Category: Investing

02- Aug2020
Posted By: abundanceaware
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Best Vanguard Funds UK

One of the most common questions people have asked me is what are the best Vanguard Funds available in the UK?

It is not a surprise to me that people ask me this question because choosing the right funds when you want to get started with Vanguard can be overwhelming and confusing.

Vanguard is not the best when it comes to the number of funds available to choose from. However, this is an advantage from my own point of view. This is because it is not that complicated to choose a fund on the Vanguard platform in the UK when compared to a lot of other investment platforms in the UK.

I must say at this point that I am not a financial adviser and please do not take this information in this post as financial advice. Please also do your own research after reading this post.

Base on my experience of investing with Vanguard in the UK, below are my top 3 funds. I will also give you the reasons why these are my top 4.

After reading this article, you might find this article useful. 

U.S. Equity Index Fund – Accumulation

This is one of the passive funds Vanguard offers to UK investors. It is very similar to the Vanguard Total Stock Market Index Fund in the US. The Fund is a passive fund.

Investing in this fund means that I am in full trust of the historical performance of the Standard and Poor’s Total Market Index in the US.

The fund invests in large, mid, small and micro-sized company shares in the US.

Investing in stock and share generally means that you support the advancement and innovations of the US economy. It is a way of owning part of the US economy.

The fee for this fund is really very low and it is one of the reasons why I love this fund.

You can see more information about this fund on the Vanguard UK website.

S&P 500 UCITS ETF (VUSA)

This fund is an Exchange Traded Fund (ETF) and is available for UK investors on the Vanguard UK platform.

It is a fund that tracks the S&P 500 which is a US index. The S&P 500 from its name contain 500 of the biggest companies in the US.

Investing in this simply means that I trust these 500 companies to continue to innovate and provide valuable products and services into the market place.

As well, this also means putting your trust in the US economy which is still the best economy in the world as at the time of writing this post.

You can see more information about this fund on the Vanguard UK website.

LifeStrategy® 80% Equity Fund – Accumulation

This fund is usually regarded as a fund of funds because it holds various funds in it. The Vanguard LifeStrategy is one of my most favourites of Vanguard Funds available in the UK.

The portfolio comprises of approximately 80% shares and 20% bonds and other similar fixed-income investments.

The 80% equity means that shares make up 80% of the fund and the rest 20% bond.

The state of life or age of the investor is usually the determinant factor in which of the LifeStrategy funds to choose. Vanguard has other LifeStrategy funds as follows

  • 20% Equity
  • 40% Equity
  • 60% Equity
  • 100% Equity

The percent (%) equity always signifies the percentage of the funds that are shares.

For an investor who is close to retirement or has retired, it might be better off to invest in 20% equity. This will mean that 80% of the fund is bond.

Bonds are more regarded as less risky than shares.

Personally, because of my stage in life, I invested in the LifeStrategy 80% Equity.

You can see more information about this fund on the Vanguard UK website.

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FTSE All-World High Dividend Yield UCITS ETF (VHYL)

The main reason why I like this fund is that it is a global fund.

The world generally is moving forward in the right direction of innovation, technology and advancement. Investing in this fund is putting your trust in the future growth of the human race.

According to Vanguard as stated on their website, “this fund invests in large and mid-sized company stocks – real estate trusts not inclusive- in developed and emerging markets that pay dividends generally higher than the average.”

The unique benefit of investing in this stock is the fact that it is a dividend fund. The fund invests in stocks of companies that pay dividends that are usually above the average.

You can see more information about this fund on the Vanguard UK website.

Final Thought

It is very easy to get overwhelmed when choosing funds to invest in on the Vanguard platform when you are a beginner. It is important to keep things simple by choosing passive funds which track the major stock market indices.

My favourite Vanguard Funds mainly track indices that are outside the UK. This does not mean that FTSE funds are not as good as starter funds.

Some of the FTSE funds are also very good funds you can choose from. You can check out FTSE and other funds on the Vanguard website by clicking here.

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7 Smartest Ways to Invest or Spend £1000

If you have some money and have no idea what to do with it, this article gives you some ideas on how you can either invest or spend £1000 or $1000.

The first thing I will do is to remove 10% of the $1000, which is £100. The reason for this is because of my generosity mind-set. I believe whatever I have is not only for me but for everyone.

There are always going to be people who cannot help themselves because of reasons beyond their control. So I will give the £100 to church to administer it or I can just give it to one of the charities I support.

After deducting 10% to give as a charity. I’m now left with £900.

 

7 Smartest Ways to Invest or Spend £1000

Here are some of the ways to spend the remaining £900 (in my case). Perhaps this will give you some ideas on how to invest your money wisely or how to spend your money.

1. Index fund investing

When it comes to investing I usually do it for the long run and I don’t like individual stocks because it’s too risky for me. Especially if you are a beginner in the world of investing in the stock and shares.

It makes sense for you to start with the safe way of index funds as this will help you to invest in a low-risk way while you are learning.

You might consider investing in the Vanguard platform. Vanguard has a lot of funds that are performing well. And as a beginner, you might consider one of Vanguard’s Life-Strategy Fund.

Vanguard is one of the most trusted investment platforms because of its history and good reputation. Vanguard’s platform is user friendly and to crown it all, they have one of the lowest fees in the market.

2. High yield savings account

Traditional savings accounts no longer pay good interest for savers. Many savers are frustrated because of the lowest interest banks pay for savers.

If you shop around you might still be able to find some savings accounts that pay good interest on savings account. These are accounts that have up to 5% interest.

The best way to find such deals is to try websites like Which? for up to date information regarding accounts that can pay good interest on your savings.

3. Invest in yourself

Personal development is something that I take seriously. I usually do not depend on my employer alone for education that relates to my career.

Every year I set aside money that I use for my self educations. Over the years I have acquired certifications like PRINCE2, ITIL, SAS and some other ones. The funding for all these came from my personal money and not from any of my present or previous employers.

As an entrepreneur, I have also spent money on training programs that helped me in my business. This is because I believe improving your skills is very important.

I am conscious of the importance of learning new skills and like to get my brain working in the right direction. I like adding to my skills set.

The £900 could be useful for learning something new as part of my personal development.

4. Pay off your mortgage early

If you have a mortgage, you can use it as over-payment on your home loan. If you are like me who will like to pay a mortgage early.

You might consider this money as over-payment on your mortgage. A 25years mortgage doesn’t have to be paid over 25years. You can decide to pay it off early if it’s allowed in your terms and conditions.

Don’t get me wrong, this money might be too small but surely it can be part of your over-payment and it will be helping a bit to reduce your home loan.

5. Pay off Consumer debt

If you are paying interests on consumer debt you are making the bank or lender rich and you are getting poorer. If you have a credit card or loan you can use this money to pay all or part of it back.

6. Start a business

If you already have a business idea, you can use the money to implement it.

For example, if you were thinking about an online-based business that will require a website set up. You could use part of the money for buying a domain, hosting and set up the website.

It’s important though to make sure you’ve done proper research and also approach with due diligence.

Or perhaps you already have a business like me. I can use the money to buy stocks that I can resell on Amazon or eBay for profit.

7. Enjoy life

Life is not just all about investment and savings. You also need to enjoy life. In fact, I like to spend my money on new experiences.

The time you spend with your family and loved ones will also be in your memories. Experiences have a huge impact on happiness. If you are not struggling financially, you could treat yourself to a nice holiday to relax.

Look for a nice place where the whole of your household will enjoy good family time. Changing the environment can also unlock your creativity.

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