I assume you are talking about VWRL... which is denominated in GBP, but 90% of its underlying assets aren’t in GBP. As a result a significant part of the ETF appreciation since 2016 (in addition to a 30% of the underlying assets in local currency), has been driven the by the depreciation of the £ against all other major currency - compounding the growth of VWRL.
If you want to avoid timing the market (you’re most likely to be unlucky over the long term than not), you could always rebalance some of that ETF w a FTSE ETF such as ISF. It has the benefit to lower you FX exposure, lock yourself at a historically low GBP rate and hope for an eventual reversal to mean. And stay in the market. The dividend payout is also much better at around 4%. Also, 70% of the FTSE100 companies revenue are from outside the UK, providing you w an operational FX hedge within that investment vehicle.
Just my 2 cents
Thing with the FTSE 100 though, is exactly as you say - most of the money is outside the UK. Just because it's listed in GBP, doesn't mean anything - when the pound drops, the FTSE 100 goes up - and vice versa! You can't have it both ways, both an FX risk reduction AND a hedge.
If you want "true" (ish) UK, then the FTSE 250 is a much 'better' idea.
@OP... there is no 'right answer' to this other than to review your asset allocation for risk tolerance. If you're nervous and concerned about a 30% drop in stocks... you have too much in stocks.
IF the pound goes back up (if Boris Johnson proves to be less idiotic than he seems, say...), then yes all the foreign stuff you hold will go down in value, as will the FTSE 100.
It's good to hear from a fellow holder of VWRL and (perhaps) ISF. And nice to hear too from some posters with an appreciation of the complications behind all our investments. And I agree that they have look flattered in GBP terms as the pound has weakened.
One thing on the mid-caps (FTSE 250) - there is about 50% of revenue coming from overseas, so even that would not be a particularly pure UK investment. But then a pure UK investment would ignore that fact that a lot of an individual's costs are going to be dependent on the exchange rate with foreign currency, so it makes sense to have some of your investment earnings in those currencies.
The foreign currency issue is a complicated one. Economies are so interrelated now, that I think it is a bit of a red herring as far as equities are concerned. As your living costs are going to be related to the strength or weakness of your home currency (after all, commodities, such as oil, are usually priced in dollars), there are all sorts of "natural" hedges going on that are too tricky to really work out. Perhaps a bigger risk is sitting with a large cash position in pounds if the currency markets get spooked by Brexit (as has, indeed, happened) - but if the "value" of your pounds has dropped by 20% it is mostly invisible to the average person in the street, as the number in your savings account is the same!
Actually a bigger concern to me is political risk - that's what makes VWRL attractive, even if it is 50% US. If the UK gets a Corbyn-led government, he's floating the idea of seizing 10% of every UK-listed company (not to mention nationalising industries). That's going to lead to an avalanche of FTSE100 delistings faster than you can say "Karl Marx". Now what's that going to do to a FTSE 100 tracker?
For the OP, my thought is firstly decide what your objective is. If you know where you are trying to get to, it might be more obvious what you should do. (Hmm, maybe I should do that myself...)