From Morningstar: 2024-03-28 05:38:00

In 2022, global equity markets faced challenges, as the Morningstar Global Markets Index and Corporate Bond Index dropped by nearly 18% and 17.3%, respectively. Despite market turbulence, the investor held their ground. However, in 2023, the Morningstar Global Markets Index surged by 22.13%, highlighting the unpredictable nature of financial markets.

Their investment strategy for 2024 and 2025 remains unchanged – maintain a diversified, low-cost portfolio and avoid predicting market moves. The investor’s equity component consists of the Vanguard ESG Global All Cap UCITS ETF, which aligns with their preferences, while the fixed income portion relies on the Vanguard Global Aggregate Bond UCITS ETF for cost-effective global bond exposure.

The Vanguard Global Aggregate Bond UCITS ETF faced challenges in recent years but rebounded in 2023, benefitting from declining government bond yields and a China underweight. Despite tough times, the investor held onto their position, recognizing passive funds can be vulnerable during periods of rising rates.

While no longer part of the investor’s ISA, the Vanguard LifeStrategy series is commended for its diversification, cost-effectiveness, and strategic asset allocation. The series starts with a conservative 20% equity exposure, gradually increasing based on risk tolerance. Vanguard’s research suggests a market-cap-weighted approach effectively diversifies a portfolio, making these funds a competitive choice for investors.



Read more at Morningstar: ‘The 3 Funds I Hold in my Vanguard ISA’