Query about Multi-Asset Fund Charges?

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  • Audaxer
    Audaxer Posts: 3,508 Forumite
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    chiang_mai wrote: »
    I disagree very strongly, it's all about context. The fund in question is below average risk when compared to other equity funds. Of course, if you compare it against savings bonds then it's ultra high super duper high risk! I think that understanding that risk (in context) is essential when selecting equity funds in order to help match your risk profile. And....average risk refers to an average of a group of similar fund types, again it's the context that's important. If you look at the risk rating of a particular fund for example on the FT site, that shows relative risk by comparison to other funds in the same class and demonstrates above and below average very well. https://markets.ft.com/data/funds/tearsheet/risk?s=IE00B3NS4D25:GBP
    The VLS100 might be average risk when compared to other 100% equity funds. However when people are looking to invest in a VLS fund they will be deciding which VLS fund to invest in based on their risk tolerance. If they looking for a medium risk VLS fund they might go for or be advised to go for the VLS60 (i.e. 60% equities) and if they are looking for high risk in the context of VLS funds they would probably go for the VLS100.
  • chiang_mai
    chiang_mai Posts: 156 Forumite
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    Audaxer wrote: »
    The VLS100 might be average risk when compared to other 100% equity funds. However when people are looking to invest in a VLS fund they will be deciding which VLS fund to invest in based on their risk tolerance. If they looking for a medium risk VLS fund they might go for or be advised to go for the VLS60 (i.e. 60% equities) and if they are looking for high risk in the context of VLS funds they would probably go for the VLS100.

    What you write suggests that investors have allegiance to particular brands because that same risk adjustment can be made by balancing asset types within a multi-fund portfolio. To just restrict choice to Vanguard alone is in itself a risk I would suggest.
  • bigadaj
    bigadaj Posts: 11,531 Forumite
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    chiang_mai wrote: »
    What you write suggests that investors have allegiance to particular brands because that same risk adjustment can be made by balancing asset types within a multi-fund portfolio. To just restrict choice to Vanguard alone is in itself a risk I would suggest.

    I think you're reading more into that than was intended, vanguard are popular because they are cheap and straightforward, but many other fund houses and providers are similar. Choice often comes down to nuances on how the funds are put together, minor differences in inclusions and exclusions, what their benchmark is etc

    There's a theoretical risk in having large sums with vanguard alone as the fscs limit is only £50k, but were vanguard to go bust the underlying equities would still be held by the investors, soemthing very unusual such as systemic fraud would have to exist for people to suffer significantly.
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