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  • FIRST POST
    • bcfclee27
    • By bcfclee27 9th Mar 18, 8:52 PM
    • 185Posts
    • 46Thanks
    bcfclee27
    Another wacky idea....
    • #1
    • 9th Mar 18, 8:52 PM
    Another wacky idea.... 9th Mar 18 at 8:52 PM
    Now go easy on me remember I'm still learning....

    I wanted to invest in the below funds to go along side my HSBC / VLS funds.

    Once all tucked up in an ISA wrapper I will have about 120k in VLS and HSBC global strategy.

    I wanted to invest in areas not covered as much in theses such as the below ones.

    What I want to do is invest 1,000 in each fund. So very small amounts in the grand scheme of my investments.

    I would then rebalance the 4 funds where needed to keep them all at 25% allocation of the 4,000. Basically I would treat this completely separate to the main funds in VLS & HSBC.

    I know they are 100% equities and technically this would up my equity percentage and also risk. However I'm really not bothered by this and the more I'm learning the more I feel my risk level is rising.

    The ones I want to invest in are Vanguards below...


    - FTSE developed Europe ex uk equity index fund accumulation.
    - Emerging markets stock index fund accumulation.
    - Pacific ex Japan stock index fund accumulation.
    - Japan stock index fund accumulation.

    Is there anything wrong with what im proposing to do ?
Page 1
    • bostonerimus
    • By bostonerimus 9th Mar 18, 9:14 PM
    • 1,936 Posts
    • 1,277 Thanks
    bostonerimus
    • #2
    • 9th Mar 18, 9:14 PM
    • #2
    • 9th Mar 18, 9:14 PM
    Over weighting certain sectors, geographical areas etc is a common practice. Whether it is useful is debatable. There is research that emphasizing small cap and value funds can boost returns, but I think most times the benefits are mostly psychological. This sort of slicing and dicing makes people feel as if they are doing something.
    Misanthrope in search of similar for mutual loathing
    • Alexland
    • By Alexland 9th Mar 18, 9:27 PM
    • 2,571 Posts
    • 1,953 Thanks
    Alexland
    • #3
    • 9th Mar 18, 9:27 PM
    • #3
    • 9th Mar 18, 9:27 PM
    I don't have an issue with what you are proposing - it's your money and multi asset funds are very US heavy.

    Just remember that a little knowledge can be dangerous and even if these funds outperform your multi asset funds it could just be plain chance.

    Alex.
    • Alistair31
    • By Alistair31 9th Mar 18, 9:33 PM
    • 35 Posts
    • 26 Thanks
    Alistair31
    • #4
    • 9th Mar 18, 9:33 PM
    • #4
    • 9th Mar 18, 9:33 PM
    Similarly, I am thinking of taking a punt on Japanese equities with next years LiSA allowance, as a sort of experiment.

    Just not sure which fund yet.
    • Thrugelmir
    • By Thrugelmir 9th Mar 18, 10:48 PM
    • 58,925 Posts
    • 52,250 Thanks
    Thrugelmir
    • #5
    • 9th Mar 18, 10:48 PM
    • #5
    • 9th Mar 18, 10:48 PM
    Might as well invest the entire 4k into UK smaller companies or a global emerging markets fund/investment trust. As that's area's where you have no exposure currently.

    Holding 1k in a single fund is going to have a minimal impact on your overall portfolio. A 10% rise is only 100. Put in context of a 124k portfolio. Neither here nor there.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • AnotherJoe
    • By AnotherJoe 10th Mar 18, 1:11 AM
    • 9,605 Posts
    • 10,683 Thanks
    AnotherJoe
    • #6
    • 10th Mar 18, 1:11 AM
    • #6
    • 10th Mar 18, 1:11 AM
    Is there anything wrong with what im proposing to do ?
    Originally posted by bcfclee27
    Yes, relatively speaking its such a small % its not worth the effort when split 4 ways.
    Its hardly worth it even as one fund so I'd say invest more, but at least, put it all in one fund only.
    • Alexland
    • By Alexland 10th Mar 18, 7:32 AM
    • 2,571 Posts
    • 1,953 Thanks
    Alexland
    • #7
    • 10th Mar 18, 7:32 AM
    • #7
    • 10th Mar 18, 7:32 AM
    Having seen your previous deliberations that ended up in your holding VLS60, 80, HSBC GS Balanced and Dynamic it might be an option for you to stick with just the 60/Balanced funds and make up the remainder of your equity allocation from market trackers. HSBC GS Balanced is the boring core of my investments.
    Last edited by Alexland; 10-03-2018 at 7:55 AM.
    • Audaxer
    • By Audaxer 10th Mar 18, 9:37 AM
    • 1,080 Posts
    • 634 Thanks
    Audaxer
    • #8
    • 10th Mar 18, 9:37 AM
    • #8
    • 10th Mar 18, 9:37 AM
    In my view you are looking to experiment a bit with the 4k to see what sort of returns you get. So if after a few years the percentage returns in these funds very look good compared to your VLS/HSBC funds, what are you going to do? You might then decide that these funds are doing so well that you will move more of the VLS/HSBC money into them, say 5k each. But they might then hit a bad patch and you see a significant fall in the value of the 20k. Will you be prepared to hold them until they recover or will you be questioning whether it was a good idea after all, and sell and cut your losses?
    • fun4everyone
    • By fun4everyone 10th Mar 18, 10:32 AM
    • 995 Posts
    • 1,529 Thanks
    fun4everyone
    • #9
    • 10th Mar 18, 10:32 AM
    • #9
    • 10th Mar 18, 10:32 AM
    I know they are 100% equities and technically this would up my equity percentage and also risk. However I'm really not bothered by this and the more I'm learning the more I feel my risk level is rising.

    The ones I want to invest in are Vanguards below...


    - FTSE developed Europe ex uk equity index fund accumulation.
    - Emerging markets stock index fund accumulation.
    - Pacific ex Japan stock index fund accumulation.
    - Japan stock index fund accumulation.

    Is there anything wrong with what im proposing to do ?
    Originally posted by bcfclee27

    You already are going to have 120k in your core investments and it appears like this 4k is just going to be to see what you can do with it as you are "not bothered" about the risk and its "completely seperate" to your main investment.

    IMO then you should try and learn about things that you don't currently have exposure to. Sure, VLS is mostly the US and an overweight of the UK but those passive funds you list for this 4k are exactly what makes up the rest of VLS and you basically have all of this already.

    Why not look at stuff you don't have? Actively managed emerging market funds. Micro cap funds. Small cap funds for different regions like Japan or Europe. Actively managed European funds. Frontier markets.

    All sorts of things out there that VLS does not touch that you are missing out on. So if you are really not worried about the risk and its completely seperate then take this 4k as an opportunity to have a look.
    • Voyager2002
    • By Voyager2002 10th Mar 18, 10:48 AM
    • 12,143 Posts
    • 8,262 Thanks
    Voyager2002
    The main point is that 4K represents about 3% of your portfolio, so it does not really matter: whether it performs spectacularly or is a total loss it will not make a noticeable difference to your eventual pension. So you might as well use it for experimentation and learning. Make sure that you do not learn any wrong or dangerous lessons: it is entirely possible that an actively managed fund for Russian small business (for example: actually this something I am seeking but it does not exist) might produce spectacular gains over the next five years, but such a sector is so high risk that it should never account for more than a couple of per cent of your portfolio.
    • bcfclee27
    • By bcfclee27 10th Mar 18, 3:44 PM
    • 185 Posts
    • 46 Thanks
    bcfclee27
    Thanks everyone as usual a really helpful bunch !!!

    Ok so I'm looking at areas ideally investing in vanguards platform that are not really covered by either VLS or HSBC Global Strategy....

    What could I look at that would cover this ?

    Many thanks
    • bcfclee27
    • By bcfclee27 10th Mar 18, 3:54 PM
    • 185 Posts
    • 46 Thanks
    bcfclee27
    Might as well invest the entire 4k into UK smaller companies or a global emerging markets fund/investment trust. As that's area's where you have no exposure currently.

    Holding 1k in a single fund is going to have a minimal impact on your overall portfolio. A 10% rise is only 100. Put in context of a 124k portfolio. Neither here nor there.
    Originally posted by Thrugelmir
    Vanguard have a Global Emerging markets fund and an Emerging markets stock index fund.

    What is the difference between the 2 ?
    • fun4everyone
    • By fun4everyone 10th Mar 18, 3:57 PM
    • 995 Posts
    • 1,529 Thanks
    fun4everyone
    Vanguard are a great company who we are really lucky to have available to us as retail investors in the UK, but if you want to explore avenues outside of VLS type funds you need another platform. Maybe look at Charles Stanley Direct for the 4000.
    • bcfclee27
    • By bcfclee27 10th Mar 18, 7:37 PM
    • 185 Posts
    • 46 Thanks
    bcfclee27
    How about the Vanguard Global small-cap index fund.

    If I were to put the 4K into this - would it be a viable option for a fund that VLS under represents ?
    • bostonerimus
    • By bostonerimus 10th Mar 18, 8:51 PM
    • 1,936 Posts
    • 1,277 Thanks
    bostonerimus
    No one knows what global small cap or EM are going to do in the future......so Vanguard Global Small Cap is as good as anything else. You are really throwing darts here. Take a step back and come up with an asset allocation that matches your appetite for risk and then implement it.
    Misanthrope in search of similar for mutual loathing
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