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Post by carol167 on Jul 5, 2020 8:05:18 GMT
So here's a thought....
For those of us that have a large amount of cash that we don't want to sink in medium to high risk investments and don't need in the short term (several years), how about dumping at least some of it in LS20 for a year or two instead of leaving it in cash accounts earning next to nothing ? (or locking away in 1yr/2yr/3yr bonds for next to nothing).
I already have a S&S strategy separate to this idea but now have a significant amount of cash (partly from withdrawing from P-2-P) that was never meant to be in cash as part of my long term ongoing strategy.
Any comments welcome (@wallstreet need not apply ;-)
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Post by Deleted on Jul 5, 2020 9:08:33 GMT
Carol, not sure what LS20 is. Do you mean buy a Lexus?
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Post by carol167 on Jul 5, 2020 9:14:48 GMT
Carol, not sure what LS20 is. Do you mean buy a Lexus? Vanguard's Lifestrategy lowest risk fund. 20% Equities, 80% bonds.
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corto
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Post by corto on Jul 5, 2020 9:44:41 GMT
I wouldn't hold LS20 outside a tax wrapper as it pays interest and not dividends given it's less than 40% equities. That may quickly eat up your interest allowance.
It did drop some 10% in March but is back already. Given there could well be another major dip it's obviously nothing to park money in short-term.
LS40 pays dividends and is probably still less risky on the medium/long term than most p2p, where you say some of the money comes from.
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hazellend
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Post by hazellend on Jul 5, 2020 9:56:41 GMT
Carol, not sure what LS20 is. Do you mean buy a Lexus? Vanguard's Lifestrategy lowest risk fund. 20% Equities, 80% bonds.
Why not look at your entire portfolio as one entity and choose an asset allocation to cover your whole portfolio? Say you want to be 60:40 then just allocate across all your accounts to achieve this. I don’t have anything other than a tiny allocation to cash at the moment, but if I did I would keep it in my preferred cash tax shelter, premium bonds.
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daveb
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Post by daveb on Jul 5, 2020 10:17:38 GMT
Corto makes a point I hadn't considered: I couldn't immediately find the rules for tax treatment of the LS funds held outwith an ISA. So if you own LS80:20 do you pay dividend tax on 80% of the return and interest tax on 20%?
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corto
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Post by corto on Jul 5, 2020 10:29:13 GMT
Corto makes a point I hadn't considered: I couldn't immediately find the rules for tax treatment of the LS funds held outwith an ISA. So if you own LS80:20 do you pay dividend tax on 80% of the return and interest tax on 20%? I don't think so. To my knowledge if the equity fraction is >40% it is considered all dividends, if it's smaller its interest. I may be wrong.
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Post by carol167 on Jul 5, 2020 10:36:17 GMT
I wouldn't hold LS20 outside a tax wrapper as it pays interest and not dividends given it's less than 40% equities. That may quickly eat up your interest allowance. It did drop some 10% in March but is back already. Given there could well be another major dip it's obviously nothing to park money in short-term. LS40 pays dividends and is probably still less risky on the medium/long term than most p2p, where you say some of the money comes from. Interesting. Though I don't earn enough to pay any tax anymore. I shall bear that in mind. I also have the max in premium bonds, so adding to those is not an option currently.
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Post by Deleted on Jul 5, 2020 10:51:57 GMT
But you would be putting 20% in equity... I have a lot of equity but not that keen in risking 20% in general "equity".
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corto
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Post by corto on Jul 5, 2020 13:21:41 GMT
But you would be putting 20% in equity... I have a lot of equity but not that keen in risking 20% in general "equity". Given it's Vanguard, the Equity component are the usual candidates. Almost 14% Vanguard FTSE all world ex UK. Another 5% FTSE UK all share index tracker. www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/v/vanguard-lifestrategy-20-equity-accumulation
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corto
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Post by corto on Jul 5, 2020 13:26:19 GMT
But you would be putting 20% in equity... I have a lot of equity but not that keen in risking 20% in general "equity". Given it's Vanguard, the Equity component are the usual candidates. Almost 14% Vanguard FTSE all world ex UK. Another 5% FTSE UK all share index tracker. www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/v/vanguard-lifestrategy-20-equity-accumulation One probably could just get an 80% global bond and 20% VEVE or VWRL leaving out one level of fees without changing much. Or go at a different ratio according to carol's wider portfolio as hazellend suggested.
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Post by Deleted on Jul 5, 2020 15:26:59 GMT
I think I'd stick with cash.
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