Why doesn't everyone just buy Vanguard LifeStrategy?
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chucknorris wrote: »I quite like VHYL, as it is quite diverse, both geographically and in sector, and it obviously pays a decent dividend. I did intend to significantly (I mean just my shares, which are only about 26% of my portfolio) invest in VHYL but I went for the FTSE 100 instead (although that in reality is only about 12.5% of my portfolio).
I try to minimise my exposure to that index due to it's mediocre performance compared to a world index.0 -
I can see the benefits in investing to the Vanguard LifeStrategy funds, however I chose not to. The main reason is that I take a lot of interest in my investments and so I want to have control and oversight of it. I find it interesting and fun, plus it gives me the opportunity to learn. This is something that Vanguard LS either does not offer or is significantly lower (less interesting, not as fun etc).
I do work in investment management so that probably separates me from many other private investors, but I understand that different peope have different requirements and preferences and hence some prefer the simple Vanguard LS route and others prefer to manage their portfolio themselves. Im very much in the latter."If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” Warren Buffett
Save £12k in 2021 - #027 £15,268 (76%)0 -
chucknorris wrote: »I quite like VHYL, as it is quite diverse, both geographically and in sector, and it obviously pays a decent dividend. I did intend to significantly (I mean just my shares, which are only about 26% of my portfolio) invest in VHYL but I went for the FTSE 100 instead (although that in reality is only about 12.5% of my portfolio). The problem (nice one to have though) is that although I would like to switch to VHYL it is going to take quite a few years to avoid paying CGT, but in the meantime I am getting great dividend income.0
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For my modest portfolio, holding it all in VLS 80 would probably be a reasonable choice. However, that isn't what I'm doing. Holding a selection of different funds that invest in different sectors allows me to get a clearer picture of what is going on in the world and understand the impact of events on the investment landscape. Also, I enjoy making up my own alllocations in different areas and thinking about what to buy next month.0
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To put this question into context and as an analogy, ask yourself this question;
"Why doesn't everyone just buy package holidays?"
A lot of the answers to that question will be the same for the Vanguard LS question."If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” Warren Buffett
Save £12k in 2021 - #027 £15,268 (76%)0 -
I use VLS20 as my "go to" bond vehicle. It has a hugely diverse array of UK and global corporate and government bonds. Then I just choose my equity indexes to go alongside it.0
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Not necessarily. I need income of ~4% p.a. and agreed the natural yield on my VLS 60 is only around 1.5% however the average return for the fund over the past 6 years is ~10% per year.
The solution for me is to sell 4% of my fund at the same point every year to provide my 'income'. I have a 10% cash buffer to draw on when there may be one or two years when there is a bear market as I would feel uncomfortable selling units which had gone down in value.
So long as the average return is 4% or above, this can provide my income requirements indefinitely.
I have started an income portfolio which should pay dividends of just under 4% per annum, but long term there should be some capital growth as well.
I've also got a couple of VLS funds (currently VLS40 and 60) which may or may not be able to provide a similar level of total return. It will be interesting to compare against the income portfolio over time.0 -
One of VLS weaknesses is their spread of bonds covering the bond allocation. I would be more inclined to use L&GMI at the lower end of the risk scale than VLS.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
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aroominyork wrote: »Can you expand on this please, dunstonh? What is the VLS weakness about?
Look at the spread at the fixed interest between the two. Then look at the areas of fixed interest that are doing well and badly (not down to picking but just where we are at this time in the cycle). VLS doesnt invest in the spread required to pick up some of those areas beyond their general catchall funds. L&G will use more focused funds to increase weightings in the various areas.
Broadly speaking, when you look at the comparative funds for risk, you generally find VLS is better with equities and L&GMI is better at fixed interest. If you compare various periods when bonds are stronger than equities or vice versa, you can see the differences.
Hence, if you are looking to use a multi-asset fund for fixed interest, the L&GMI would be a better option. (although I wouldnt use either for that).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
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