How I invest my money

One of the most common questions I’m asked is: How do you invest your money? It’s a difficult question to answer because it can be interpreted so broadly. Are we talking about how do I physically go about investing? Or, what asset allocations do I use? What strategic allocations do I use (UK equities vs US equities etc.)? Or what funds do I actually invest in?

Today, I’m going for the narrowest definition. I’m going to write about every fund I invest in. Along the way, I’ll show my asset allocations and such forth. But the focus, at least for today, will be on the specific funds I invest in and why.

Let’s start with my asset allocations

Asset allocation

invest UK asset allocation

Overall, my target asset allocation is 90% invested in Equities and 10% in Bonds. I aim to hold 10% cash outside my investment portfolio.

Let’s start with what’s missing – commodities and property. There are strong arguments for holding these assets in an investment portfolio. I’ll avoid rehashing the arguments for and against. I don’t invest in commodities for three principal reasons:

  1. the thematic aim of my portfolio is towards investment growth – the evidence on commodities is mixed over the long-term for growth-based investment strategies
  2. the strongest argument for commodities is protection against inflation – again the evidence is mixed
  3. UK equities, particularly the FTSE100, are heavily tilted towards commodities-sensitive companies (think BP, Shell, Rio Tinto, Anglo American), investing in commodities as well could cause over-sensitivity to commodity prices

That said, there are diversification and crisis-protection benefits for having commodities in your investment portfolio.

Similar arguments can be levied against property allocations. In addition to the investment portfolio, I own a home with Mrs YFG which means we already have a significant amount of money invested in property outside my investment portfolio.

The 90/10 equity/bond split reflects my very long investment time-horizon and my relatively high-risk tolerance. Currently, I have no intention of encashing any of my investments. As such my holding period is relatively long. There is good evidence that on a risk-adjusted basis a more even split between bonds and equities is superior (in risk-adjusted returns). But, for now, I can comfortably stomach the volatility in my portfolio.

Strategic allocation

uk investment allocations

Overall, I’m almost 50% invested in Global Equities (more on what that specifically entails in a bit). I’m a firm believer in the global passive investment strategy that Lars Kroijer (and others) advocates. That said, you can see a strong tilt towards UK Equities. That’s because, whilst I think a global passive strategy is suitable for most people, we must not forget why we invest: to protect our future selves against inflation. To that end, I consider a tilt towards home markets advisable as they offer greater levels of specific protection against your personal inflation than a global portfolio can.

However, finding the right ’tilt’ is difficult. Whilst I could try and pretend that I’ve come up with some really smart mathematical model, I’ve gone for a rough rule-of-thumb of allocating 15-20% extra to UK equities than a Global Equities tracker. This means I’m roughly 30% invested in UK Equities. I’m very much open to any suggestions or tips if you have them!


uk investment funds

[Note: I’ve set out the funds by their ‘ticker’, ‘SL Global’ is an amalgamation of various Standard Life pension funds invested in global equities]

Now before I go any further, a disclaimer: none of this post should be construed as a recommendation to invest in a particular investment or fund. This post is for information purposes only. Please do your own research, and speak to an FCA authorised investment adviser if necessary. I won’t take any liability for any decisions you make off the back of this post.

ETFs vs Mutual Funds

With that out of the way, let’s dive in. Overall, I’m heavily invested in ETFs over mutual funds. It’s my opinion that ETFs are a superior investment product to mutual funds for three main reasons:

  1. They are marked-to-market – there’s no discount or premium on trading, unlike closed-ended funds.
  2. They can be traded throughout the day – open-ended funds can only be settled at close.
  3. They generally have lower costs to hold, the ETF structure makes it cheaper to operate than an open-ended fund and platforms generally charge no holding fee for ETFs compared to mutual funds.

There are some downsides, however:

  1. There are bid-offer spreads – which can be substantial for smaller ETFs (i.e. smaller Assets Under Management, AUM).
  2. Some ETFs are “synthetic”, they don’t hold the specific securities they are tracking – opening the ETF up to counterparty risk.
  3. There is an active discussion on the liquidity of ETFs, with some prominent individuals arguing there is a major liquidity risk with ETFs (I think this argument is somewhat overblown, perhaps I can write about it another day).

Passive vs Active

You’ll also notice that I’m pretty much 100% invested in passive funds (I do hold a small active holding, more on that in a bit). The evidence is pretty overwhelming that active fund managers underperform their passive counterparts. Over the years, I have personally conducted analysis on the UK and South American investment markets. The evidence was that few investment managers outperform the market. Finding those managers is difficult, takes a lot of time and isn’t something I find interesting – so I stick to passive funds.

A long time ago, I used to invest in individual stocks. And with reasonable success to boot. I think it is entirely possible ‘to beat the market’. But it involves a significant amount of time to do the research required. I think it is also hard to beat the market unless you focus on a specialism – UK small cap, Euro special situations, UK dividend stocks. That means the ‘active component’ would only represent a small part of my diversified portfolio. With those two things in mind, it’s very much in my ‘too hard’ bucket.

Fund managers

For the eagle-eyed, you may also notice is that I’m heavily invested with Vanguard. Here are the breakdowns by manager:

  • Vanguard – 69%
  • Standard Life – 16%
  • HSBC – 8%
  • iShares – 6%
  • Aberforth – 1%

I won’t hide it: I’m a big fan of Vanguard. I like their ethos: that fees are the most important determinant of investment performance and low fees mean superior performance. I also like their corporate structure (it’s set up as a mutual). There are also few alternatives to my largest single investment: VWRL, Vanguard FTSE-All World. I’m trying to reduce my dependence and diversify across more managers, but for now, it’s a slow process.

On to the specific investments. Details of each investment are (hopefully!) accurate at the time of writing: 20th June 2018, portfolio weights are in brackets.

VWRL (26%)

a/k/a FTSE All-World UCITS ETF. With an ongoing charge factor (OCF) of 0.25%, it is the cheapest “true” all-world ETF tracker. It tracks the FTSE-All World index, which includes emerging markets. It’s invested in over 3,000 securities, offering instant equity diversification. It’s also got a long track record, going back to 2012. With a global passive strategy, this ETF is the bedrock of my portfolio. I’ve been looking for some alternatives, with limited success. Until one of Vanguard’s competitors gets their finger out, it’s the one to beat. Unfortunately, it’s 15 basis points more expensive than the US ETF equivalent which is quite disappointing!

Standard Life Global trackers (15%)

These are a mix of a number of funds across our mine and Mrs YFG’s occupational pensions. The OCFs are between 0.1% and 0.25% which make them, fee-wise, competitive with VWRL. To that end, they are staying put for as long as the fees stay reasonable.

VGOV (9%)

a/k/a U.K. Gilt UCITS ETF. This is the ETF I use for investing in bonds and my sole bond fund. It’s a mixed-duration UK Gilt ETF. There’s a valid argument I should invest in corporate bonds, but the evidence on their efficacy is mixed at best – so I personally steer clear.

The argument is less borne out about investing in global government bonds. I’m principally concerned about UK inflation: so UK Gilts are much preferred over international bonds.

There are lots of UK Gilts in issue – currently 44 straight bonds (not including strips, there are also 28 index-linked Gilts in issue). The UK gilt market is also deep and liquid with strong market-processes in place to ensure orderly trading. For those reasons, I think the liquidity and suitability of a UK Government Bond ETF are fine. VGOV holds 43 securities and has an OCF of 0.12%. It used to be the cheapest UK Gilt ETF although it’s recently lost that title to Lxyor.

The index-linked market is more challenging, there are few ‘shorter’ issues (VGOV’s average duration is c.12 years vs INXG’s (iShares index-linked tracker) c.22 years), which means index-linked gilts are particularly volatile (the longer the time to maturity, the more volatile a bond’s return is to interest rates). For now, it’s straight UK Gilts only for me.

VMID (8%) and VUKE (3%)

VMID a/k/a FTSE 250 UCITS ETF. This my largest UK Equity holding. VMID holds the ‘mid-cap’ stocks of the FTSE 250. At an OCF of 0.10% it is the cheapest FTSE 250 tracker out there (by some distance).

VUKE a/k/a FTSE 100 UCITS ETF. VUKE holds the stocks of the FTSE 100. It has an OCF of 0.09%, a bit more than the cheapest ETFs at 0.07%.

The reason I invest in the FTSE 250 over the FTSE 100 or All-Share is that the UK Equity market is heavily dominated by global companies which have global earnings – not necessarily great for protecting against UK inflation. As an aside, this is why the FTSE 100 surged post-brexit: sterling depreciated in value, so those foreign currency earnings became much more valuable in pounds, what the shares are priced in. The FTSE 100 is also heavily concentrated in a few sectors: (oil and gas: 17%, banks: 13%; tech makes up less than 1%) – (for more on this, have a look at a recent guest post on the subject over at The FIRE Starter).

Another reason is to capture some of the ‘size premium’ – the idea that smaller stocks outperform larger ones over the long-term. However, I’ll confess that, over time, I’ve seen more evidence to suggest the size premium is much weaker (if it exists at all) than first thought. As such, I’m no longer ‘actively’ investing for a size premium.

All-share tracker ETFs are, generally speaking, more expensive (0.2% OCF). Apparently, there’s a new Lxyor ETF on the block (with an OCF of 0.04%!) but has no track record – so we will have to see how it goes.

HMWO (8%)

a/k/a HSBC MSCI World UCITS ETF. This is the cheapest MSCI World tracker at 0.15% (except for, you’ve guessed it, a new Lxyor ETF). This fund has been going for quite a while, since 2010.

It’s a recent addition to my portfolio as I’ve tried to wean myself away from VWRL. As it tracks the MSCI World index, it doesn’t include an allocation to emerging markets – this is a Developed World tracker. The allocations between Developed World and Emerging market are also different between MSCI and FTSE. The most notable difference between the two being MSCI thinks South Korea is developing, FTSE thinks it’s developed.

Unfortunately, the only MSCI ACWI (All Country World Index) ETFs are quite expensive (0.4%+ OCF) which, for me, means they are prohibitively expensive. For now, I’ll be using VWRL and HMWO + EMIM (see below).

VUSA (8%)

a/k/a S&P 500 UCITS ETF. With an OCF of 0.07% this is one of the cheapest S&P500 trackers out there. This is in some ways, a legacy fund from the days before I started putting my investments into VWRL. Back then, I was replicating a global portfolio with a number of different funds in relevant proportions. I’ve now sold away most of my VUSA holdings, but this represents some of the holdings that still sit outside of my ISA with a big capital gain attached (see my post about what I do each new tax year) as well as the residual (“non-VWRL” allocation).

VFEM (6%)

a/k/a FTSE Emerging Markets UCITS ETF. This is the ‘cheapest’ FTSE Emerging markets tracker at 0.25%. It’s more expensive than the MSCI equivalents (see EMIM below), but it follows the FTSE methodology on Emerging Markets.

I tilt towards Emerging Markets. Firstly, because they offer higher growth opportunities than Developed Markets (along with the associated higher risk). Secondly, as a proxy for the inability to invest in ‘Frontier Markets’. Those are the countries with small stock exchanges which are, for now, not really accessible to retail investors. By adding a tilt to Emerging Markets, I’m trying to slightly undo the underweighting those markets get from their exclusion in global indices.

As with my UK tilt above, there isn’t much maths to this, the aim is to hold an extra 5% to my portfolio.

Vanguard All-Share (5%)

a/k/a FTSE U.K. All Share Index Unit Trust. This is the only mutual fund in our portfolio (outside of our occupational pensions). It’s one of the cheapest All-share funds with an OCF of 0.08%. It’s held by Mrs YFG with iweb, which doesn’t charge holding fees for funds. So, for now, we are leaving it rather than swapping it out for ETF equivalents.

DJSC (5%)

a/k/a iShares EURO STOXX Small UCITS ETF. This is an unusual fund, probably the most exotic in the portfolio. It tracks the EURO STOXX Small index, which is the smallest subset of stocks in the EURO STOXX index. Now by “small”, we are really talking about mid-cap type stocks such as Dassault Aviation, Christian Dior, Post Italiane, Pirelli. The idea behind this fund is to pair it with the Developed Europe Vanguard ETF (VEUR) to capture some ‘size premium’.

This ETF is also unusual because it differs from most of my other holdings: it’s expensive (OCF of 0.4%); it’s not particularly well diversified (it holds only 96 stocks); and it uses an ‘optimised’ physical replication strategy (i.e. it doesn’t hold every stock in the index at their market weights). So why do I continue to hold it? Well, as with VUSA, it sits outside my ISA with a nice big capital gain. Over time I’ll defuse the gains and slowly replace this fund in my ISA.

On a tangential note, because of the types of companies in the index, the sector weighting is quite well placed towards consumer inflation (industrials, consumer goods, tech) which does make it interesting from that perspective.

VEUR (4%)

a/k/a FTSE Developed Europe UCITS ETF. One of the cheapest broad Euro trackers with an OCF of 0.12%. Another Vanguard ETF, this also includes an allocation towards UK stocks (as it’s not an xUK fund).

SL UK trackers (1%)

These are Standard Life index funds that track UK markets. Again the OCFs are between 0.1% and 0.25%. As they make up such a small part of my portfolio I can’t be bothered to play around with them. So, for now, they sit there chalking up returns.

EMIM (1%)

a/k/a iShares Core MSCI EM IMI UCITS ETF. As mentioned this a relatively new ETF for me, which I pair with HMWO. This ETF tracks the MSCI Emerging Markets Investable Market Index. What this means is that it is basically is a vehicle for investing in China, South Korea and Taiwan which dominate that index (29%, 15% and 12% respectively). It’s the cheapest emerging market ETF with an OCF of 0.18%. Very much a “let’s see how this plays out” investment.

ASL (1%)

The final and smallest holding is arguably the most interesting. It’s the Aberforth Smaller Companies Investment Trust. This is an actively managed(!) UK IT which invests in UK small caps. Every single other investment I have is passive, so why this sole active fund? Basically, because there are pretty much no UK passive small-cap trackers in the UK. I had looked around quite a bit, and good ol’ Mr Investor at Monevator had a feature on the fund. I liked what I read and I had a deeper look.

There are a few other small-cap funds. Of note is the Dimensional smaller companies fund. Unfortunately, you can only invest through an adviser and it’s really a pseudo-mid-cap fund, like quite a few others. Aberforth, invests in genuinely small-caps, with a value (rather than growth) tilt. Another distinguishing feature is that it has a relatively low OCF at 0.76% compared to its competitors (for example, Liontrust UK Smaller Companies has an OCF of 1.61%).

There are two final features which also set it apart from the other options. Firstly, the management house is focussed on small UK companies. From my experience, the more successful actively managed funds tend to be where the manager has a niche or specific investment philosophy compared to generalists. Secondly, the management team have been in place for almost 30 years, giving it a long track record. Now whilst there is an element of survivorship bias, the best funds tend to stick with their managers over the long-haul even when there is a period of underperformance (as with Aberforth).

As I’ve become more sceptical of the size-factor, I don’t think I’ll be adding to this holding. Although it’s nice to keep it as an experiment to see how it does. And with that, I’ve written about the most words about my smallest, most dormant holding…


Lots of words on picking funds and asset allocation, let’s get down to business – has it worked?

I’d argue that the answer is yes:

[Note: After posting, I’ve noticed there’s an issue with mutual fund data coming from google finance that was messing up my google sheet document. It means the chart and the return figures were slightly off. I ‘fixed it’ for now with hardcoded data.  I think I’ve also been able to reproduce the benchmark returns using data from Vanguard. Please do let me know if you’ve come across this issue before!]

Since I started systematically recording my investment returns (August 2013), £10,000 in my portfolio has turned into c.£19,000 c.18,000. With a 14% 13% money-weighted (IRR) return and a 12% 11% time-weighted return. For comparison, I benchmark against the Vanguard 80/20 LifeStrategy fund which has a 9.8% return (or the 100% fund with a return of 11.3%). Reassuringly, my portfolio and the LifeStrategy fund has a Rsqr of 0.98 (so I’m going well off base). On the other hand, I could just invest in the LifeStrategy fund and have a much quieter life…

All the best,

Young FI Guy

Great resources/hat-tips

I’m incredibly thankful for the following websites/individual’s who have helped me out a great deal on my investment journey. They are, if you aren’t familiar with them already, excellent resources for the UK investor:


  1. Thanks for sharing your portfolio allocation YFG and a very thoughtful presentation. It has certainly done the business over the past 5 yrs…14% average each year is excellent and also an interesting comparison with the Lifestrategy options.

    As I read through, I was wondering if you have a set allocation for each area and whether it has drifted much over the years and what steps, if any you employ towards rebalancing? The auto rebalance of the Lifestrategy is a feature I really like as I do not need to think about this.

    Finally, many thanks for your mention at the end…much appreciated!

    1. You’re more than welcome DIY Investor. Starting from the end backwards, I really like the LifeStrategy funds. I think they are a good idea, especially for newer investors and are usually the thing I float first when speaking to people who ask how to ‘get into investing’. The rebalancing feature is particularly appealing because I do find rebalancing painful. Being frank, I probably break all the rules in the book on rebalancing and asset allocation. So I’d say (to those reading) probably don’t follow my lead!

      The ‘target’ asset allocation is 90/10 equities/bonds. And roughly 60/20/10/5/5 Global (VWRL)/UK Equity/UK Bonds/Emerging Markets/Euro Equities. Right now, I have very rough allocations which are evolving over time as I try to get closer to the target. I rebalance twice each year, once in April and once in the autumn. The idea is to move away from the old set-up of my portfolio (with the 10+ funds) towards a five fund portfolio (i.e. VWRL, VMID, VGOV, VFEM, VEUR). The issue I have is the substantial capital gains I sit on.

      So what I am trying to do is defuse capital gains whilst drifting towards my end goal. So for example, this new tax year I sold out some of VUSA in my trading account, buying VWRL in my ISA. This meant I could remove some capital gains and make a step towards the target allocation. I also sold down the equivalent UK and Euro equities in my SIPP and moved them into the HMWO/EMIM combo. Mrs YFG’s portfolio looks a lot closer to the target as all her investments are tax-wrappered. She has 4 of the target funds (VWRL, VMID, VGOV, VFEM) minus the Euro holding. That’s because overall I balance her being overweight in the UK with me being overweight in the Euro holding.

      In the autumn I’ll rebalance within the ISA and SIPP. I rebalance using (roughly) the Swedroe rule but at 5%/25%. It means I rebalance infrequently and it seems to work for me. Right now, it’s telling me to rebalance from UK to Emerging Markets (which isn’t much of a surprise given market movements since April.

      1. Hi YFG, thanks for the super helpful info.

        You say you’re intending to move towards a simpler 5 fund portfolio (VWRL, VMID, VGOV, VFEM, VEUR), but you’ve also recently bought more of your HMWO/EMIM combo. As far as I can tell, the HMWO/EMIM combo is essentially an MSCI equivalent to the FTSE based VWRL, but with the benefit of lower OCF. If that’s the case, it seems there’s no point in having both HMWO/EMIM _and_ VWRL. With the lower OCF the HMWO/EMIM combo is the better option. Would you agree with that or is there something about the FTSE All-World Index that means you still want both?

        (Sorry for the acronym-laden question!)

        1. Hi Marcus, great question. You’re right that the HMWO/EMIM combo is essentially the MSCI equivalent to the FTSE VWRL.

          The reason I’ve started buying the combo is to diverse away from Vanguard a bit and it is the cheapest option to do so. I’m diversifying away from Vanguard as, whilst I think it’s very unlikely for Vanguard to go bust, having all your investments with one asset manager leaves you up the creek if they did go bust. It’s for similar reasons that I hold my assets across several brokers.

          With all that in mind I will likely keep buying HMWO/EMIM in the future as the alternative to VWRL.

          1. Right, so it’s a diversification strategy. Gotcha.

            ‘Nother question: what’s your reasoning for including Euro-centric funds (VEUR, DJSC) in your portfolio? The UK funds make sense as you explain above – a home market tilt protects against home market inflation. But the Euro funds…? Do you particularly favour European growth, or are they there to counter-balance the US heavy weighting of the global funds (which is over 50% according to this article

          2. Another great question! It’s partly for the reason you state, to offset some of the overweight to the US (this is also one of the reasons I also tilt towards emerging markets). A second reason is because of the UK trade relationship with EU, particularly for goods, which affects our inflation. Finally, Mrs YFG and I are open to emigrating to Europe in the future (once we are fully retired). In that sense, I’m doing a little bit of hedging. I’ve definitely been influenced by the excellent Retirement Investing Today who is playing on emigrating to somewhere in the Med.

  2. Thanks for going into detail with your investments – it looks like you’ve done very well from your portfolio.

    My VWRL is at 22% and like you, I also hold VUKE, VMID, VFEM and VGOV. You think your 90/10 equity/bond split is high risk? Mine’s currently closer to 95/5 and my investing horizon isn’t half as long as yours! If I include cash as part of my portfolio, then it becomes equity/bond/cash = 88/3/9. I’ve been so busy these past couple of years chucking my money at equity that I’ve forgotten abot my bonds – my planned equity should be around 75-80%. Although the majority of my investments are passive (ETFs), I have a growing number of active investments, which include ASL, and these are predominantly for income.

    I’m thinking of opening a Vanguard account for my next ISA, to take advantage of cheaper fees but also to split my investments across different providers.

    1. Thanks Weenie. I always try to avoid using terms such as ‘high risk’ because I think they can be misleading. In terms of capital risk a 90/10 portfolio is ‘higher risk’ but if we’re talking about inflation risk, the converse is true. Roughly speaking, if you have a long time horizon and a high ‘risk tolerance’ capital risk becomes less of an issue for you.

      Interesting to note that you are creating an income investment approach. As I mentioned in my post, my investment portfolio is geared towards growth, but one day I’ll likely be moving (at least part of the way) towards an income focus. In that respect, DIY Investor and RIT (with his High Yield Portfolio) are great resources.

  3. p.s. something that came to my attention in writing this post is that my google sheets investment tracker has started playing up. Specifically, I use the google finance function within google sheets to grab prices from the internet. It appears that mutual fund prices have stopped working/gone a bit funny. It meant that the portfolio returns were off slightly (as the mutual fund data had messed up), I’ve ‘fixed’ those for now and edited the figures in the post. It also means I’ve ‘lost’ the benchmarking figures as well. I’ve not seen this issue before, so if anybody reading knows about it/there is a fix do let me know!

    All the best,

  4. Enjoyed reading your write up YFG, looks like you’ve taken quite a sensible approach to your portfolio.I’ve also never come across any firm research on asset allocation with regard to domestic vs. international exposure for non-US investors. It seems all the reports that get done are with an American investor in mind. But as best I can tell, Vanguard allocate around 30% to domestic stocks in many of their developed world high growth ETF’s and funds which supports your idea. I also aim for the same for my Aussie portfolio. A small part of me thinks that Vanguard might have been a little lazy and just reached for the US method. If you ever come across anything concrete I’d be interested to know (and will gladly circle back if I find some hard data on it too!).


    PS. Solid returns since 2013! Well done 🙂

    1. Hi wealthfromthirty, thank you for commenting. I think that there is quite a bit of research on home bias from an academic perspective. Unfortunately, there is little from a ‘real-world’ perspective. In fact, the only bits I can positively remember are from Vanguard. Whilst in principle the idea of investing in the global securities portfolio is enticing it does have a few blind spots. Most prominently, inflation and currency risks. Those seem most prominent for UK, Canadian and Australian investors (out of developed markets) due to our respective high concentration of commodities, financial services and property in our economies. Unfortunately, it feels like a lot of research starts from “home bias is bad” rather than the ‘correct way’ which is: “if I’m an investor, what’s the best way to protect myself from inflation?”

      Some links from googling:
      Vanguard 1:
      Vanguard 2:

      1. Just to add, Retirement Investing Today (RIT) has written quite a lot about currency risks on his blog. He’s in the position of moving from the UK to a yet to be finalised EU destination. That means currency risk has played a big part in his plans – particularly post brexit.

  5. Hey YFG,

    Thanks for taking the time to detail this, very insightful. Seeing as you’re a disciple of Lars (as am I), have you considered simplifying your portfolio and just investing in the Vanguard FTSE Global All Cap fund? The fund invests according to global market cap weighting, which is central to Lars’ advice. You’ve stated a need to be overweight UK so you could always invest in a UK fund as well.

    I’ve spent the last year or so simplifying my portfolio. I’m now in a position where all of my net worth, my wife’s net worth and my kids’ net worth is 100% invested in the FTSE Global All Cap.

    All the best,


    1. Hi Slim, thanks for taking the time to comment. I favour ETFs which is why I’m invested in VWRL rather than the Vanguard Global fund. As I understand, the Vanguard fund used to track the FTSE All-world but moved over to the FTSE Global All Cap. The FTSE All-World is a very old index (I can’t remember how old, but I’m thinking it was 70s or 80s). The Global All Cap is a newer index which I think FTSE brought in due to Vanguard (fund manager lobbying). The main difference between the two is that the All Cap has a lot more securities (mainly mid-caps). That makes it more useful for breaking down into large-cap, mid-cap and small-cap sub-indices. I think (again running off of a dodgy memory) the returns between the two are very similar (/the same).

      I’m really hoping that asset managers start a price war on a global ETF trackers like they have done on UK and US trackers. But for now, there is a paucity of global ETFs.

      As I mentioned in my reply to DIY Investor, I’m gradually moving towards investing primarily in global trackers.

  6. That is kinda freaky YoungFI – my portfolio is really not that far off yours at all. I’m a bit more cowboy at 95% stocks / 5% bonds….(but I do also have some cash outside). I’m loving EMIM for the China exposure to massive companies such a Tencent and Alibaba and also have DJSC.

      1. Yeah my portfolio is eerily similar…but I have a shed load more cash and bonds (being middle aged and cautious)

  7. Thanks for this post YFG – always interesting to have a nosey into someone elses metaphorical investment drawer :o)

    This just reminds me what a funny thing investing is….. I, like you, totally get Lars advice on VWRL and his point of ‘why would you invest in anything else?’. I have no CGT issues so in theory I could sell everything I have and throw it all in there…. but I can’t quite bring myself to be 100% invested in it. I too hold things like VFEM, VAE, VTS, a developed Europe xUK fund, a global small caps ETF etc….

    Some of this is about my own personal situation (investments and my life split between four countries / currencies) but I think its basically the new generation of what we used to do with single stock investing and the thrill of speculation. Somehow I am looking for ‘edge’ in believing that I know something that the market doesn’t about the fact that EM / Europe / Small Caps will give me better growth…. spoiler…I don’t think I do!

    So even though I know this… I still do it. Kind of freaky that these deep-seated behavioral biases can make you do things that probably disadvantage you even when you know they do!

    1. Thanks financialdragon. The urge to tinker and play the active game is strong. For me, being lazy is a bit of a blessing. I sometimes think about stock-picking, but my laziness prevents me from getting started. I imagine if I was more into investing I would be doing very similar things to the Investor over at Monevator.

  8. Typo: “The evidence is pretty overwhelming that active fund managers underperform their active counterparts.”

    I think you meant *passive* counterparts.

  9. Thank you for your post hun, Just starting out I keep worrying that I may do something wrong or pick the wrong funds and this has been really helpful to me. So ta.

    1. Haha thanks SmlSave. If I have any advice, for aspiring investors out there it is to just start. It is scary when you invest. But if you dip your toes in and read the right stuff (Monevator) then you’ll get well on your way.

  10. Interesting post.

    I have also chosen to bias the UK (home country) but not by so much .
    Also keeping it simpler with less funds.
    Until recently I had too many stock and index traclers, nearing early retirement I needed to consolidate.

    HMWO 40%
    VHYL 30%
    ISF 10%
    EMIM 8%
    VGOV 12%

    good luck


    1. Thanks Gary. Part of the reason for sharing was to kind of show that my portfolio is a bit of a mess! I’m supposed to know better! It’s one of the many things in life where it sounds easy in theory, more difficult in practice. Good luck with your investments too.

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