Best Way to Invest £20,000 ISA Allowance? Rate My Strategy

Investment Ideas
1

My Stocks and Share ISA Index Fund Investment Strategy

It would be great to get some advice and what you think on my investment strategy.

So we £20,000 per year to invest in our S&S ISA.

Here is what I’m splitting up my portfolio into and diversifying (or maybe not so)

Portfolio 1 - Money Market Fund
Lyxor Smart Overnight Return (CSH2) - 100% £7K

Invest £7000 per annum in portfolio 1

Portfolio 2 - DIY All World (to keep low fees at 0.09%)

  1. Vanguard S&P 500 - VUAG (64%)
  2. Vanguard FTSE Developed Europe EX-UK - VERG (16%)
  3. Vanguard FTSE Emerging Markets - VFEG (10%)
  4. Vanguard FTSE Japan - VJPB (6%)
  5. Vanguard FTSE 100 - VUKG (4%)

Invest £6500 (per annum) in portfolio 2

Portfolio 3

  1. 60% (FOUNDATION/BASE) - S & P 500 Stock SPXP or VUAG
  2. 20% (SAFETY) DIVIDEND SAFETY HIGH YIELD - Vanguard All World High Dividend Yield - VHYL
  3. 20% (RISK)GROWTH - Invesco Nasdaq 100 EQQQ or EQGB

Invest £6500 per annum in portfolio 3

All in all that will be our £20,000 invested for the ISA allowance.

What do you think?

I’m pretty much set on portfolio 1 and portfolio 2.

I just think portfolio 3 could do with some work, with the Safety ETF and the High Growth ETF.

Many thanks.

2

I have very similar to your 1 and 2.
Trying to replicate FTSE All-World index. The cheapest single ETF I know of is Invesco FTSE All-World FWRG with a TER of 0.15%. Yours is 0.954%.
What I’m doing different is I’m using non-vanguard funds with slightly lower fees and using the distributing version so I can rebalance when reinvesting the dividend.
I have my Money Market Fund not in an ISA to use my tax allowance. £7000 over the last 12 months in CSH2 would be £382 and I’m using ERNS. It has a higher fee, 0.07% to 0.05% but I prefer the distributing ETF to keep track of dividends in case I ever go over the allowance.

3

Bear in mind ERNS according to BlackRock is not a mony market fund, presumably it goes for some riskier corporate bonds for higher returns.

4

FWIW I invested in a managed fund for the first couple of years whilst I learned the basics of invest and forget ETF investing.

There are one or two good YouTubers who are very good. The ones I found to be best were all U.K ones.

I ended up with a very much simpler portfolio than yours.

Have you checked out Just ETF?

6

Try to minimise the fees.
I think XNAQ is cheaper than EQQQ. Do check though.
Thanks for sharing.

7

My take on portfolio 3. Transfer of ISA as cash from Nutmeg and lump sum invested as:

Core: LGGG - 30%
Stability: VHVG - 30%
Growth: IITU - 25%
SMGB - 5%
Cash to invest when markets dip CSH2 - 10%

TER 0.17%

Monthly investment of £1666, auto invest, set and forget.

Thoughts please.

8

There is no “best way”. That said, this seems unnecessarily complicated.

Investing so much of your money in a money-market fund every year is extremely risk averse. I’m also not sure why you’re investing twice in the S&P 500.

I would suggest consulting a professional financial advisor.

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9

Hi kevin
Which you tuber are you following… i gollow this guy Damian and abother call chris palmer and pension craft?

10

Morning :wave: :slightly_smiling_face:,
In addition to these 3 I also follow:

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11

After just reading IE’s 2025 review I’m in digestion mode. It’s a good read btw.
That said my gut feeling would be to drip feed into just a global/world ETF, perhaps one that doesn’t have too big a % of EM in it.

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