Do I need to rebalance my ISA?

[bowtokingjesus]

Hi,

I have this allocation in my ISA right now:

• LifeStrategy® 80% Equity Fund - Accumulation 18.6%
• FTSE Developed World ex-U.K. Equity Index Fund - Accumulation 33.4%
• S&P 500 UCITS ETF - Distributing (VUSA) 47.2%

Each month I pay in to the FTSE and S&P funds, though the S&P growth outpaces the FTSE fund.

This is all in Vanguard, where I also have a SIPP (not included above) allocated to:

• Target Retirement 2045 Fund - Accumulation

Any recommendations for me? 35yrs

Thanks

 

[filu63]

@bowtokingjesus Can you tell us more about why you originally chose this allocation?

 

[bowtokingjesus]

@filu63 Initially I was informed by YouTube more than Reddit, and the LifeStrategy fund was a straight-forward way to start investing. I chose medium/high risk at 80%.It's got the lowest return of the three.

FTSE Developed World ex-U.K. seemed like a global equivalent of a S&P500, where I didn't have much faith in the UK post Brexit.

S&P500 cause Redditors seem to have it as a go to.

The FTSE fund has returned the most pound for pound.

 

[filu63]

@bowtokingjesus It sounds like you're just picking up funds as you hear about them. There is substantial overlap between your three funds.

I'd go back to basics and read a book about investing from https://ukpersonal.finance/recommended-resources/, then think about your investing strategy and goals and which fund(s) best meet them.

Littel bit of the wiki here is also relevant for you: https://ukpersonal.finance/index-funds/#I_dont_know_which_one_to_pick_should_I_buy_some_of_each

 

[portiaraylee]

@bowtokingjesus What you have here is essentially:

• Global investment (the FTSE fund excludes the UK, but the LifeStrategy fund is biased towards the UK - so this mostly balances out)
• ...With a significant lean towards the US (from the S&P fund)
• ...With a small percentage of bonds (less than 4%) coming from the LifeStrategy fund

Do you want to be biased towards the US? Do you want to invest in the UK? What percentage of bonds do you want?

Don't think in terms of "is this fund good to own?" - rather, think "overall, how do I want my investments to be spread around the world, in different sectors, and in stocks vs bonds", and then pick a simple set of funds which give you what you want.

 

[doomedhyclic]

@bowtokingjesus This is all personal feelings, so take it with appropriate sized pinch of salt:

I avoid LS funds as they are heavily UK weighted.

I would avoid S&P500 since, although it has performed phenomenally well in the recent past, it is not very diversified.

I avoided target date retirement funds (before I retired) as they are designed to move holdings into bonds and cash as the retirement date approaches, but this will reduce your returns which you need long after you've retired (plus these days no one retires on a set date with a gold clock, retirement is flexible).

I am trying to simplify my own holdings as much as possible, to just a single diversified fund (the "infamous" Vanguard FTSE Global All Cap Index Fund GBP Acc).