I would pick a fund/funds that matches my risk target/preferences (e.g. equity funds riskier than bonds, small cap riskier than large cap/overall market, foreign riskier than domestic). If I had a very large risk tolerance, I might also allocate a small percentage of your portfolio to single name stocks.
Lastly, I’d just keep in mind the risk you’re taking with your investments. A five year time horizon doesn’t strike me as particularly long or compatible with having a high risk tolerance. Investing in equities can give you high returns over a long time horizon, but their volatility means that you can have large negative returns over a short time period (e.g. the S&P had a max decline from its peak of almost 60% during the 2008-9 financial crisis).
(Standard disclaimer about investing being risky, please do your own research as well.) Good luck!
It sounds like you are looking for something a little more aggressive though. Wisdomtree and State Street offer ETFs tracking a variety of indexes. Keep an eye on expense ratio though. Anything over 0.75% is rather high.
Also, as a side note ETFs can provide tax-advantages over mutual funds when you sell.
If you want something more than index funds - buy stocks yourself. Managed funds seem kind of pointless to me.
In terms of picking equity Vs bond ratio, if you're aggressive go 75% equity. I think (might be wrong) returns actually go down over 75%. For geography just match the world economy.
The Intelligent Investor (By Benjamin Graham) covers the whole thing with sources and statistical backing. I've been following this for 2 decades and made about 7% per annum so I'm happy. It's low stress, low touch, low risk, decent return and compatible with various tax wrappers (pensions etc). What's not to like.
- etfdb, an outstanding repository of information about individual exchange-traded funds. https://etfdb.com/
- morningstar x-ray, a platform for evaluating the balance of an entire portfolio. Good for seeing where your exposure is given different hypotheticals. https://www.tdameritrade.com/education/tools-and-calculators...
- fossilfreefunds.org, an engine for evaluating the carbon exposure for funds. There's a staggering amount of oil/gas/coal currently on the books as value for companies that ultimately will need to stay in the ground. You and me likely aren't running in the circles capable of picking the winners in this carbon bubble, so I generally try to avoid my exposure (I don't want to left holding that bag). https://fossilfreefunds.org/
These two statements would be considered contradictory by common financial standards. 5 year horizon means you need the money in 5 years. However, high risk means that in 5 years (a short amount of time compared to normal equity volatility) there's a sizeable probability that you will have negative returns.
I recommend the questionnaire here as a starting point:
https://retirementplans.vanguard.com/VGApp/pe/PubQuizActivit...
The answer to your question is "it depends". Mainly on your level of involvement in your portfolio and what your goals are in life. Also is your account qualified or non-qualified (taxable vs non-taxable). So there's no one-size-fits-all.
Personally, I am a "set it and forget it" kind of person. You can buy a low-cost target date mutual fund that takes care of all the portfolio management under the hood. If this is in a taxable account - you may have the benefit of tax free portfolio management (Youll have to check if the fund has paid or could pay out capital gains that would be taxable).
Ultimately on a long timescale I wouldn't get distracted by the side shows (highly focused thematic funds). Bet on broad diversification with low management fees and dividend reinvestment and you'll be golden.
Caveat: I dont want to sound overly prescriptive. Again, theres no one-size-fits-all solution.
Once you do that, find equivalent funds across the various companies, and pick the one which has the lowest fees.
For increased risk, put heavy allocation into a single sector. For reduced risk, pick multiple asset classes (e.g. bonds and international). For the most conventional options, look at the composition of target date funds, which balance risk geographically and temporally.
Once you have a picture for what funds you want, use a screener to explore from there. Iterate on the thesis as needed
"What to expect from funds after they gain 100% or more in a year? Trouble, mostly." - Jeff Ptak (Morningstar)
https://www.morningstar.com/articles/1066496/ark-innovation-...
https://www.bogleheads.org/wiki/Three-fund_portfolio
For finding the funds - I look for passively managed funds with low expenses ratios. I use Fidelity and Merrell Lynch as my brokerages and I largely prefer ETFs over index funds.
This seems… short. Can you put more context on why it is five years and not more?
Part of savings is with Vanguard as well. 40% emerging markets VFEM, 35% FTSE developed world VEVE and 25% in global small cap index fund.
My horizon is longer than yours though. 10+ years.
In general though when searching for a fund you want to look for low cost index funds. The lower cost the better.
Disclaimer: not affiliated, but I hold Vanguard index funds.
[0] www.morningstar.com
Index funds are often a better bet on a net basis.