-USD rates, both over 20 years. You can certainly see some USD strengthening during market downturns but the pattern is not clear enough - and the other variables are so many - that I am not yet convinced about unhedged global bonds. Views please?

PS They say exchange rates revert to the norm over time, but what is the norm for USD? If you start from c.2016 you could say £1=$1.30 but is that just a convenient point in time for identifying a pattern?

masonic

Vanguard are using data from 2000 to present, so it is good that this will include the dotcom crash (presumably), but not so good that the other two crashes are the global financial crisis and Covid crash where one started as a financial crash and the other happened during a time of extreme interest rates. That aside, what this data tells me is that it is a coin toss whether bonds will rise or fall when equities are falling, and there is little difference between flavours except in the extreme. The median and inter-quartile range of all three are equivalent, and it is only the extreme 5th and 95th percentiles where currency hedging is having a significant effect.

If you are a cautious investor, then hedged global is less volatile, has much less tail risk, and you should probably hold that, no arguments there. However, if you want more equities in your portfolio than bonds (say 60:40), which of these will deliver the best risk-adjusted return? Not necessarily the lowest volatility flavour. Volatility can contribute to returns when the diversifying asset has its own periods of good and bad returns outside of the periods when equities are tanking. Interestingly, the central case in the UK appears to be UK bonds are best by a nose, which is not what I would have assumed.

If it really is the case that bonds will fall almost as often as they will rise during equity crashes, then perhaps they aren't the best diversifying asset to hold, but I'm not convinced this data is representative of the normal economic situation (i.e. a situation where interest rates can be cut to stimulate the economy).

Eskdale_investor

Here is my S&S ISA. 15-20 year investment timescale.

LifeStrategy100: 61%

FTSE Developed Europe ex UK UCITS ETF VERG - Accumulating: 5.9%

FTSE Developed World ex-U.K. Equity Index Fund VDWXEIA: 8.4%

Vanguard ESG Emerging Markets All Cap Equity Index Fund: 3.7%

ESG Developed Asia Pacific All Cap UCITS ETF - Accumulating V3PB: 2.5%

S&P 500 UCITS ETF VUAG: 18.6%

aroominyork

Eskdale_investor said:

Here is my S&S ISA. 15-20 year investment timescale.

LifeStrategy100: 61%

FTSE Developed Europe ex UK UCITS ETF VERG - Accumulating: 5.9%

FTSE Developed World ex-U.K. Equity Index Fund VDWXEIA: 8.4%

Vanguard ESG Emerging Markets All Cap Equity Index Fund: 3.7%

ESG Developed Asia Pacific All Cap UCITS ETF - Accumulating V3PB: 2.5%

S&P 500 UCITS ETF VUAG: 18.6%

That's one heck of a complicated way to build a portfolio which starts with VLS100 then reduces the UK overweight. The way I calculate it you have:

UK 13%

Europe 14%

USA 55%

Japan 4%

Emerging markets 7%

Developed AP 7%.

If you simply went 50/50 between VLS100 and HSBC FTSE All World Index you wouldn't be much different:

UK 13%

Europe 11.5%

USA 57%

Japan 5.5%

Emerging markets 7%

Developed AP 6%.

Or 90% HSBC and 10% UK tracker would be 14%, 11%, 58%, 5%, 7%, 5%.