A few questions as a new UK based boglehead

For investors outside the US. Personal investments, personal finance, investing news and theory.
Sister forums: Canada, Spain (en español)
---------------
Post Reply
Topic Author
Impensus
Posts: 3
Joined: Thu Apr 22, 2021 12:27 pm

A few questions as a new UK based boglehead

Post by Impensus »

Hey everyone, I'm a relatively new UK based investor looking for some assistance on choosing my portfolio holdings. I want to make sure I get it right so I don't doubt myself and change my holdings over the 25+ year horizon I am looking to invest over.

Currently my holdings are:

65% VUSA - Vanguard S&P 500 ETF
30% VWRL - Vanguard FTSE All-World
5% - into more speculative ETFs

However, I have been informed that VWRL overlaps heavily with VUSA.

What I was attempting to do, was craft my own portfolio with exposure to the US (via VUSA as I already own quite a few shares of that) + exposure to the international market (via VWRL), but didn't realise how US heavy that was.

Should I sell my holdings and set my portfolio as 100% VWRL for peace of mind? I am not looking to have bond exposure as I am still very young.

In addition to this, I know the S&P500 returns around 8% historically. Is there a way to compare the performance of VWRL? I want to ensure it is a solid holding if I am going to be investing consistently into it over a long time period.

I really appreciate anyone who takes the time to reply! Thank you :)
Genghis
Posts: 138
Joined: Fri Jun 26, 2020 6:53 am

Re: A few questions as a new UK based boglehead

Post by Genghis »

As at the end of March, the US was 56.7% of VWRL (https://www.vanguardinvestor.co.uk/inve ... g/overview) so I make it that you have at least 65% + 56.7% x 30% = 82% US holdings.

Many non US recommend a global portfolio. Have a read of Lars Kroijer’s book Investing Demystified, for good arguments.

If you’d wanted to do true slice and dice, you could have added holdings say for US + Europe (ex UK and then add UK separately or with UK), Developed Asia ex Japan, Japan, Emerging Markets etc. There are a few countries you miss notably Canada. It’s a proper faff IMO to maintain such a portfolio. I used to do it.

I then moved to a developed world + EM portfolio which is perhaps a good balance between keep it simple and costs.

VWRL is a good option.

Bear in mind that we also have access to some good OEICs: HSBC All World C at 0.13% OCF and the Vanguard Global All cap which includes small cap for 0.23%, so if you can get an OEIC friendly broker, could be a good idea.

Monevator did a good article recently on global funds with returns. They won’t be as high as US only as its performance has been stellar the past 10 years or so. But what will happen in the future??... (I can’t find a link now. Take a look yourself).
Genghis
Posts: 138
Joined: Fri Jun 26, 2020 6:53 am

Re: A few questions as a new UK based boglehead

Post by Genghis »

Here is the Monevator article I was on about
https://monevator.com/best-global-tracker-funds/
Topic Author
Impensus
Posts: 3
Joined: Thu Apr 22, 2021 12:27 pm

Re: A few questions as a new UK based boglehead

Post by Impensus »

Genghis wrote: Thu Apr 22, 2021 2:50 pm Here is the Monevator article I was on about
https://monevator.com/best-global-tracker-funds/
Thank you for this article it was really useful! Off the back of it I have a few questions:

Firstly, I have a stocks and shares ISA with trading212 and currently still own some individual stocks. The article recommends index funds for an investor who DCA's a few hundred a month (me fitting that category) but I cannot access some of the index funds on T212. Should I transfer my ISA elsewhere where I can access some or is it nothing to lose sleep over?

I'm also thinking of just going 100% VWRL for a simple portfolio that I can just DCA into and not lose sleep over. Is this 1 - something you would advise and 2- similar to just going the 100% VT route like American Bogleheads usually do?

Finally I have read into OEICs a bit but again, I'm unsure if switching brokers just to access them for me. Again is there much benefit to this or should I just stick with my VWRL only strategy?

I really do appreciate the time you have taken to reply so far :)
Genghis
Posts: 138
Joined: Fri Jun 26, 2020 6:53 am

Re: A few questions as a new UK based boglehead

Post by Genghis »

I think the best boglehead principles you can take forward are keep it simple and to stay the course.

Keeping your Trading 212 ISA and adding every month to VWRL (a globally diversified portfolio) sounds like a reasonable plan. Others like Trading 212.

I tried Trading 212 with a tiny amount and I didn’t like it. Having access on your phone means you check prices often and as the saying goes, if you’re not paying for something, you’re the product. I don’t know how good their execution is vs alternatives and I know the CFD business subsidises the rest of the business (increased broker risk?). I like iWeb for simplicity though set up fee is now £100.

ETFs and OEICs are just different - look into it. I use both but don’t really favour one over the other as a buy and hold investor.
Topic Author
Impensus
Posts: 3
Joined: Thu Apr 22, 2021 12:27 pm

Re: A few questions as a new UK based boglehead

Post by Impensus »

Genghis wrote: Sat Apr 24, 2021 8:51 am I think the best boglehead principles you can take forward are keep it simple and to stay the course.

Keeping your Trading 212 ISA and adding every month to VWRL (a globally diversified portfolio) sounds like a reasonable plan. Others like Trading 212.

I tried Trading 212 with a tiny amount and I didn’t like it. Having access on your phone means you check prices often and as the saying goes, if you’re not paying for something, you’re the product. I don’t know how good their execution is vs alternatives and I know the CFD business subsidises the rest of the business (increased broker risk?). I like iWeb for simplicity though set up fee is now £100.

ETFs and OEICs are just different - look into it. I use both but don’t really favour one over the other as a buy and hold investor.
Brilliant, I will stick the course and go with my original plan. Thank you for sharing your wisdom :)
User avatar
Forester
Posts: 2400
Joined: Sat Jan 19, 2019 1:50 pm
Location: UK

Re: A few questions as a new UK based boglehead

Post by Forester »

100% VWRL is a good idea. If you want to tilt to value, iShares IWFV @ 0.30% expense ratio is worth considering as is iShares WLDS world small cap.
Amateur Self-Taught Senior Macro Strategist
Post Reply