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  • FIRST POST
    • lucyonline
    • By lucyonline 18th May 15, 11:03 AM
    • 23Posts
    • 3Thanks
    lucyonline
    Nutmeg, Vanguard Lifestrategy or Ready-Made Portfolio?
    • #1
    • 18th May 15, 11:03 AM
    Nutmeg, Vanguard Lifestrategy or Ready-Made Portfolio? 18th May 15 at 11:03 AM
    Hi all

    Complete newbie to investing here and was very much hoping for some of your expert advice.

    I have always been a bit nervous of the stock market but have always used my full Cash ISA allowance. I'm feeling a bit braver now and would like to put this year's ISA allowance of £15,240 into a Fund in a Stocks and Shares ISA. I already have the money in savings so am ready to transfer. Before I do, a few questions:

    1. I am clueless and don't have the time or understanding to research and choose between individual funds. I have been looking at Nutmeg who seem to do all the work for you (great for me) but on the forums people seem to say that you can do better than Nutmeg for a lower fee and better returns. One of the suggestions that comes up a lot is the Vanguard Lifestrategy range (I'd probably go 40 or 60), but that means buying an individual fund rather than a portfolio and I wasn't sure if it's better to diversify. Then there are the Ready-made fund portfolios offered by BestInvest or HL or whoever, which are more expensive than Vanguard but a little cheaper than Nutmeg but not actively managed which I think would mean that every so often I would need to sit down and assess and make decisions about whether or not to move my money which I'm not qualified to do!

    So the question is, for a complete clueless person who wants to pretty much just put the money somewhere and leave it and have it do better than it would in Savings/Cash ISA, what would be the best option?

    2. Once a decision has been made, is it better to then buy the thing in one big go (to maximise the use of the money that is currently sitting in savings) or drip feed to avoid buying when the market is high?

    Thank you so much for your time.
Page 1
    • InvestInPoker
    • By InvestInPoker 18th May 15, 12:08 PM
    • 1,335 Posts
    • 2,652 Thanks
    InvestInPoker
    • #2
    • 18th May 15, 12:08 PM
    • #2
    • 18th May 15, 12:08 PM
    So the question is, for a complete clueless person who wants to pretty much just put the money somewhere and leave it and have it do better than it would in Savings/Cash ISA, what would be the best option?
    Originally posted by lucyonline

    I am not qualified to advise you what would be the best for you but I can say that in my opinion vanguards lifestrategy range sounds good for your situation. They are premade ready to go portfolios you access via one fund. They hold a range of vanguard funds inside them to make up the equities/bonds exposure that you choose. The equities are globally diversified albeit without some things you might want to add on the side like smaller companies, property, more in emerging markets etc. Can I ask how long you would be looking to leave this money in the stock market for? If you are going to invest in this stuff you should ideally not be needing this money at all any time in the near future. Can you tell us what your risk tolerance would be? Being honest would you be able to stomach a 20% drop in your money without getting upset? How about seeing your fund holding half in value?


    2. Once a decision has been made, is it better to then buy the thing in one big go (to maximise the use of the money that is currently sitting in savings) or drip feed to avoid buying when the market is high?
    It is a risk reward thing. Decide on your risk tolerance and time frame above first then consider this. The argument against drip feeding would be the more time your money is in the market the more money it (should) be worth at the end so on average you would be better off just dumping it all in as a lump sum. However this significantly increases the volatility you will encounter as like you say you could get unlucky and put it all in on day 1 just to see massive drops happen on day 2. Drip feeding would avoid that.


    The other thing to consider is what fund platform you will be using for your purchase. Some charge fixed fees, some charge a small % of your total holding etc. Some have great customer service, are easy to deal with and have fast dealing with good websites. Others are spartan with less emphasis on customer service. Have a look here http://www.comparefundplatforms.com/ and ask about ones you consider on this forum.
    • lucyonline
    • By lucyonline 18th May 15, 2:12 PM
    • 23 Posts
    • 3 Thanks
    lucyonline
    • #3
    • 18th May 15, 2:12 PM
    • #3
    • 18th May 15, 2:12 PM
    Thanks InvestinPoker. To answer your questions, I'm looking at this as a medium-to-long term thing, it might even end up being my pension but equally if I need the money for a big purchase (I'm thinking house renovation or round-the-world trip) I might remove it sooner. I'm 36. I would like to see it grow significantly better than it would in savings or cash but I'm pretty cautious generally in life so I wouldn't like to see it go down if that can be avoided! I had an investment fund once before, but after 9/11 it tanked and never really recovered. In that case I would have been better off leaving the money in savings. Don't really want that to happen again though I know there's always a risk.
    • InvestInPoker
    • By InvestInPoker 18th May 15, 2:51 PM
    • 1,335 Posts
    • 2,652 Thanks
    InvestInPoker
    • #4
    • 18th May 15, 2:51 PM
    • #4
    • 18th May 15, 2:51 PM
    I'm looking at this as a medium-to-long term thing, it might even end up being my pension but equally if I need the money for a big purchase (I'm thinking house renovation or round-the-world trip) I might remove it sooner. I'm 36. I would like to see it grow significantly better than it would in savings or cash but I'm pretty cautious generally in life so I wouldn't like to see it go down if that can be avoided!
    Originally posted by lucyonline
    Got you, well if you want "significantly better" returns than savings accounts (or the current accounts promoted here which give some quite good rates of interest risk free) then you will have to take on some level of risk. It is only with the risk that you can get the reward of "significant" returns above inflation over the long term which you seek. However you can choose a level of risk that suits you, and you probably want to look into the lower level of equities variants (40 or 60) of the lifestrategy funds. Perhaps put the money for the expensive holiday/work on the house into high return current accounts and put some more locked away for the long term into one of the VLS versions. You wont be able to avoid seeing it go down at some point unless you just don't look for 25 years, its never a straight line up with investing.
    • BLB53
    • By BLB53 18th May 15, 3:03 PM
    • 1,128 Posts
    • 906 Thanks
    BLB53
    • #5
    • 18th May 15, 3:03 PM
    • #5
    • 18th May 15, 3:03 PM
    So the question is, for a complete clueless person who wants to pretty much just put the money somewhere and leave it and have it do better than it would in Savings/Cash ISA, what would be the best option?
    The Vanguard LS is a sort of fund of funds - it holds a diverse blend of the Vanguard stand alone funds all in one wrapper.

    I believe it is a great choice - I hold it in my own portfolio - low cost, balanced, globally diversified and auto rebalance.

    Cheapest broker would possibly be Charles Stanley direct 0.25% p.a. so £38 charges for your first year.

    Equities offer the better chance of higher return over the longer periods so maybe LS60 or you can always get one of each - LS60 and LS40 to produce 50:50 balance between equities and bonds.

    Good luck with it!
    • enthusiasticsaver
    • By enthusiasticsaver 18th May 15, 3:48 PM
    • 4,431 Posts
    • 8,242 Thanks
    enthusiasticsaver
    • #6
    • 18th May 15, 3:48 PM
    • #6
    • 18th May 15, 3:48 PM
    I am a novice investor and have just gone for the Vanguard LS60 as like you I do not feel qualified to make investment decisions. I have recently taken the plunge and made the decision to not only invest the £1k per month in this tax year into a Stocks and shares isa (only investing in the Vanguard LS60) but have also just transferred my large cash isa with around £36k into the same fund. That way I do not have to worry about whether it is balanced or not.
    Countdown to early retirement on 21.12.17 2 months to go.
    • coyrls
    • By coyrls 18th May 15, 4:09 PM
    • 889 Posts
    • 925 Thanks
    coyrls
    • #7
    • 18th May 15, 4:09 PM
    • #7
    • 18th May 15, 4:09 PM
    In my opinion, given your positon and the choice of:

    1) Nutmeg
    2) Vanguard LS
    3) A "ready made" portfolio that you would need to rebalance

    I would go for 2, in a low cost S&S ISA Wrapper. Which is low cost for you will depend on the sums involved. Check out the spreadsheet that you can download from the Langcat blog here: http://langcatfinancial.co.uk/recent-purrings/
  • archived user
    • #8
    • 18th May 15, 6:36 PM
    • #8
    • 18th May 15, 6:36 PM
    Legal and general multi index funds are another option, similar to vanguard life strategy funds but the fund managers have a semi active role and decide overall spread of assets. However it is made up of trackers and still has low charges.
    • BLB53
    • By BLB53 18th May 15, 7:28 PM
    • 1,128 Posts
    • 906 Thanks
    BLB53
    • #9
    • 18th May 15, 7:28 PM
    • #9
    • 18th May 15, 7:28 PM
    fund managers have a semi active role and decide overall spread of assets
    Arguably, this could be a reason to avoid - fund managers do not have a great track record of making consistently good calls...
    • rinnin
    • By rinnin 22nd Jan 17, 10:45 AM
    • 7 Posts
    • 0 Thanks
    rinnin
    Apologies if this is a silly question but I've had a look at Nutmeg site and I cant find a list of funds such as the Vanguard LS. So is Nutmeg not a particularly good platform (despite its flashy website) if you want to specify your own funds?

    (Also got burned years ago putting my savings into telecoms and banking shares tanking and realise the future isn't looking particularly good for me with everything in cash. Planning to setup & drip feet into a S&S ISA due to the crazy market highs at the moment and uncertainty re: Trump & Brexit )

    Thanks in advance
    • dunstonh
    • By dunstonh 22nd Jan 17, 11:03 AM
    • 89,852 Posts
    • 55,456 Thanks
    dunstonh
    Apologies if this is a silly question but I've had a look at Nutmeg site and I cant find a list of funds such as the Vanguard LS.
    You wont. Nutmeg is not an investment platform.

    So is Nutmeg not a particularly good platform (despite its flashy website) if you want to specify your own funds?
    As it is not a platform and does not claim to be a platform, then it is not unsurprising that it is not a very good platform!
    • Linton
    • By Linton 22nd Jan 17, 11:16 AM
    • 8,351 Posts
    • 8,246 Thanks
    Linton
    The whole purpose of Nutmeg is to set up a portfolio for you that matches a set of simple (some might well say simplistic) requirements to a portfolio. Its a bit pointless if you want to over-ride Nutmeg's choices with some fund that your happened to think might be a good idea as this may well invalidate the whole portfolio.

    If you want to choose your own funds use a platform designed for this such as the DIY ones such as HL, iii, etc etc.

    If you want someone else to choose a set of funds that meets your specific requirements consult an IFA. However unless you have a significant amount of money in your pot, say £50K+, this may well not be economical.

    Your next choice is to choose, at least whilst your portfolio is small, one fund that provides a reasonably broad coverage of the total investment market. The VLS funds are often quoted. Barring global catastrophes after which your investments will be the least of your problems you will never lose everything investing in such funds. Technically it can be argued that the VLS funds are not the best at their job, but if your pot is small which broad fund you choose probably doesnt matter very much. Choosing a VLS fund is very much better than.....

    The worst thing you can do, except for educational purposes, is to buy a random set of funds and shares perhaps on the basis of friend's suggestions, tips in the press or what you thought seemed a great idea at the time. Going down this route could lose all your money, or at least a very large fraction of it.
    • Pincher
    • By Pincher 22nd Jan 17, 12:04 PM
    • 6,516 Posts
    • 2,491 Thanks
    Pincher
    1. I am clueless and don't have the time or understanding to research and choose between individual funds.

    So the question is, for a complete clueless person who wants to pretty much just put the money somewhere and leave it and have it do better than it would in Savings/Cash ISA, what would be the best option?

    2. Once a decision has been made, is it better to then buy the thing in one big go (to maximise the use of the money that is currently sitting in savings) or drip feed to avoid buying when the market is high?
    Originally posted by lucyonline
    All classic "I need a new boiler but I don't want to know the details" thinking. From dealing with my mother and sister all my life, I now understand the best thing to do is to find a man who for god knows what reason will dutifully do all the chores and look after the details for you. Even better, marry a rich man who will exploit subcontractors and not pay them, like Donald Trump.

    Either you roll up your sleeves and get involved, and pay attention, or you can start with a rock solid company like Equitable Life, and end up with mush, like Equitable Life. Vanguard appears to be the elixir of life, and really hot with everybody, but just remember that's what people thought endowment policies were. You were supposed to pay off your mortgage, and still have a big lump sum when you retire. Look at Volkswagen, rock solid ,or rotten to the core? Toyota is beginning to feel dodgy, so does Samsung.

    You either know what is going on, or somebody you trust knows what is going on, AND KEEP AN EYE ON THINGS.

    With investment, there is no buy it and leave it.
    • matt1983
    • By matt1983 19th Mar 17, 7:02 PM
    • 7 Posts
    • 3 Thanks
    matt1983
    Ive been educatinf myself on investing over the last month or so and have set up a stocks and shares ISA via HL. I have the following:

    Legal and General International Index Trust Accumulation

    Vanguard Lifestrategy 20% equity accumulation

    Vanguard lifestrategy 40% equity acc

    Vanguard lifestrategy 60% equity acc

    Vanguard lifestrategy 80% equity acc

    Vanguard lifestrategy 100% equity acc

    My money is more or less spread equally between these 6.

    Some questions i have:

    Are these good choices? Have read so many recommendations for the Vanguards in particular, so seemed like a good idea to spread my money between all 5 risk categories, but . . .

    Does it make sense to do this or is it pointless? Is there something im missing and have made an amateur mistake?

    Any advice would be really welcome as im now considering what to do in April with my next ISA allocation.

    Thanks in advance.
    • justme111
    • By justme111 19th Mar 17, 7:25 PM
    • 2,822 Posts
    • 2,712 Thanks
    justme111
    (20+40+60+80+100): 5=60 (%)
    You may as well just chose vanguard 60 as that what the result of your choice is. Unless you interested to see how those 5 perform in different economic circumstances for educational purposes( then if you are you may as well search the info online but may be more illustrative on your own money) and do not have to pay additionally for having 5 funds instead of 1.
    • masonic
    • By masonic 19th Mar 17, 7:26 PM
    • 9,126 Posts
    • 6,273 Thanks
    masonic
    Are these good choices? Have read so many recommendations for the Vanguards in particular, so seemed like a good idea to spread my money between all 5 risk categories, but . . .

    Does it make sense to do this or is it pointless? Is there something im missing and have made an amateur mistake?
    Originally posted by matt1983
    Why on earth would you do this? What are you trying to achieve? It seems like some more education is needed (maybe you could start here). You should be able to reduce this mixture to one fund.
    • masonic
    • By masonic 19th Mar 17, 7:27 PM
    • 9,126 Posts
    • 6,273 Thanks
    masonic
    ...and do not have to pay additionally for having 5 funds instead of 1.
    Originally posted by justme111
    There won't be any difference in cost if held at HL, but it just makes things unnecessarily complex.
    • Savings Dave
    • By Savings Dave 19th Mar 17, 7:32 PM
    • 70 Posts
    • 64 Thanks
    Savings Dave
    Ive been educatinf myself on investing over the last month or so and have set up a stocks and shares ISA via HL. I have the following:

    Legal and General International Index Trust Accumulation

    Vanguard Lifestrategy 20% equity accumulation

    Vanguard lifestrategy 40% equity acc

    Vanguard lifestrategy 60% equity acc

    Vanguard lifestrategy 80% equity acc

    Vanguard lifestrategy 100% equity acc

    My money is more or less spread equally between these 6.

    Some questions i have:

    Are these good choices? Have read so many recommendations for the Vanguards in particular, so seemed like a good idea to spread my money between all 5 risk categories, but . . .

    Does it make sense to do this or is it pointless? Is there something im missing and have made an amateur mistake?

    Any advice would be really welcome as im now considering what to do in April with my next ISA allocation.

    Thanks in advance.
    Originally posted by matt1983
    As already mentioned having all these funds is going against the purpose of the individual allocation (there is a hint in their names).

    Each of the Vanguard funds has a different % mix of equities and bonds depending on your attitude to risk/return and time frame. You should only require one Vanguard LS fund. Bonds and equities perform differently over time.
    Last edited by Savings Dave; 19-03-2017 at 7:36 PM.

    • dunstonh
    • By dunstonh 19th Mar 17, 7:56 PM
    • 89,852 Posts
    • 55,456 Thanks
    dunstonh
    One of the funniest mix of funds I have seen.
    • jdw2000
    • By jdw2000 19th Mar 17, 8:00 PM
    • 415 Posts
    • 109 Thanks
    jdw2000
    Ive been educatinf myself on investing over the last month or so and have set up a stocks and shares ISA via HL. I have the following:

    Legal and General International Index Trust Accumulation

    Vanguard Lifestrategy 20% equity accumulation

    Vanguard lifestrategy 40% equity acc

    Vanguard lifestrategy 60% equity acc

    Vanguard lifestrategy 80% equity acc

    Vanguard lifestrategy 100% equity acc

    My money is more or less spread equally between these 6.

    Some questions i have:

    Are these good choices? Have read so many recommendations for the Vanguards in particular, so seemed like a good idea to spread my money between all 5 risk categories, but . . .

    Does it make sense to do this or is it pointless? Is there something im missing and have made an amateur mistake?

    Any advice would be really welcome as im now considering what to do in April with my next ISA allocation.

    Thanks in advance.
    Originally posted by matt1983
    Spreading your money evenly between those Vanguard products is exactly the same as putting it all into Vanguard 60%.


    HOWEVER: What you need to id decide which level of risk you are happy with. VLS60 is considered middle of the road. But if you are risk averse and prone to having a heart attack if there is a stock market crash, then you may wish to consider VLS20 or VLS40.
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