Do my investments look broadly OK

Mistermeaner

Hi would appreciate a quick review and comment from the knowleable folk on here regards whether my investment portfolio looks generally sensible or whether there's any obvious gaps  clangers in here. Its kind of grown organically over time general principle has been to diversify globally at low cost. This is combined totals of mine and my missus main investments and ignores current account where we have a decent 10K+ cash buffer

Age 45 with plans to retire ASAP

Instant access - total £59K

Cash ISA (4.5%) £10,418

S&S ISA
HSBC ftse all world index £8801
VLS Acc 100 £13898
L&G multi index 7 £1868
S&P 500 index £16091
Vanguard small cap £7814


Pensions/LISA total £1.07mil
HSBC ftse all world index £150412
VLS Acc 100 £69647
L&G multi index 7 £3041
Mercer passive global equity index £844376


Main thoughts are whether any of this should be diversified away from global equities and if so how much and where to?

Saw a drop of over £100K with all the recent shenanigans which I am comfortable with - no panic (if anything i piled in more with some spare cash i had). I continue to invest monthly in all the of the above at the moment 

thanks

QrizB

Mistermeaner said:

Age 45 with plans to retire ASAP

So, while you're on the verge of retiring, you're still expecting to remain invested for at least 40 years and possibly 60 years.

Mistermeaner said:

Main thoughts are whether any of this should be diversified away from global equities

With a 40-60 year investment horizon, global equities seems to me to be the ideal place to be.

Whether your particular funds are ideal or not, I'll leave to others (noting that VLS100 is rarely favoured here).

Hoenir

Mistermeaner said:

Saw a drop of over £100K with all the recent shenanigans which I am comfortable with - no panic (if anything i piled in more with some spare cash i had). I continue to invest monthly in all the of the above at the moment 

Would you be comfortable with a further 10% - 20% fall? 

dunstonh

Age 45 with plans to retire ASAP

Seeing as you cannot touch the pension for another 12 years (possibly 13), you don't appear to have a lot in short term or accessible funds to achieve that goal.

Saw a drop of over £100K with all the recent shenanigans which I am comfortable with - no panic (if anything i piled in more with some spare cash i had). I continue to invest monthly in all the of the above at the moment 

The Trump slump losses are peanuts.     The loss potential on your portfolio over 12 months for 95% of periods is around 50%. (with a 5% of the time being greater than that).   So, if you can handle losing half your money, you can easily handle losing around 5-6% which is the current ballpark for global.

kempiejon

Broadly - probably.
How different your portfolio returns might have been compared a single global equity tracker only you can check. You will be paying something to all those managers, Vanguard, L&G, HSBC, etc are they adding value, ease or comfort for you? Or at least not detracting.
Assets other than cash and global equities which you have might include property, commodities, gold, bonds and fixed interest or more diverse alternatives, private equity, infrastructure, currencies. Exactly what different assets and weighting do to a total return I'm sure I don't know. Still a bit early for an annuity. 

By retire asap do you mean next month, next year or not until you have access to any pensions you've accrued?
When you do want to give up your income from employment it'd be handy to know your expected and historical expenses. Personal circumstance, kids, partner, health, housing etc all need accounting for and that's just the financials. If you've been at work for decades, putting in the 9-5 m-f what's the plan for all the time freed up?

Linton

The biggest issue I would have is the % US. Most global index funds are around 60-65% US.  But morningstar shows the Mercer fund, which represents about 80% of the total, at 70% US as of the end of February 2025  which is unusually high. Then you add in a S&P500 holding.

Such a high concentration in one area adds to volatility as you have seen and misses out on plenty of opportunities in the rest of the world. The Mercer fund for example as of the end of February contained 0% far east (exc Japan)  which in the light of the way the world is going seems perverse.

Also, if you plan to retire ASAP  a bit of derisking away from equity may have been prudent perhaps 5 years ago.  7% non-equity out of £1M is not, in my view,  a sensible asset allocation in retirement for most people.  However you haven't given us your future income/expenditure so it's impossible to suggest a reasonable amount.  You may have sufficient DB income so that your investments are pretty irrelevent or have income needs so high that high equity investing is the only way of achieving them

During my retirement I have worked on the basis of at least 5 -10 years expenditure in cash and low risk investments to cover ongoing expenses and large one-offs. An overall 60/40 split between equity and fixed interest is normally considered a good starting point.

PS just seen Dunstonh's post: Yes  you would not seem to have the money available to retire ASAP. 

Mistermeaner

Thanks all

ASAP means to me as soon as possible which would be when instant access can cover the gap to drawing pensions - likely 5+ years away minimum. Lots of expenses on the horizon, mortgage, 4 kids etc. so no illusions of lazy days yet!

It would seem sensible to reduce US exposure and also to move out of equities to some degree. Reducing US exposure should be straight forward enough by selling some S&P500 and also some of the mercer holdings and rebalancing that

What would be appropriate to reduce equity exposure - I have never understood nor 'liked' bonds but thats just my limitation - i've no idea what to look for regards bond funds. 

Likewise fixed interest I have never looked into; like does a fixed interest fund literally provide fixed interest or does it 'aim to' provide fixed interest but sometimes miss!

I mentioned before on here about selling a portion of my equities equivalent in value to my mortgage and putting that in something safe but advice was at the time to leave that in equiities due to timeframe (10-12 years) before i would need that

Thanks

Hoenir

Mistermeaner said:

What would be appropriate to reduce equity exposure - I have never understood nor 'liked' bonds but thats just my limitation - i've no idea what to look for regards bond funds. 

Bonds are far easier to understand than equities. Anyone can invest in an equity bull market. Momentum confirms the bias.  We are returning to a pre 2007 era. When equity markets were far more volatile over shorter time periods.  

Albermarle

You appear to have £70K in non tax protected cash.
With a 4 to 5% interest rate, you are presumably paying tax on some of the interest? Unless maybe your partner is a non earner, and it is mainly in their name ?

What would be appropriate to reduce equity exposure - I have never understood nor 'liked' bonds but thats just my limitation - i've no idea what to look for regards bond funds. 

Bonds are the classic way to reduce volatility. So the idea is if stock markets slump, then bonds should at least stay stable, or even go up. It does not always work, and in 2002 they also slumped badly, but that was a very unusual set  of circumstances.
I would not be qualified to get into the detail of bond funds, but just to say it is popular to just use funds that contain a % of equity and a % of bonds, rather than individual investments. So called multi asset funds.

Linton

Mistermeaner said:

Thanks all

ASAP means to me as soon as possible which would be when instant access can cover the gap to drawing pensions - likely 5+ years away minimum. Lots of expenses on the horizon, mortgage, 4 kids etc. so no illusions of lazy days yet!

It would seem sensible to reduce US exposure and also to move out of equities to some degree. Reducing US exposure should be straight forward enough by selling some S&P500 and also some of the mercer holdings and rebalancing that

What would be appropriate to reduce equity exposure - I have never understood nor 'liked' bonds but thats just my limitation - i've no idea what to look for regards bond funds. 

Likewise fixed interest I have never looked into; like does a fixed interest fund literally provide fixed interest or does it 'aim to' provide fixed interest but sometimes miss!

I mentioned before on here about selling a portion of my equities equivalent in value to my mortgage and putting that in something safe but advice was at the time to leave that in equiities due to timeframe (10-12 years) before i would need that

Thanks

Bonds are just one example of fixed interest. There are other options.

Gilt bonds are very safe as long as you sell at maturity. Their ongoing interest in £ terms and their value at maturity are both guaranteed by the UK government.  Unexpected capital losses may arise if you sell well before maturity.  So I would suggest you look at a short dated (perhaps 5 year or less) gilt fund of which there are a few around.

Other less mainstream options include infrastructure or property (REITS) where the income comes from long term contracts based on wind farms and other high cost facilities.  These can be quite volatile and so can be of use for diversification but are less suitable for de-risking.

Another area to be considered is "wealth preservation" funds where the fund is
 managed to provide an above inflation return over say 5 years.  These were more popular during the period of very low interest rates.  Look at their long term performance graphs. 

With your level of investments I would not consider paying off the mortgage unless the interest was onerous.  The money is probably better invested in equity at least for the medium/long term

ali_bear

I really can't comment on those investments but I would make a general comment about staying invested in equities, ignore any short-term volatility and if there is a significant dip, buy more equities afterward. 

Make a plan. Serious about stopping work at 50? Good for you but you'll want to be debt free or at least on a pathway to it, with accessible savings to live well off until you can draw on pension funds. 

If you are invested in equities the important thing is not to have to sell them when they are poorly valued. That's the reason for holding some cash and bonds.