There are definite pros to the choice you have made:
1. 100% equity allocation (given you have cash ISAs already)
2. Low-cost fund -- one of the lowest available--cheaper than most/all global funds
3. Investing in a wide number of stocks through the single fund you have chosen.
But there are a couple of gotchas too, which you might want to think about:
1. Though many of the companies in the S&P500 earn revenues globally, you have placed your money in one geographical location (albeit the most successful location for the past 15 years or so). A global fund would reduce this dependence, to some extent (a global fund is approx 65% US-based, due to the sheer size of the US market)
2. A global fund offers approx 2000 to 4000 companies, as opposed to the 500 in the S&P--greater diversification is normally seen as a good thing, as a passive investor
3. The S&P 500 tends to be more volatile than a global fund, which is great when stocks are rising; more painful in downturns, however.
Really, you should ask yourself why you picked the fund you did. Are the reasons still valid? If so, don't change--it's certainly not a bad choice.
If you think you have picked the wrong fund, it is easy and cheap to change. But only do so once you have definitely decided on a fund/course of action you are going to stick with through thick and thin, because you know why you chose it. By far the biggest mistake in investing is selling when the market tumbles--not your choice of equity fund. The second-biggest mistake is chopping and changing things around.
One caveat--make sure you are investing in the accumulation version of a fund--or that dividends paid out are automatically reinvested for you. This is the best option for an ISA or SIPP which is focused on capital growth (ie, before retirement).
1. 100% equity allocation (given you have cash ISAs already)
2. Low-cost fund -- one of the lowest available--cheaper than most/all global funds
3. Investing in a wide number of stocks through the single fund you have chosen.
But there are a couple of gotchas too, which you might want to think about:
1. Though many of the companies in the S&P500 earn revenues globally, you have placed your money in one geographical location (albeit the most successful location for the past 15 years or so). A global fund would reduce this dependence, to some extent (a global fund is approx 65% US-based, due to the sheer size of the US market)
2. A global fund offers approx 2000 to 4000 companies, as opposed to the 500 in the S&P--greater diversification is normally seen as a good thing, as a passive investor
3. The S&P 500 tends to be more volatile than a global fund, which is great when stocks are rising; more painful in downturns, however.
Really, you should ask yourself why you picked the fund you did. Are the reasons still valid? If so, don't change--it's certainly not a bad choice.
If you think you have picked the wrong fund, it is easy and cheap to change. But only do so once you have definitely decided on a fund/course of action you are going to stick with through thick and thin, because you know why you chose it. By far the biggest mistake in investing is selling when the market tumbles--not your choice of equity fund. The second-biggest mistake is chopping and changing things around.
One caveat--make sure you are investing in the accumulation version of a fund--or that dividends paid out are automatically reinvested for you. This is the best option for an ISA or SIPP which is focused on capital growth (ie, before retirement).
Statistics: Posted by dprees — Mon May 13, 2024 4:36 pm — Replies 3 — Views 262