Vanguard Life strategy post brexit
Comments
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This actually my be an area where the L&G funds offer better potential than the VLS. VLS is return focused and very static in its allocations. L&G is risk focused and has more fluid allocations. So, for someone that doesnt mind a bit of management but using passives as the underlying investments, it may be a case of looking at the different multi-asset funds and picking the one that is appropriate to them.
Depends on whether you look at the managers as an asset or a liability.
Just checked on trust net and vls80 is 4th or 5th out of over a hundred funds in the mixed asset 40-85% shares sector for 1, 3 & 5 years. L&g multi index has been running for less than three years but seems to be far more middling, whether that alters in the years to come will be interesting to see.0 -
Just checked on trust net and vls80 is 4th or 5th out of over a hundred funds in the mixed asset 40-85% shares sector for 1, 3 & 5 years.
It is worth noting that the the 40-85 shares sector covers a major spread of risk profiles/volatility. It is a few years old now but research on the 1-10 scale used showed that the mapping for 40-85% equity was spread over risk 7, 8 and 9. Not at all surprising when you think about it as there is a lot of difference between 40 and 85% equity.Depends on whether you look at the managers as an asset or a liability.
The static asset allocation that Vanguard use and periodically adjust is a management decision. So, is their decision an asset or a liability?L&g multi index has been running for less than three years but seems to be far more middling, whether that alters in the years to come will be interesting to see.
If you use the funds with the closest mappings (as they are not like for like) you tend to find the lower to medium risk ones are favouring L&G. The higher risk ones are favouring VLS. Short history on the L&G is not ideal but what we have seen is that in growth periods, VLS outperforms L&G but in negative periods, L&G outperforms VLS.
L&G has property in its allocation. So, has taken a short term hit. VLS has no property.
Vanguard is return focused. L&G is risk targeted. So, there are differences in the strategy. Risk targeted may be more useful for the OP given his concerns.
Remember that suitability isnt about getting the best returns in a given period.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
I made the plunge into VGLS last week and now it seems a bit cheaper - the macro FX environment for sterling and GS' recent viewpoint on Americas equities make the outlook seem better later down the line.. oh well.
Considering what people've said here and the fact i was ready to upsize, holding out may make more sense, though based on common sense Mathusian's comment is logical - That said the smart investor should wait for the equity plunge as margins eventually add up!0 -
Stop looking at it.I made the plunge into VGLS last week and now it seems a bit cheaper - the macro FX environment for sterling and GS' recent viewpoint on Americas equities make the outlook seem better later down the line.. oh well.
An economic cycle is around 10 years. It will move an awful lot in that time in both directions. A couple of days is nothing.That said the smart investor should wait for the equity plunge as margins eventually add up!
People said that in 2003 and the following 4/5 years saw investments double. So, when is this plunge going to happen?I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
It is worth noting that the the 40-85 shares sector covers a major spread of risk profiles/volatility. It is a few years old now but research on the 1-10 scale used showed that the mapping for 40-85% equity was spread over risk 7, 8 and 9. Not at all surprising when you think about it as there is a lot of difference between 40 and 85% equity.
The static asset allocation that Vanguard use and periodically adjust is a management decision. So, is their decision an asset or a liability?
If you use the funds with the closest mappings (as they are not like for like) you tend to find the lower to medium risk ones are favouring L&G. The higher risk ones are favouring VLS. Short history on the L&G is not ideal but what we have seen is that in growth periods, VLS outperforms L&G but in negative periods, L&G outperforms VLS.
L&G has property in its allocation. So, has taken a short term hit. VLS has no property.
Vanguard is return focused. L&G is risk targeted. So, there are differences in the strategy. Risk targeted may be more useful for the OP given his concerns.
Remember that suitability isnt about getting the best returns in a given period.
Suitability is sort of about getting the best return for a given period though.
From your perspective as an adviser, cynically speaking, there are two issues if you get a complaint. The first is whether your recommendation is suitable for the client, and there would be a tendency I'd have thought to underestimate people's risk tolerance on the basis that there is less risk of being accused of poor advice. However if there is a finding of unsuitability then the redress is to put the individual into the situation they would have been; if the return exceeds that from a more appropriate risk level there is obviously no redress to be made.
It will be interesting to see how these multi asset funds perform over time, both relative to each other and to fully active funds.0 -
I made the plunge into VGLS last week and now it seems a bit cheaper - the macro FX environment for sterling and GS' recent viewpoint on Americas equities make the outlook seem better later down the line.. oh well.
Considering what people've said here and the fact i was ready to upsize, holding out may make more sense, though based on common sense Mathusian's comment is logical - That said the smart investor should wait for the equity plunge as margins eventually add up!
You're trying to time the market. Forget about that and just invest and let it sit there.
You are assuming that you can time the market with enough skill to outweigh the gains made by being in the market for a longer duration. How are you going to do this???That said the smart investor should wait for the equity plunge as margins eventually add up!
I invested in 2013 in the LS80% ACC. At that time the buy price was £119 per unit. Since then it's increased by approx 35% n value. I dropped another £1K in today at a buy price of about £160 (or whatever it will be when the trade goes through in the next few days). On the face of it I am buying at a peak, but who's to say that in another 3 years today's purchase won't have increased by another 30+%? Now I could wait until the price drops, but then again it may not and I would lose the growth that I would have gained from when sitting on the sidelines.
Last year I was buying at about £143 per unit, which was a lot more expensive than 2013's prices. Now, should I have waited for the "equity plunge"? If I had, then I would have missed out on the growth that I have had.....the units I bought last year are now up on average 14%.
As long as you have your appetite for risk correct and you are prepared to buy and forget it for a decade, then just buy it now.0 -
Suitability is sort of about getting the best return for a given period though.
If that was the case, people would be jumping from commodities to bio to tech to financials or whatever.
Suitability is about having what is right. That means being able to stomach the downside when it comes as well as being happy with the upside.From your perspective as an adviser, cynically speaking, there are two issues if you get a complaint. The first is whether your recommendation is suitable for the client, and there would be a tendency I'd have thought to underestimate people's risk tolerance on the basis that there is less risk of being accused of poor advice. However if there is a finding of unsuitability then the redress is to put the individual into the situation they would have been; if the return exceeds that from a more appropriate risk level there is obviously no redress to be made.
I focus a lot on the downside in my discussion. After all, the FOS always say that complaints increase when the markets go down. So, I would be silly not to consider it. So, you are right, that it is in my head when I have the discussions. However, the discussions are to provide knowledge and understanding. It is that which prevents complaints as someone who knows and understand that a drop of x% will occur at some point is not going to complain when that comes alone. Investing below their risk profile doesn't serve a purpose. Although from what I see on the board and what I see via advice for myself and the advisers that work for me is that the advised cases tend to be lower risk than the typical DIY investor.
DIY investors can do whatever they like. That is what DIY is about. But we know from this section that we do see fashion investors, those that invest above their risk profile and capacity for loss and those that really dont have a clue what they are investing in.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Suitability is sort of about getting the best return for a given period though.
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I dont think so. Suitability is about getting the return you need at a risk or volatility you can live with or perhaps even better to say its minimising the risk to achieve a given objective. If you want maximum returns take up gambling. You might be lucky. If you only need say a 5% return why invest in anything other very safe bonds and highly defensive equities.
In almost any sector there will be funds that cover a range of risks. No matter whether its passive or active, a higher return doesnt necessarily mean it's a more suitable fund.0 -
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Very hard to stop the monitoring syndrome, even though my horizon might be stretched as you say!Stop looking at it.
An economic cycle is around 10 years. It will move an awful lot in that time in both directions. A couple of days is nothing.You're trying to time the market. Forget about that and just invest and let it sit there.
You are assuming that you can time the market with enough skill to outweigh the gains made by being in the market for a longer duration. How are you going to do this???
I invested in 2013 in the LS80% ACC. At that time the buy price was £119 per unit. Since then it's increased by approx 35% n value. I dropped another £1K in today at a buy price of about £160 (or whatever it will be when the trade goes through in the next few days). On the face of it I am buying at a peak, but who's to say that in another 3 years today's purchase won't have increased by another 30+%? Now I could wait until the price drops, but then again it may not and I would lose the growth that I would have gained from when sitting on the sidelines.
Last year I was buying at about £143 per unit, which was a lot more expensive than 2013's prices. Now, should I have waited for the "equity plunge"? If I had, then I would have missed out on the growth that I have had.....the units I bought last year are now up on average 14%.
As long as you have your appetite for risk correct and you are prepared to buy and forget it for a decade, then just buy it now.
Have to say you've touched on the many points the retail investor considers before taking hitting buy/sell, and in short I don't have that foresight, only a lingering doubt to prevent me from taking risk. Only thing to mention is that VGLS performance record seems to add little downside to the timing of investments into it, drip feeding is a solution but has its negatives as well. I suppose an alternative is switch to other similar performing but cheaper passive funds to get more bang for your buck.0
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