Have you made the most of your annual £20,000 individual savings account (ISA) allowance? If you have children, what about the £9,000 Junior ISA allowance?
Have you even opened a stocks and shares ISA yet? With the tax-year finale on 5 April just weeks away, it’s a good time to consider these questions. After all, every little extra invested now can get you closer to your long-term goals. And if you don’t use your 2022-23 allowances soon, you’ll lose them too.
Here’s what four more of our experts are currently doing with their own money. This follows the four expert insights in our first instalment.
Remember, though, that these are their personal choices. Whichever investment strategy is right for them, may not be right for you.
Always invest based on your own goals and circumstances. If unsure, speak to a financial adviser.
Kunal Mehta, senior fixed income product manager: adapting to change
“My two boys’ Junior ISAs are all in the Vanguard LifeStrategy 100% Equity fund. It’s an appropriate investment as they are only aged 2 and 6, so the money I pay in each month has plenty of time to grow. I want them each to have a healthy sum of money that sustains them through their studies by the time they enter adulthood. Not that I know what higher education will look like by then, given the recent and rapid advent of new AI-enabled research tools. It’s something that’s making me think more broadly about my own plans. My wife and I are talking more and more about retirement – but whether we retire because we’ve grown tired or have been out-skilled by new tech, we’re not so sure anymore!
Either way, as we enter our 40s and prime working age, it’s making us think more about being adequately prepared, financially, for the next chapter in our lives. In this respect, my ISA is intended to supplement my pension, so I have more options later in life. I am currently about three-quarters invested in the Vanguard LifeStrategy 100% Equity fund, with the rest in the actively managed Vanguard Emerging Markets Bond and Vanguard Global Credit Bond funds. Question is, do I now need to step up both my ISA and pension savings? Let’s just say it’s something that is under review.”
For more on the difference between active and index funds, read this article
Shaan Raithatha, Vanguard senior economist: bit more diversification
“Our new house and young family account for most of my money these days but the few additional ISA savings we’ve managed to muster this year have been directed towards bonds. Previously, I just had shares – both the Vanguard LifeStrategy 100% Equity fund and the actively managed Vanguard Global Equity Fund.
And my intention was to stick with just shares until at least my late 40s or even 50s. But with yields on bonds now higher after last year’s selloff1, the outlook for bond returns looks significantly better to me than it used to be. So although my equity holdings remain the same I recently invested a lump sum in the Vanguard Global Aggregate Bond UCITS ETF, giving my overall portfolio a bit more diversification.”
For more on the difference between shares and bonds, read this article
Sarah Gibb-Cohen, senior manager, sales enablement: new long-term targets
“My regular saving and investing helped to fund a house renovation last year. I’m loving our new kitchen and family room! But it’s time now to turn my attention to longer-term goals – namely, the future of my little girls and supplementing my company pension. My daughters are aged 3 and 7, so I have plenty of time to put money aside for them if they want to go to university or need help with a house deposit. Same with my retirement. As such, I am investing in riskier assets with the expectation of a higher return, which means investing in shares.
Seeking to care for the world that my daughters grow up in is also important to me. So the regular saver into my ISA invests in the Vanguard ESG Developed World All Cap Equity Fund. I like this fund because of its ESG2 characteristics but also because its holdings are diversified across more than 4,500 individual companies. Having a monthly direct debit ensures I do actually save! It also takes away the pressure to time my investments.”
Mark Fitzgerald, head of product specialism
“My main goal is to enhance my pension investments so I have more options once I pull back from work. And since I already have a Vanguard Target Retirement Fund in my self-invested personal pension (SIPP), which automatically de-risks3 the closer I get to my intended retirement date, that means a greater focus on capital growth with higher-risk shares. I’m still only in my 40s, after all.
My general aim is to keep things simple and manageable with a mix of low-cost index and active funds that spread my risks globally across thousands of different shares and bonds. I have no cash balance as I prefer to be all-in, with any dividend payments reinvested. So in my ISA I am currently invested in our LifeStrategy 100% Equity fund, Global Emerging Markets and Global Equity Income funds. I also have some money in the Vanguard S&P 500 UCITS ETF and Vanguard ESG Developed World All Cap Equity Index.
For me, it’s about adding to what’s already in my portfolio while remaining fully invested, especially when markets are weak – which they clearly were last year. I take a long-term view and stick to my strategic guns. Never sell until you need the money! The ESG fund is my newest addition and reflects my concerns over the potential long-term impact on the global economy of such things as climate change. So I’m gradually pivoting the overall exposure of my portfolio to something less reliant on the current crop of large companies. The idea is to lean in gently with new cash flows rather than switch between funds.”
1 Bond yields move inversely to bond prices, which is why yields rise when bond prices fall.
2 ESG stands for environmental, social and governance. To find out more on what this means and Vanguard’s range of ESG funds, visit our main ESG page.
3 Changing the balance of shares and bonds increasingly in favour of bonds which are historically less volatile than bonds.
Investment risk information
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