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Vanguard Life Strategy Funds

bigsy
bigsy Posts: 178 Forumite
Part of the Furniture Combo Breaker
in Savings & investments
I see Vanguard UK have launched a range of blended index funds, mixing fixed income securities with 20-100% exposure to equities through their underlying index funds.

https://www.vanguard.co.uk/uk/portal/Funds/funds-and-documents.jsp#

AMC/TER varies for each fund but is in the range of 0.3% and there is also a dilution fee, again approx. 0.3%.

As an example, breakdown of the underlying funds in the 'LifeStrategy 60% Equity Fund' is:

UK Government Bond Index 18.6%
UK Investment Grade Bond Index 13.3%
UK Inflation-linked Gilt Index 8.1%
UK Equity Index 21%
FTSE Developed World ex-UK Index 33.6%
Emerging Markets Stock Index 5.4%

I assume these will be available via Alliance Trust Savings. While the AMCs are higher than in the underlying funds, this could be offset by just needing a single monthly £1.50 purchase on ATS if making regular contributions. What do others think?
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Comments

  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    The range looks like a good idea, both for investors who like trackers and for vanguard, who might get more money in by making it easier to meet minimum purchase sizes.

    I'm not keen on the gilt and investment grade bond percentages in that specific fund because the prices for those assets are at uncomfortably high levels, suggesting lots of scope for subsequent drops. I'd personally prefer one of the higher equity options plus say a physical commercial property fund and a strategic bond funds with those other holdings used to hit the equity-non-equity target split.
  • Reaper
    Reaper Posts: 7,359 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    An excellent idea. While the contents don't match what I currently want to invest in I applaud Vanguard who are doing a good job of shaking up an industry where charges have been getting out of hand.
  • bigsy
    bigsy Posts: 178 Forumite
    Part of the Furniture Combo Breaker
    There's more detail on these at the Motley Fool website:

    http://www.fool.co.uk/news/investing/2011/06/24/asset-allocation-made-simple.aspx
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Hmm, one bad thing mentioned at the fool site, that "the mix is constantly re-balanced". That'll limit the gains to be had from rebalancing less frequently, after there's been some time for values to diverge.
  • Reaper
    Reaper Posts: 7,359 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    The Sunday Times mentions these and also mentions Schroder Dynamic Multi-Asset fund, with a TER capped at 0.5%. It aims to return CPI inflation + 4% after all fees. According to their press release (PDF) it will be available in August.

    The Sunday Times also points out how the average management charge on equity funds was 1.36% in 2000, and had risen to 1.49% last year.
  • RobStaffs
    RobStaffs Posts: 308 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    edited 27 June 2011 at 7:25AM
    Reaper wrote: »
    The Sunday Times mentions these and also mentions Schroder Dynamic Multi-Asset fund, with a TER capped at 0.5%. It aims to return CPI inflation + 4% after all fees. According to their press release (PDF) it will be available in August.

    The Sunday Times also points out how the average management charge on equity funds was 1.36% in 2000, and had risen to 1.49% last year.

    I think will be going for this.I will be investing via H_L is an ISA wrapper though.However I cant see these type of funds listed anywhere.Could anyone point me in their direction please ?
  • RobStaffs
    RobStaffs Posts: 308 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    RobStaffs wrote: »
    I think will be going for this.I will be investing via H_L is an ISA wrapper though.However I cant see these type of funds listed anywhere.Could anyone point me in their direction please ?[/QUOTE

    Could anyone assist?
  • le_loup
    le_loup Posts: 4,047 Forumite
    H-L don't carry them. Could be that there is not enough kickback!
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    HL equate listing them on the site with promoting them if we can believe the FT reporting. If you phone HL I expect that you'll be able to hold them with their telephone dealing service and by paying a 0.5% capped at £200 a year charge. That'll probably make it more expensive than other places.
  • MarcoM
    MarcoM Posts: 809 Forumite
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    An old post but still relevant as I would like to know where I can buy these funds online. I will be investing a lump sum in an ISA wrapper.

    Thanks
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