Your Investment Profile
Recommended Allocation
Expected Performance Estimates
Comparable UK Funds
Frequently Asked Questions
What is the 100 minus age rule for asset allocation?
The traditional rule suggests holding (100 minus your age) as a percentage in equities and the rest in bonds. For example, a 40-year-old would hold 60% equities. Many modern advisers use 110 or 120 minus age to account for longer life expectancy and low bond yields.
What is the difference between Vanguard LifeStrategy 60 and 80?
Vanguard LifeStrategy 60% Equity holds 60% equities and 40% bonds, targeting a balanced risk profile. LifeStrategy 80% Equity holds 80% equities and 20% bonds, suited for investors with a higher risk tolerance and longer time horizon. Both are popular, low-cost options available on most UK platforms.
How does investment time horizon affect asset allocation?
Longer time horizons allow investors to hold more equities because there is more time to recover from market downturns. Investors with 20+ years can typically hold 80–100% equities. Those within 5 years of needing funds should reduce equity exposure to 40–60% to reduce sequence-of-returns risk.
What are alternatives in a UK investment portfolio?
Alternatives include real estate investment trusts (REITs), infrastructure funds, commodities, and absolute return funds. They can provide diversification as they often move differently from equities and bonds. A typical UK allocation is 5–15% in alternatives, though many simple portfolios exclude them.
Should I include cash in my long-term investment portfolio?
A small cash allocation (2–5%) in a long-term portfolio provides a buffer for rebalancing and unexpected expenses without needing to sell investments. For short-term goals within 1–2 years, cash or cash ISAs are more appropriate than market investments.