New(ish) to investing - is my approach sensible?

[PowerthruIT]

Hi all - I commenced my investing journey seven months ago. I started with one All World global EFT complimented with an Emerging Markets EFT on an investing app, but I then added a ready made portfolio from my bank (80 stocks/20 bonds) and an adventurous AJ Bell fund (90% stocks). I put £200 in each a month.

My thinking was that long term I didn't want all my investments (money) on one platform and also wanted to just see which of the three provided better returns over 2/3 years then scale back to two.

Is this a sensible approach or am I overlapping too much? From using an online compound calculator it doesn't seem like I would be losing out on total gains whether my money was grown in one of the three or all three assuming they all return a similar average, unless I am missing something there?

Any advice appreciated

Are there fees? And which charges most? I would probably have stayed with one provider. Investing app sounds a bit vague does that just give you access to various providers if so you could be paying two lots of fees. The investments my bank tried to flog me were pretty terrible, but that was a while ago and probably a different bank. If you are young I would go for S&S for the higher potential growth, but past performance and all that.

By no means an expert I just have one tracker fund chugging along.

Hey thanks for the reply. Trading 212 is the app for my EFTs, and has the lowest fees. The ready made portfolios with my bank and AJ Bell are higher but still very low (0.4% and 0.5% ongoing charges). I know longer term (assuming I managed to stay invested) these fees can eat into gains but in the short term 2/3 years on the amount I invest it's minimal, as I do plan to scale back depending on which performs best

Performance isn't linked to platform, so you could get similar investments on just 2 platforms instead of 3 to reduce your fees. Or even 1.

I think you’re mixing up the platforms and the underlying funds. The funds you pick are what determine your returns. The only questions with the platform are does it offer the fund you want (or equivalent), what does it charge and how is the user experience.

Fwiw You can buy mixed asset funds much cheaper than 0,4%-0.5% fees. Are they active funds? Very expensive for passive.

You will almost certainly have a lot of overlap between your various holdings. I would work out what you actually want to invest in and then stick with one platform. I really can’t see what it adds to have multiple platforms apart from added fees and complexity.

I think you're making it very complicated. The ready made portfolios probably have a huge degree of replication with your all world fund. I think the emerging markets is a good diversification. Other options to diversify would be a fund focusing on all caps Asia or a special situations fund.

There's really no reason to use more than 1 platform/bank.

The ready made portfolio with bonds will perform worse than the other two whilever the market is buoyant. The bonds will never grow as fast as stocks, they are less volatile though and are useful to hold your money with less risk as you approach the point in time you want to withdraw it eg approaching retirement, or if you are less risk adverse in general. It's pointless to compare the products, because they serve different purposes. If you want to hold bonds, fine, but don't expect them to grow at the same rate as your all world fund for example.

My advice would be keep it simple, stick to one platform so you can keep track of what fees you’re paying and what is going on, and dump all your money into something low effort and low risk like global all cap, I use vanguard. Then if you must invest in something riskier you can open a second fund on the same platform.

0.4-0.5% is not very low for ongoing fees. I'm always looking for sub 0.2% unless it's an expensive are to invest in. Why throw away your money? My Global index fund costs 0.13%. The slightly more specialist funds (commodities developing economies etc) can be a bit more pricey.

You can take 2-3 years and look at what performs better as of today but that will tell you almost nothing about performance over the next 3 years - I don't think it's the best way to decide which way to go between your 3 investment strategies.

What do you know? You know what your fees are (both platform fees and fund fees - you can keep them as low as possible. Ready made portfolios are always more expensive that the alternative. You can save quite a lot of money by slimming down the costs you know. I think you are probably best investing in a low cost Global Index Fund with a low cost/free platform.

Ask AI to analyse your investments as a whole give it the details, tell it the plan - ask about risks and cutting costs, make sure you tell them you are investing on 3 different platforms. It's an interesting exercise - sure AI isn't always right but it's another pov. I have found it incredibly useful.