I’m looking to invest in a passive tracker fund with dividends reinvested, or a fund that has historically gone up over time, i.e. something that predominantly follows the stock market.
I’ve previously invested in the Vanguard FTSE Global All Cap Index fund (accumulation), however, this isn’t an option on Trading 212 and I think I read there aren’t any index funds.
I invested a small amount of money 10 days ago in a few US stocks in a Trading 212 ISA, so have to invest with Trading 212 as I don’t really fancy waiting weeks to transfer those funds to another broker that does have the FTSE Global All Cap Index fund.
Any advice/opinions on funds that I could invest in and just leave for 5+ years?
as long as the fund in question is liquid and UCITS compliant then it can always be added upon request. that said there are many funds that track with a slight bit more specificity which may be more up your alley.
for example, tracking the index will only ever achieve just under what the index records and so you wont even be matching the market but rather trailing behind. plus the returns are averaged really heavily due to how many companies are involved.
when investing in funds so as to not have to manage an array of stocks, make sure the version of the fund you have is at as low a fee as possible and perhaps focus on an industry you know well and expect to do well for the next 5 years. make sure to keep tabs on it every month or so if you deposit monthly, and check up at least a few times a year.
there will still be variance in the returns because the all-cap fund contains just 6459 stocks to track an index with 8000. perhaps getting a few funds in specific industries or markets with a better coverage will be a more secure choice.
the recent pandemic fears have triggered quite a market crash across the board so you have a wide range of really good affordable options to get started with.
UK and europe are facing issues due to brexit and now coronavirus, china has been extrmeely hammered by the tradewar and the coronavirus outbreak. china is however likely the best market to be in during the post-tradewar, post-coronavirus recovery as their industry has been growing rapidly in the last few years and shows no signs of stopping. so perhaps an etf focused on capturing the majority of the chinese market would be a good idea.
I completely understand what all your points, but I’m not sure I have the knowledge to invest in anything apart from a global tracker, there’s not really an industry or anything that I know well enough to specifically invest in. I realise I could be making better returns by selecting more specific funds, but I think I’d feel a bit more apprehensive doing that due to my lack of knowledge.
I really don’t know much aside from the basics and largely how it all works; I’m just looking to be invested in something that will ‘hopefully’ get me more than 1% standard interest rates per year over the longterm. Plus I think it’d take me a long time to learn more about all the different markets, sectors etc. well enough to be confident with investing in anything else.
The FTSE All-World UCITS ETF (VWRL) and SPDR® MSCI World UCITS ETF look to be exactly the sort of funds I was after though, so thanks for that!
not a problem. I prefer to pick individual stocks over funds, but I don’t feel the need to know everything about an industry to be able to invest in it, you just need to know enough to tell if it makes sense.
for example; food and beverage companies. in my case PepsiCo, for others maybe coca-cola or mcdonalds, dominoes or chipotle mexican grills etc. I know that certain brands are very popular and do really well, I also know that even when times get tough people still want to get their favourite brands over the majority of alternatives, even if the alternatives are cheaper. Pepsi has shown to be resistant to recessions as even when money gets tight, people will turn to their favourite snack or drink to relax with.
I also invest in Unilever despite all the recent bad press and stock behaviour because of their focus on a wide variety of brands of soaps and daily necessities etc. even when times get tough people wont stop bathing and keeping themselves hygienic, it just isn’t an option and so sales for Unilever products are likely to continue no matter what, even if at a reduce rate for a quarter or 2.
I invest in realty Income because they rent real estate to companies rather than families and you don’t see large company storefronts just up and close because of a recession, so Realty Income see a consist lease rate of 98% of their properties. they pay monthly so you can reinvest that portion of money just that little bit sooner than normal.
Perhaps you are rather well versed in your line of work and the industry it is in. so if you know how your work is going and you can look up just a few things related to that you may feel it is safe to invest in a fund that centres around your company and its services.
General news can also be a good indicator of things that are likely to see success in a couple years, such as renewable energy, green science and companies that research and develop better battery technology. perhaps even robotics companies as more factory lines become automated.
On the upside with funds you can see an averaged yearly return much higher than 1%, and really unless you pick awful choices that have no chance of improving, its hard not to get at least 3%. the aim is to beat the rate of inflation on top of making a bit of money so you aren’t losing value over time. if your investments cant match even the rate of inflation, then you are better off just spending the money on courses and things that can help you earn a better salary or improve your lifestyle in the immediate future so as to have more money to invest when you can beat inflation.
Those are all good points and I guess you’re right about only needing to know enough. I’ve got a fair bit of money to invest (for me) and have no history of investing in individual stocks or anything that tracks a certain part of the market, so in my mind it just seems that bit more risky.
Thanks for all the insights though, perhaps I’ll consider investing some smaller amounts in some of those areas. I guess it’s for similar reasons why I’ve seen a lot of people talking about investing in Microsoft recently. They’re pretty much as essential as any other household/business product.
In terms of general news I’ve also seen some of the medical companies have quite a sharp recent increase that are working on treatment for Coronavirus. It depends on what sort of success they have as to whether they’ll drop straight down again though, and I guess that’d be more of a gamble.
indeed, the risk goes up with the more individualistic your choices get.
that said my portfolio have a beta value of about 0.409, which in terms of volatility is extremely stable. I spent the last few weeks in the green by about 6.5% until the coronavirus news dropped the whole market into the red. I now sit with an average of about 5% in the red, which is great for me personally as it means the longer this dip lasts the more opportunities I have to grow my stake.
A lot of funds may have seen similar losses however, which makes this recent occurrence quite uncommon in which stable secure option like an ETF sees the same impact as the riskier individual stock.
Something to consider when picking funds is the specific companies they have as holdings. you will see slight differences in different funds that aim to track the same index and often they may contain a certain company you have a personal dislike for and don’t want to be associated with. if it goes against your moral/ethical code, knowing the various options can allow you to pick a fund that doesn’t hold that company, or perhaps at least holds less of it.
failing that, using fractionals to make your own ETF in your portfolio is always an option, just copy the holdings of a certain ETF on a % basis and exclude the company you don’t want to invest in (this assumes all stocks in the ETF are available on T212 when you do this) if you feel certain companies are not likely to do well, exclude them too and while they will not track as well, you may see returns that beat the market or still trail behind in off seasons.
Thanks, I’ll keep it in mind for the future. For now I think I’m probably safest longterm (personally) putting most of my money into the VWRL fund you mentioned.
I am considering putting some smaller amounts in some other stocks though!