Investing made simpler

Investing can be made really simple.

It’s as simple to invest in the stock market and manage your own portfolio as it is to manage an online bank account.

But what to buy? With thousands of heavily marketed funds, we get bombarded and over-loaded with information.

To cut through all the noise, I wrote a post in 2016 with an example portfolio suitable for anyone investing for the long term.

The idea was that you could choose to copy some, all or none of it on your journey to financial freedom. It’s as valid today as it was 2 years ago. I called it The Simplicity Portfolio and it contained 4 Vanguard Exchange Traded Funds. So yes, its pretty simple.  But could it be made even simpler?

Well, actually yes it could.

The most important bit of that post was included at the end. To save you the effort of looking it up, I’ll repeat it here:

“One final word.  If you are struggling to start, you can keep it simple with a single global equities tracker fund (such as VWRL: the The Vanguard All World ETF or a LifeStrategy Fund in the UK)…Remember, there is no single right answer in investing.  So don’t sweat the small stuff obsessing about micro differences between different Vanguard products. The most important thing is to get started.”

As I may have mentioned before, just investing in a Vanguard global tracker fund is a pretty tough strategy to beat.  Its simple, its low cost, it gives global diversification in a one stop shop. And its managed by a company (Vanguard) that’s owned by its customers (and is therefore NOT out to screw you).

Looking at Vanguard’s UK & European product range, there are at least 3 options when it comes to global tracker funds:

  1. Vanguard LifeStrategy Funds (fees = 0.22%)
  2. VWRL: The Vanguard All World ETF (fees = 0.25%)
  3. The Vanguard Global All-cap Index Fund (fees = 0.23%)

Despite their popularity, my reservation about the Vanguard LifeStrategy funds is that they’re not a true market weighted global tracker fund.

When they created it, Vanguard decided to overweight UK shares in the Lifestrategy funds.  So LS100 has about 25% of the fund in UK equities versus only about 6% based on market cap weightings.

Hhmmmm….25% of your money in UK shares. What could possibly go wrong?? Let’s keep going.

We then come to the Vanguard FTSE All-World ETF (VWRL). This exchange traded fund does the job of one stop shop nicely.  Its a fund that owns ~3,100 of the biggest companies in the world from all countries. UK shares make up only ~6% of the fund. That’s real diversification for you.


Vanguard’s product range includes both exchange traded funds and traditional open ended mutual funds.  It doesn’t really matter that much whether you choose an Exchange Traded Fund (such as VWRL) or a traditional mutual fund (an open ended investment company such as VRXXB). Both do the job nicely.

Both are physically backed, meaning they hold the underlying shares in all the companies in the fund. The bottom line is that a Vanguard exchange traded fund and a Vanguard traditional mutual fund are far more similar than they are different. If you want to dive further into the technical differences, you can read this.

I personally like the way that Vanguard ETFs (such as WWRL) pay a quarterly dividend: for me its a regular motivational boost.  This is more of an emotional factor than anything: I like a cash reward every 3 months that should come even if the price of the fund has gone down.  The cash dividends can be withdrawn and spent or reinvested every now and again.In contrast, Vanguard’s traditional funds (such as VRXXB) pay the dividends annually.

Both VWRL and VRXXB are available in either dividend paying form (income units which pay cash dividends) or in automatic reinvestment form (accumulation units which use the cash dividends to buy you more units in the fund).


The Vanguard FTSE Global All Cap Index Fund (VRXXB) is an excellent “one stop shop”. “All Cap” means it includes smaller companies as well as global giants.  The number of companies held by the fund at last count was ~6,000 (compared to ~3,100 in VWRL). The inclusion of mid caps means you get an even more broadly based fund. Its inexpensive (fees = 0.24% per year). So we get better diversification at similarly low cost. What’s not to like?

Some will say that you shouldn’t have all your eggs in one basket.  And in many situations in life that’s true. But when you invest in a fund like VWRL or VRXXB, you benefit from broad diversification.  You don’t care how individual companies are doing because, thanks to the magic of capitalism, if one company is losing, others will be winning. Once you own a global index tracker, the entire system is working for you.

And even if Vanguard or your platform goes bust, that doesn’t mean you will lose your assets. There is no such thing as 100% safety in life but you should be OK even if Vanguard gets nuked.  Both Vanguard and your platform have to hold your assets separate from theirs. So even if they go bust, you should still own the same assets, assuming the system works as it should and the Financial Conduct Authority does its job.

Obviously prices will go down as well as up. But over the long run it should go a lot more up than down. And if it doesn’t, then something like the Zombie Apocalypse has happened, we’re all screwed anyway and none of this investing lark matters anyway. So don’t sweat the small stuff.

If you are still procrastinating, here’s a way to break the deadlock…you open a PRACTICE account with an online stockbroker like The Share Centre. Its free and there’s no risk.  They give you £10,000 of monopoly money to play with so you can get used to what it feels like to “buy” a slice of the world economy via an index fund.


Once you’ve got comfortable with your practice account, its super-easy to start investing real money. And the beauty of The Share Centre is that the costs are simple, clear and fixed. On their frequent dealing tariff, a trade costs £7.50, regardless of deal size. I avoid % fees where possible…that’s one reason I don’t use Vanguard’s own platform.

How to buy an index fund

Well first you gotta place your order with your online broker.

Index funds are priced and traded at the end of the day after the stockmarket has closed. The price is based on the value of their assets using a set formula which ensures that you get treated fairly and equally to other investors buying into the fund.

Below I’ve illustrated placing an order on the Share Centre platform. We can find the fund by typing in “Vanguard Global All Cap” into the search bar on your portfolio page (once you have an account set up):

You can see that the fund comes up either as accumulation units (dividends automatically re-invested) or income units (dividends paid in cash).  Accumulation units make sense for people that want everything to run on automatic pilot with minimal intervention.  Income units make sense for people that want income.

All we have to do is click on the “buy” button which takes us to the dealing page.

We then enter an amount to invest (£10,000 in this example) to buy income units in the Vanguard Global All Cap index fund.


I then click Continue…placing my order at “best” (this just means that The Share Centre have to get the best deal they can for you):


When you’re happy with your order, you click confirm to send the order through, sit back and wait it to be completed.

So, that’s it, we’re done.  All you have to remember now is never panic sell during a bear market. A mutual fund is for life, not just for Christmas.

People will tell you its more complicated than this.  And you could make things more complicated…but would it justify the extra time, cost and effort involved?

This is provided for information and is not regulated investment advice.

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  1. I have a sizeable chunk of my money in vwrl and it’s almost too simple to invest like that.
    Much of the investment advice of “but this and that and diversify ” ends up with people having money in dozens of actively managed funds all of which hold maybe thw same shares in more Or less the same proportions. And they charge you for the privilege.
    It’s an industry that aims to bamboozle you out of your money and I for one say “no more”.

    Thanks TEA for the article!

  2. Nice one Barney,

    I am with HL as well, who are more expensive, I should probably move it across to Vanguard directly to save a bit on fees!

    I have been slightly worried about having most of my private S&S ISA investments in Vanguard Life Strategy 80% for a number of years. Do you think I should switch them all into a more globally diversified Vanguard fund (like Vanguard FTSE Global All Cap Index Accumulation), if you were me? 25% tilt to UK is a considerable amount, I do agree.

  3. Good advice as always TEA, personally I invest a good percentage of my SIPP in VWRL and a smaller percentage in VHYL as I am with H&L the 0.45% fee is capped at £200 a year if you invest in ETF, IT & Shares which can make a big difference over time, I do have some funds Fundsmith, Lindsell Train at present my fee’s are about 0.11%.

  4. mmm i like that all cap index fund. didnt know about that one! still its heavy with US at 60 %

  5. arcyallen · · Reply

    I think the caveat here is people need to be “capable” of staying the course when the tides turn rough. Many people think they have the right demeanor, but haven’t ridden through a financial storm. It’s been my experience that most people get very uneasy when their investments plummet, especially when it’s paired with the news blaring that it’s only going to get worse. Even those with a complete understanding of what they’re invested in often pull the trigger and cash out, often near the bottom.

  6. Orlando Costa · · Reply

    Hi, for ETF’s that distribute dividends, you have to pay taxes twice I guess. I am not UK-based (Portugal) and for funds that are domiciled in Ireland, I have to pay 15% (the funds does it) and then an additional 28% when I actually receive them in my bank account. Plus, there is the currency risk since that base fund currency is USD (even if it sold in GBP or Euro) and for Euro or GBP based people, that is not optimal. Do yo take in account these 2 issues of taxes and currency risk?

    1. I, as a seeking-FIRE investor form Poland, invest in VWRL via Euronext Amsterdam and the only tax I pay on received dividends is 19% capital gains tax payed once a year here, in Poland.

      As for the currency risk – there is always one, since the companies you invest in are global companies, trading in many currencies. The ETF base currency doesn’t matter.

      “Note that it’s the currency in which the underlying assets are ultimately priced that determines your currency risk.”
      You can read more here:

  7. ladyaurora · · Reply

    mmmm Ive never lived through a stock market crash,. my portfolio is 43 % in equities. I have a rental property solely for diversification. so ill live off cash and rental income . im hoping that will keep me to stay the course and not sell my equities . i think sites like these will be invaluable when that time comes too. all encouraging one another. Also, my equity portfolio is 40 % UK rightly or wrongly. if it wasnt in the UK it would have to be in US which i dont fancy due to its high valuation.i missed getting in early on the US bull run so entered the US market quite high so dont think i would be happy with 60 % in there at this moment in time.

    1. el Deco · · Reply

      I maxed out my ISA last year in LS100 dripped in from September to Jan. Currently +9.25% . Am switching to to FTSE global all cap index fund for this year’s ISA. So glad to have the money working. Just wish I’d found this site earlier. ( 41 this year ! )

  8. One point you don’t make which is worth noting is quite how easy it is to set all of the above up to happen automatically. The knowledge that every month I’m going to be putting another slug of a Vanguard fund into my ISA without having to lift a finger gives me immense satisfaction. I had to spend a hour or two in total getting that set up and now it will happen until I retire (hopefully early…).

    On simplicity, I also think that we forget quite how easy things are in an online world compared to the past. I can remember my father filling in piles of paper application forms when the public were allowed to buy BT shares. Frankly that’s the sort of barrier to entry that would still put many people off. By contrast, as you rightly point out, if you can do online banking you have the skills you need to open an investing portfolio.

  9. Very simple to invest online now. ETFs are extremely popular in Australia as they have a lower management fee then the same mutal fund. A lot of Aussie’s over weight Australia because of how well over recent years it has performed and high dividend rate. But seeing as we are only 2% of world economy that is missing out on a big share of the rest of the world.

  10. John of Hampton · · Reply

    Once again, very timely advice. I have watched my investments lose a lot lately. But (a) I am still ahead of where I was when I started, (b) I am beating anything a “high-interest” account at a bank would have brought, (c) having read you and Mr Money Mustache, I was expecting a downturn, and have the patience to sit it out until the good times return. So, thank you for your blog, and keep up the good work!

  11. SurreyBoy · · Reply

    The Bogleheads forum from 2014 has interesting reflections on the 2008 crash

    From memory there are posts on there from 2008 and 2009 where people report reaching the end of their tether and selling out. I guess what this tells you is invest to your risk tolerance and if all else fails just grin and bear it – though easier said than done

  12. Ok so numpty question incoming…
    Current SIPP consists of around 200k invested in Lifestrategy 60 via HL.
    If one were to wish to reallocate to a similar portfolio to the Simplicity Portfolio, would this incur actual sales of stocks or (being as everything is moving around within the realm of Vanguard) would the units merely be transferred?
    And if so, would there likely be a large transactional fee? I suspect that the transfer of units would also be dependent upon market timing as well i.e. if LS60 was down (currently returned -0.7% over the last 12 months!) and the other funds were priced higher?

    1. Noviss, you will need to sell, wait for the money to appear,and then buy.
      There is no transaction fee to sell funds in HL.
      Note that if you buy ETFs then there is a 0.5% stamp duty fee, however here’s the big win with HL. HL have a 0.45% annual fee on funds and shares in a SIPP. However the charge on shares (which includes ETFs) is capped at £200 a year. So after one year you will be significantly better off to the tune of £700 a year (£900 – £200). S breakeven in about a year and a bit as far as fee s are concerned.
      Re your market timing, if LS60 is down so will VWRL or similar be, because they are still large diverse funds. So I wouldnt worry about that.

      1. Jon, that is an excellent reply, very helpful thank you!

        1. Joe sorry ☺️

      2. No stamp duty when buying ETFs.

  13. Could you please explain how you calculate the yield on VHYL to be 4.1% ? I have checked the Vanguard website, and also done my own calculation based on distributions received. I cant get it to be more than 3.56%. How is it 4.1%, please? I am really puzzled over this and would be most grateful if you could explain.

  14. Castlearcher · · Reply

    Hi TEA. Love the website. What are your thoughts on so called ethical/socially responsible investing? I believe Vanguard has a global SRI fund but charges a bit more (0.35%). I guess that a themed fund also risks diverging from average market performance which your aforementioned world/global funds seek to replicate…

  15. Eddie · · Reply

    Hi All, are there currently any better options than Share Centre who charge £7.50 per deal? Quite significant if monthly drip feeding in to Vanguard funds….

    1. el Deco · · Reply

      Can’t you go direct to Vanguard?

  16. el Deco · · Reply


  17. […] This step is important in terms of long term growth of your savings, but I’m really not a financial expert. If you’re interested I’d recommend having a look at this blog on the subject of FIRE and investing. […]

  18. Extremely helpful article!! Thank you 🙂
    Have just set up my own Vanguard account and also set up regular monthly payments, very very simple to do.
    I’m a complete noob in the world of investing, I have selected 4 equity and one lifestrategy in the ratio below.
    Can anyone tell me am I being stupid here with overlaps? Am I better to just pick one equity fund ?
    Not averse to a bit of risk, 33 yrs old and looking to invest long term. Want to be in the market so I can buy easily during any crash that may be coming!! Thanks for any advice people wish to share…

    VHYL 25%
    VUSA 28%
    VEUR 18.5%
    LS60 18.5%
    Global All Cap 10%

  19. Hi could you please do an article on platforms to use for investing?
    Many thanks

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