Rebalancing the portfolio

justonemorething

Hi All,

I'm currently 90:10 split of equities/bonds and am at the point where I think I'll be retiring in the next 4 years or so, and am looking to rebalance down to something like 70:30.

My currently thinking is to have up to 2 years' cash in cash isa/ns&i/short term money market fund (for easy access, on top of a standard current account) and years 3-5 in a "simple" bond fund. It's the latter I'm tossing up as to which fund/options to pick. I'm pretty much in HSBC FTSE all world acc for the equities side, again for simplicity.

The one that seems to crop up a lot is VAGS, but I've also seen other comments saying stick with a short term gilt fund instead, so I'm interested to see what others have done here to protect against SORR?

Thanks!

InvesterJones

If the purpose of the bond fund is to provide uncorrelated performance to equities (so you don't have to crystallise bad performance) then have a look how the funds have performed in recent periods of stress like the pandemic or the tariff hikes or iran war - you may see that VAGS didn't diversify much from equities, while a money market fund did.