Using a core range of Vanguard funds, it’s possible to achieve a huge amount of diversification for your investments. You can invest at a risk-reward level that’s appropriate for your needs by adjusting the proportion of your money invested in company shares and bonds.
Using Vanguard funds, Moneycube can provide ready-made portfolios to help our customers put together a balanced mix of index funds.
We’ve set out below some typical portfolios using Vanguard funds below.
|Portfolio||60% equity||80% equity||98% equity|
|Vanguard U.S. 500 stock index fund||34%||47%||58%|
|Vanguard European stock index fund||13%||17%||21%|
|Vanguard Japan stock index fund||5%||6%||8%|
|Vanguard Emerging markets stock index fund||8%||10%||11%|
|Vanguard Global bond index fund||27%||13%||0%|
|Vanguard Global short-term bond index fund||11%||5%||0%|
|Total bonds and cash||40%||20%||2%|
Index funds make a simple promise: to follow the performance of the markets. Nothing more.
So it’s no surprise that the ready-made portfolios have done pretty much what the markets have done over the last few years.
On a three-year view, the annualised return ranges from 7.1% to 11.6%, as the chart below shows.
Notes: Back-tested data to 31 October 2019. Returns are net of fund management fee (OCF), but do not include Moneycube/ platform fees (0.9% per year)
Who are ready-made portfolios for?
Ready-made portfolios of index funds might suit you if:
- You want ongoing advice on your investments
- You want to put your money to work in low-cost investments with a global outlook
- Don’t have time to monitor your investments directly all the time
Rebalancing and fund switching
Fund switches are easy when you invest in a Vanguard portfolio using Moneycube. You can rebalance, or switch among Vanguard investment funds, with no dealing costs, and no tax charges.
One of the great advantages of index funds is that they don’t require all the expensive humans that actively managed funds can’t do without.
That drives down the overall cost to you, the investor. And that has a direct impact on the investment growth you can enjoy.