Vanguard direct to customer offering confirmed

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  • racey
    racey Posts: 165 Forumite
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    dunstonh wrote: »
    Another thing to note is that passive is still an investment strategy.

    Vanguard Lifestrategy 60 (a strategy that only uses passives) was top quartile in 2016 and 2014. It was second quartile in 2015. It was third quartile in 2012 and bottom quartile in 2013 and year to date in 2017.
    The top quartile of what? All funds?
    Sorry, I'm not sure what eve above means.
  • badger09
    badger09 Posts: 11,184 Forumite
    First Post First Anniversary Name Dropper
    Hello again all,
    It is becoming difficult to follow this thread as it seems to be about types of investments against the opening posts information re Vanguard new offering. Or is it me?
    Regards
    Billy

    That's what tends to happen on an internet forum.

    By all means bring it back 'on track' if you have a specific question, or comment:D
  • badger09
    badger09 Posts: 11,184 Forumite
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    racey wrote: »
    The top quartile of what? All funds?
    Sorry, I'm not sure what eve above means.

    The top/second/third/fourth quartile of comparable funds.

    Top is obviously best;)
  • Linton
    Linton Posts: 17,085 Forumite
    Name Dropper First Post First Anniversary Hung up my suit!
    racey wrote: »
    The top quartile of what? All funds?
    Sorry, I'm not sure what eve above means.

    Funds are categorised into sectors. It is common to talk about a fund's performance within its sector as being 1st quartile ie in the top 25%, 2nd quartile ie in the 26-50% band etc. VLS60 is in the "mixed Investment 20-60%" sector.
  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
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    edited 18 May 2017 at 7:43PM
    Linton wrote: »
    Funds are categorised into sectors. It is common to talk about a fund's performance within its sector as being 1st quartile ie in the top 25%, 2nd quartile ie in the 26-50% band etc. VLS60 is in the "mixed Investment 20-60%" sector.
    I think the VLS60 was mixed investment 40-85% equity last time I looked, which is quite a broad bucket in terms of risk profile of funds that fit in it. It was the VLS80 fund that was rammed up against the top of that range at a permanent 80%. They put VLS60 in the same category, rather than have it be absolutely the highest risk thing in the 20-60% equity group.

    Though VLS60 will be in the top half of riskiness of funds in that sector: never dropping below 60% equities, always having 75% of its equities overseas, and taking its UK exposure from tracker only therefore high reliance on the multinationals with large proportions of their revenues in dollars or euros or other currencies than pounds, and not having any non-equity diversifiers other than a relatively fixed mix of bonds.

    So, it did well when GBP currency tanked against other currencies and global equity markets did extremely well at the same time as bonds were showing continuing strength. A lot of other mixed assets funds are more cautiously positioned.
  • badger09,
    Thank you for the reply. I was considering adding another post to follow on from my earlier information. I thought some members may have been interested in my contact with Vanguard (email and telephone) since I transferred some funds. However, if it is the norm to ignore original topics, I shall refrain.
    Regards,
    Billy
  • Glen_Clark
    Glen_Clark Posts: 4,397 Forumite
    Being Vanguard I thought the fees would be less, as they are in America.
    But I suppose they can't undercut other platforms too much or the other platforms wouldn't sell Vanguard funds?
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
    First Anniversary Name Dropper First Post
    My experiences are not anecdotal, they are factual, and they do not involve just one fund, but a group of funds, over a long period (20 years or so), making it unlikely - but not impossible - that luck was on my side.

    I did not mean to say that you did not actually end up on the plus side of the market, just that forums and not places for absolute rigor.
    However, you say "People owning passive funds will on average beat those owning active funds". That assumes random fund selection. And indeed if you are daft enough to choose funds in that manner, then yes I agree with your remarks. However, one of the posters - Dunstunh - is an IFA, and has been so for quite a few years. That means that he has long term experience of choosing funds, and he states that he too can select active funds that outperform passive ones. Bear in mind that he will have helped goodness knows how many people select funds, and so you would expect his experiences to be more representative.

    The average person will not have the knowledge (I'd still ascribe a lot of luck) to consistently choose the right funds and make the right trades. Undoubtedly there are people who have long track records of success and there are also those with long track records of failure, but some in the middle and the difficulty comes in backing the right horse at the right time and for the average investor it's simply not worth it.

    So in short, you have misinterpreted the results of research to draw conclusions that are not valid. As I had stated, it would be fairly easy to see if using historical performance data was a reliable way to pick funds. My experience suggests it is. Proper research would provide a more informative answer.

    Incidentally, my comments apply to funds outside of the US. The US is known to be a market where active funds do particularly poorly, and passive funds are perhaps the best choice.

    Given the historical lack of low cost index funds in the UK you last sentence has a ring of truth about it. There hasn't been much time or data to compare active vs passive in the UK, but with low cost tracker options now readily available I expect to see studies and that the results will mirror those of the US.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • badger09
    badger09 Posts: 11,184 Forumite
    First Post First Anniversary Name Dropper
    badger09,
    Thank you for the reply. I was considering adding another post to follow on from my earlier information. I thought some members may have been interested in my contact with Vanguard (email and telephone) since I transferred some funds. However, if it is the norm to ignore original topics, I shall refrain.
    Regards,
    Billy

    Please do add your further comments. I'm sure they will be useful & or interesting to other users considering this new offering from Vanguard.

    The point I was trying to make, is that it is impossible to stop posters wandering off topic. And sometimes, though not always:cool:, their wanderings can be as useful & or interesting as those which are strictly relevant to the opening post.

    That is the very nature of these fora:).
  • jamesd
    jamesd Posts: 26,103 Forumite
    Name Dropper First Post First Anniversary
    hennerz wrote: »
    Buying a tracker is saying "why take the risk of trying to pick a 1 in 10 fund manager that can beat the market? When anyone can pick a vast array of vanilla low cost trackers that will provide returns in line with the market.

    Calling the VGLS funds expensive is somewhat misleading as the funds suggested don't match any VGLS portfolio, nor do they auto-balance to the set asset allocation, doing this yourself costs time/money and can quickly eat away at any fee saving, your post didn't mention this.
    Anyone can pick say a tracker charging 1.5% a year. Or one charging 0.05% a year. The average tracker isn't cheap, it's sold to customers with limited choices, say because their pension has been picked by their employer. In just the same way as either of us is not going to pick a 1.5% tracker, I'm not going to pick a managed fund that's underperformed every year for decades.

    What we will both do is first eliminate the junk from consideration. That eliminates most of the trackers and most of the active funds and leaves a much better pool to select from. I don't care that 75% of the trackers or active funds are normally in the bottom 75% because I'm not going to buy them. Well, unless they are there because they are doing something that I want, like delivering low volatility or something else useful to me.

    The funds I pointed to can be used to build a DIY comparable set at about half the price of LifeStrategy, while also offering the opportunity to do a range of other useful things like varying sector or country weights if desired. If the other costs make sense it's a potentially useful way of saving a bit of money. Or they can be used to beat Vanguard's other funds handily, since they aren't usually cheapest.
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