Rate my portfolio pls

Hi there,
Thanks for accepting me in this community as it is really useful. I wanna introduce myself briefly. I work in NHS and late to the party for investment. But hey, it is better than nothing:)
I’m 45 yrs old now and, keep investing monthly £200 into S&S ISA, £100 into JISA (in HL) and £100 into SIPP monthly.
My plan it to invest around 10 yrs into SIPP and 15 yrs into S&S ISA.
. My risk appetite (just for now😂);

  • for the first 8 years is aggressive, %85 Equities and % 13 bonds and %2 cash
  • 5 years %50 equities and %50 bonds.

I am already in the managed portfolio, but I consider now DIY Portfolio I have two options on my mind, what would you do if you were in my shoes.
Ps: I know no one here is financial advisor, so please feel free to make your own comments without hesitating.
Option 1: copied from Toby’s world

  1. %58 - Vanguard S&P 500 (VUAG)
  2. %20 - Vanguard FTSE Developed Europe Ex‑UK (VERG)
  3. %15 - Vanguard FTSE Emerging Markets (VFEG)
  4. %7 - Vanguard FTSE 100 (VUKG)

Option 2:

  1. iShares MSCI All Country World Index (SSAC) or
    HSBC MSCI World (HMWO)
  2. Invesco S&P 500 (SPXP) or iShares S&P 500
  3. iShares FTSE 100 (CUKX)
  4. iShares MSCI Emerging Markets IMI (EMIM)
  5. iShares NASDAQ 100 (CNX1) or Invesco Nasdaq 100 (EQQQ)
  6. WisdomTree UK Equity Income (WUKD) or iShares UK Dividend (IUKD)

A lot of people start even later than 45, so don’t be too downhearted.

I won’t comment on the balance of your portfolios or suggest alternative ways to invest (like “put more money in emerging markets” or “put money into small-caps” or whatever), but I will look at whether there are alternative funds that achieve the same things.

The obvious thing to start with is that it doesn’t necessarily make sense to separate the Vanguard and non-Vanguard funds this way. Look for whichever offers you best value.

Your Option 2 has a fair amount of duplication. The S&P and the NASDAQ share a lot of the same stocks, especially at the top end, and so if one does badly the other will probably also do badly. Worse still, they overlap hugely with “all world” indexes. Similarly, if you buy both the FTSE 100 and a high-dividend UK ETF, there will be strong correlation between them. Generally, when diversifying you want to try and find instruments that have weak correlations.

I also note that despite saying you want 13% bonds, you don’t seem to be included any - maybe I’m misunderstanding. Also, instead of cash, consider whether a money-market fund might offer slightly better returns for very little increase in risk.

Right, now for the funds:

  • I’ve never looked into “All World” indexes. SSAC is slightly higher-fee but accumulates, whereas HMWO is lower-fee but distributes. If you have autoinvest on then the difference between accumulating and distributing is fairly minimal (though you’ll have to deal with more “bids”), which might lean you towards HMWO.
  • S&P - SPXP beats CSP1 and VUAG.
  • FTSE 100 - CUKX is the best option.
  • Emerging Markets - I don’t quite understand all the complexities here so I just go with low TER, not much to separate the options on 0.18% but I’d go with them over VFEG.
  • NASDAQ - CNX1 is accumulating, EQQQ is distributing. Consider XNAQ which has a lower cost.
  • UK dividend: It’s up to you whether to prioritise yield or low TER (bearing in mind that past performance is no guarantee…), but as said, this will largely duplicate the FTSE 100. At this stage in your investment journey I think you shouldn’t be worried about dividends and should instead focus on growth. It’s also worth noting that the high-dividend companies disproportionately include tobacco and oil companies, which may or may not be a concern for you.

If I were in your shoes I’d probably choose a variation upon the top option because the four instruments are weakly correlated and you’ll probably be less tempted to fiddle with it.

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This looks like a reasonable portfolio to me. It looks like you are trying to achieve a global portfolio with a overweight to emerging markets. If you want to keep things simple you could go with a 2 fund approach with a developed market fund (LGGG is what I use) and an EM fund (EMIM is a possibility as you have suggested). I don’t think there is anything wrong with your portfolio choices but I think you could simplify if you wanted. You could add some small cap exposure if you wanted (WLDS for example) but that is down to your preferences.

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Who is Toby? Is it advice from Tik-Tok ? I could not find Toby.

Anyway, I note that Toby only suggests investing in one asset class, equities, and one provider Vanguard.

Dont know much about the individual ETFs choices, they look like standard picks. They all have billions of assets under management except VFEG, which is alot smaller at only £300million AUM. So EMIM might have better liquidity and pricing.

If you are 100% invested in equities and there is a market correction the whole thing will be correlated and fall together. This may not bother you. It does me, so I hold some gold and bonds in the shape of “MM” funds as insurance against nasty market falls.

Just my tuppence worth…

Thanks very much for detailed response. The reason I couldn’t respond before because I need to digest all these information:) it really helps mate.

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Thank you so much for the information :pray:t2:

Hi mate,
Thanks for response. All options are above from his channel as he is one of the best to explain on the level I can understand:)