Advice on investing in passive funds

J J

JWCH-99

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Advice needed!

I’ve been looking to put some money each month into a fund/ETF. I have no interest in actively trading and am looking for a long term consistent investment into a fund with a relatively good return. I’ll be doing it through a stocks and shares ISA and once I max that limit (I have a LISA as well) I will probably use a SIPP.

Vanguard looks like the easiest for me due to offering all the major funds, lower fees and the time some of there funds have been available gives a good indication of their success.
As I mentioned earlier I ideally would be looking at investing monthly with an initial lump sump and continuing to do so for 30+ years to build a pension pot.

Having done a bit of research on index funds vs ETFs I’m not sure if there are any major differences that make me more interested in one than another- the only thing with the Vanguard index funds is the accumulation and reinvestment of dividend automatically, which id want.
I have no interest in bonds particularly at this stage as I don’t feel I need the security at my age or an urgent need for a safe, lower risk return.I have time to see out any crashes etc

After researching I’d landed on the following 2 index funds to invest in with a 50/50 split.

- Vanguard Global all cap index fund as opposed to the VWRL to give a bit more diversity and protection in case the major US large company stocks are overvalued at this time. Also includes more diversity in terms of types of business and more from emerging markets.

- Vanguard US total equity fund. As opposed to S&P500 ETF (VUSA) - again as above to include more small and mid size companies instead- although maybe a smaller rate of return slightly it offers a bit more protection?

Any thoughts on this would be really helpful? Please don’t be too harsh in your judgement I’m a super novice!
 
JWCH-99 said:
Advice needed!

I’ve been looking to put some money each month into a fund/ETF. I have no interest in actively trading and am looking for a long term consistent investment into a fund with a relatively good return. I’ll be doing it through a stocks and shares ISA and once I max that limit (I have a LISA as well) I will probably use a SIPP.

Vanguard looks like the easiest for me due to offering all the major funds, lower fees and the time some of there funds have been available gives a good indication of their success.
As I mentioned earlier I ideally would be looking at investing monthly with an initial lump sump and continuing to do so for 30+ years to build a pension pot.

Having done a bit of research on index funds vs ETFs I’m not sure if there are any major differences that make me more interested in one than another- the only thing with the Vanguard index funds is the accumulation and reinvestment of dividend automatically, which id want.
I have no interest in bonds particularly at this stage as I don’t feel I need the security at my age or an urgent need for a safe, lower risk return.I have time to see out any crashes etc

After researching I’d landed on the following 2 index funds to invest in with a 50/50 split.

- Vanguard Global all cap index fund as opposed to the VWRL to give a bit more diversity and protection in case the major US large company stocks are overvalued at this time. Also includes more diversity in terms of types of business and more from emerging markets.

- Vanguard US total equity fund. As opposed to S&P500 ETF (VUSA) - again as above to include more small and mid size companies instead- although maybe a smaller rate of return slightly it offers a bit more protection?

Any thoughts on this would be really helpful? Please don’t be too harsh in your judgement I’m a super novice!
Click to expand...
The small and mid cap will probably give you better return over the longer term as those businesses grow.

You should consider being properly diversified by adding cash, commodities, gold, and bonds (when you feel the dip is bottomed out) as well. I also have a few specialised global trackers for health (good defensive), tech, clean energy…..I am also researching the best AI funds right now to add that too.
 
DenisLawBackHeel74 said:
The small and mid cap will probably give you better return over the longer term as those businesses grow.

You should consider being properly diversified by adding cash, commodities, gold, and bonds (when you feel the dip is bottomed out) as well. I also have a few specialised global trackers for health (good defensive), tech, clean energy…..I am also researching the best AI funds right now to add that too.
Click to expand...
Cheers mate. I guess it comes with time spent researching these things and being involved with them to have the confidence to pick more specialised trackers- although I like the sound of the AI one! I had hesitated with the bonds as I felt the money was better spent at this point in my life spent in equity instead due to the better returns over time! I didn’t even realise that you could invest in cash!
 
You have done more research than I did.
I put mine into a nutmeg stocks and shares isa because a stranger on LinkedIn recommend it to me (so they could get free management fees).
Opened it in March 2021 so as you can imagine, I've lost a few quid.
Will probably take most of it back out in about 15 months to pay final payment on my car so doubt I'll get back to even in that time.
 
JWCH-99 said:
Cheers mate. I guess it comes with time spent researching these things and being involved with them to have the confidence to pick more specialised trackers- although I like the sound of the AI one! I had hesitated with the bonds as I felt the money was better spent at this point in my life spent in equity instead due to the better returns over time! I didn’t even realise that you could invest in cash!
Click to expand...
As long as you are properly diversified you should be able to weather any storm potentially. I‘ve done well in my tech trackers over the past few years and hope these continue to show good returns. The cash fund is really a hedge as it won’t provide huge returns but it’s fairly stable and with interest rate increases it will give you a reasonable return.
 
Are premium bonds still worthwhile? Don't lose anything and a chance of winning cash prizes up to a million every month
 
Premium bonds average return is currently 3.3% tax free.
The best unlimited withdrawal easy access account with no restrictions pays 3.47% and is taxable.

Hardly worth bothering and enjoy the chance of a big win.
 
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denislawsbackheel said:
Premium bonds average return is currently 3.3% tax free.
The best unlimited withdrawal easy access account with no restrictions pays 3.47% and is taxable.

Hardly worth bothering and enjoy the chance of a big win.
Click to expand...
Over the last few years I've done OK with premium bonds when compared to my fixed rate cash ISA. Thats changed a little recently with the interest rate increases and the ISA fixed rate coming to an end. I've locked in for 2 more years at 4.11% so expect to do a bit better with that than the bonds, unless I get very lucky. I think i'm correct oin saying as the interest rate rises so does the PB prize fund, so more small prize payouts which add up over time. Last 6 months I've averaging about £125-£150/month on the full 50k allowance, which is 3-3.6% pa, which seems to be bang on average
 
denislawsbackheel said:
Premium bonds average return is currently 3.3% tax free.
The best unlimited withdrawal easy access account with no restrictions pays 3.47% and is taxable.

Hardly worth bothering and enjoy the chance of a big win.
Click to expand...
Got just over 38,000 of them...return is nothing sparkling but it puts a smile on my face every month, I have it so it's automatically reinvested on the wins, risk free, easy access and the chance of the biggy but as mentioned there are better returns available but at a higher risk.
 
2 pages and only one sensible reply. Someone once said Times, they are a changing.
If it wasnt for MES the OP would now be going on a Saga holiday, driving a Volvo and voting Tory.
I'm not even going to waste my time mentioning my mate who runs a Chinchilla farm in Ecuador and guarantees a 39% return on investment.
 
I used to have a very simple rule.
Keep it simple.
I used to just invest in 1 company at a time , RBS or Barclays as they were highly volatile . Breaking every rule in the investment book that says spread your risk.
Bought on the way down, sold on the way up when the gain was about £60-70 k.
23 successful deals later in March 23,I called it a day in share dealing against my wife’s wishes. Glad I did because the shares are now worth £40 k less than when I sold them.
I now invest in land without planning permission, much more of a steady Eddie approach.
You can do as much research as you like, but without a crystal ball, it’s a lottery in this uncertain world we now live in.
 
halfmist said:
I used to have a very simple rule.
Keep it simple.
I used to just invest in 1 company at a time , RBS or Barclays as they were highly volatile . Breaking every rule in the investment book that says spread your risk.
Bought on the way down, sold on the way up when the gain was about £60-70 k.
23 successful deals later in March 23,I called it a day in share dealing against my wife’s wishes. Glad I did because the shares are now worth £40 k less than when I sold them.
I now invest in land without planning permission, much more of a steady Eddie approach.
You can do as much research as you like, but without a crystal ball, it’s a lottery in this uncertain world we now live in.
Click to expand...
Chinchilla farm ?
 
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