Advice on investing in passive funds

J J

JWCH-99

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Manchester CIty
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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