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Results: Are you currently invested with Vanguard Life Strategy

Yes

47.23% • 307 votes

No

16.62% • 108 votes

No, but I would like to at some point

30.15% • 196 votes

There are better options than Vanguard

6.00% • 39 votes

You may not vote on this poll

650 votes in total.

  • FIRST POST
    • Carpi09
    • By Carpi09 15th Jan 13, 6:37 PM
    • 293Posts
    • 262Thanks
    Carpi09
    Vanguard Life Strategy
    • #1
    • 15th Jan 13, 6:37 PM
    Vanguard Life Strategy 15th Jan 13 at 6:37 PM
    Hello all,

    This thread was created to talk about the Vanguard Life Strategy fund which includes the 20/40/60/80 & 100. Please tell us what you think about the VLS and how you believe it would act as a core within a portfolio.

    Please be aware that investments can go up as well as down so unless you are planning to invest for several years, I don't recommend investing with S&S. From what I know and have researched the ideal time scales each of the LS funds are as follows:

    20: 3-5 years +
    40: 5 years +
    60: 5 years +
    80: 5-8 years +
    100: 10 years +

    These may well not be accurate and are a rough guide. Please be aware, if you are close to retirement or thinking about closing a fund, think about your risk attitude and what you can do in order to lessen the chance of a great fall.

    You can also suggest other funds outside Vanguard that would work well with the VLS in order to evaluate the balance of the portfolio.

    About me, Im 23 and planning early for my future. I intend to hold this fund for 20 years plus so fluctuations are bound to happen. Heavy drops will not effect me because i know values fall aswell as rise. I dont want to fall in to the trap that most people do which is to buy high and sell low because they panic.

    Currently I hold the Vanguard Life Strategy 80% with Hargreaves Lansdown and plan to put 50% of the ISA allowance into it each year. The other 50% will be put into a Cash ISA because I am saving up for a house deposit. Come April, I will be looking at adding other funds because I want more than just a passive approach and while I am still young, I would like to take the risk for greater gains.

    From all the research I have done, the VLS fund is perfect for a beginner because it does everything for you. Depending how the market is doing, it does the rebalancing for you. Having researched for around a month now and taking opinions from people on this board, I believe I have developed knowledge allowing me to move on a little and look for other funds to support the VLS fund. I still believe I am a beginner and will not rush into anything without researching and planning first.

    Please comment, suggest, discuss this fund and what experience you have had this far. Hopefully this thread will give confidence to people who were in the position I was, brand new to S&S and not a clue what anything meant. Taking the time to do a little research will not only improve confidence but improve knowledge too!

    I am sure there are plenty of books to read but one I have read recently is by Tim Hale called Smarter Investing. It is a great read and gives you all the information you need to start investing.

    Good luck!

    This opening post has been edited to give a tad more information and why this thread was created. All replies from other members from the start has been fantastic so thank you.

    MSE Insert:

    If you're new to saving for retirement read our Pension need-to-knows
    Last edited by MSE Andrea; 26-01-2016 at 9:40 AM. Reason: Improve opening post.
Page 78
    • renova
    • By renova 6th Sep 17, 8:04 AM
    • 3 Posts
    • 0 Thanks
    renova
    Thanks that does make sense, but with 100% and if you know you need the money at the +30 year point for certain (but not before), are you not hugely exposed after 25 years or so if things take a down turn? Does it not make sense to dial down the risk over time at all? Or should you just remain exposed to maximum potential equity gain for the duration?
    • Audaxer
    • By Audaxer 6th Sep 17, 8:38 AM
    • 574 Posts
    • 252 Thanks
    Audaxer
    Thanks that does make sense, but with 100% and if you know you need the money at the +30 year point for certain (but not before), are you not hugely exposed after 25 years or so if things take a down turn? Does it not make sense to dial down the risk over time at all? Or should you just remain exposed to maximum potential equity gain for the duration?
    Originally posted by renova
    I would agree it makes sense to reduce the risk over time if you start with 100% equities. If after 25 years your pot had built up to £500k and then there was a 50% equity crash reducing it to £250k, I don't think many people would be too happy with that outcome.
    • aroominyork
    • By aroominyork 14th Sep 17, 5:28 PM
    • 279 Posts
    • 62 Thanks
    aroominyork
    However VLS100 does not truly reflect global capitalisation whereas something like HSBC FTSE All-World Index Fund or Fidelity Index World does and they historically produce higher returns.
    Originally posted by A_T
    Except they don't truly reflect global market cap. According to Bloomberg in Oct 2016, USA market cap was $23.8tr and the world's was $65.6tr, so USA had a 36.3% share. Yet HSBC is 46.9% USA, Fildelity is 53.0% USA, VLS100 is 40.3% USA. Surely there's no such thing as a fund that truly reflects global cap - it's just a matter of which way you like your fund skewed.
    • grey gym sock
    • By grey gym sock 14th Sep 17, 6:26 PM
    • 4,131 Posts
    • 3,643 Thanks
    grey gym sock
    Except they don't truly reflect global market cap. According to Bloomberg in Oct 2016, USA market cap was $23.8tr and the world's was $65.6tr, so USA had a 36.3% share.
    Originally posted by aroominyork
    i'd guess that those figures are just the raw market caps, not allowing for

    1) markets where there are restriction on foreign ownership of shares - e.g. 'A' shares in china (though those are becoming more accessible) - which indexes usually exclude (because the index is supposed to be something it's practical to invest in)

    2) large blocks of shares held by a single shareholder, which indexes typically exclude when weighting a company's shares (i.e. they give the shares a weight in the index based on the "free float", which excludes those large shareholdings)

    both those factors are generally more significant in emerging markets, hence indexes will scale down those markets compared to their raw market cap, and hence the USA becomes larger in relative terms. which is all perfectly sensible, to make the indexes "investible".

    though of course you can argue the "true" market caps are the raw ones, not the ones adjusted for investibility.

    Yet HSBC is 46.9% USA, Fildelity is 53.0% USA, VLS100 is 40.3% USA. Surely there's no such thing as a fund that truly reflects global cap - it's just a matter of which way you like your fund skewed.
    perhaps that's a little harsh.

    VLS100 is deliberately overweighting the UK, so it's not trying to truly reflect global market cap.

    those HSBC and fidelity funds have no deliberate overweighting. the main difference between the 2 funds is that the fidelity fund is developed world only, the HSBC fund is both developed and emerging. to fit in emerging markets, HSBC have to hold less in developed markets, hence you'd expect them to hold a bit less in the USA than fidelity do.

    so i'd say that the HSBC and fidelity funds are both truer reflections of global market cap than is VLS100. and the HSBC fund is a truer reflection than the fidelity fund (unless you don't like investing in emerging markets).
    • aroominyork
    • By aroominyork 14th Sep 17, 6:52 PM
    • 279 Posts
    • 62 Thanks
    aroominyork
    I gladly bow to your greater knowledge, grey gym. You need to drill deep to understand that HSBC includes emerging markets since its top ten holdings are Apple, Microsoft, Facebook, Amazon, J&J, ExxonMobil, JP Morgan, Google, Alphabet, Wells Fargo.
    Last edited by aroominyork; 14-09-2017 at 7:17 PM.
    • ColdIron
    • By ColdIron 14th Sep 17, 7:35 PM
    • 3,575 Posts
    • 4,285 Thanks
    ColdIron
    No deep drilling required, it tracks the FTSE All-World Index. The opening paragraph in its factsheet says The index covers Developed and Emerging markets. You shouldn't rely on the top 10 holdings as it says nothing about the 3,080 other holdings
    • A_T
    • By A_T 14th Sep 17, 7:43 PM
    • 223 Posts
    • 112 Thanks
    A_T
    Here in the UK the Vanguard FTSE Global All Cap Index Fund is probably the most accurate reflection we have of the global stock market.
    • grey gym sock
    • By grey gym sock 14th Sep 17, 9:11 PM
    • 4,131 Posts
    • 3,643 Thanks
    grey gym sock
    Here in the UK the Vanguard FTSE Global All Cap Index Fund is probably the most accurate reflection we have of the global stock market.
    Originally posted by A_T
    i would agree. the FTSE global all cap index covers large, medium and small caps companies, in both developed and emerging markets. compared to the FTSE all-world index, the only difference is that the latter doesn't have the small-cap companies.
    • Murmansk
    • By Murmansk 15th Sep 17, 9:22 PM
    • 51 Posts
    • 14 Thanks
    Murmansk
    I'm no expert on this stuff but as fairly recent messages on this thread were asking which platform to use to invest in Vanguard LifeStrategy I can tell you that you can buy direct from Vanguard now - I think this has only been possible since earlier this year.
    • Linton
    • By Linton 16th Sep 17, 5:56 PM
    • 8,496 Posts
    • 8,445 Thanks
    Linton
    i would agree. the FTSE global all cap index covers large, medium and small caps companies, in both developed and emerging markets. compared to the FTSE all-world index, the only difference is that the latter doesn't have the small-cap companies.
    Originally posted by grey gym sock
    Interesting that the geographic asset allocation is significantly different to that of other global index funds with only 51% US, higher "financials" and lower "technology". The China allocation is notable by its continued omission in any reasonable % (Less than 2.3%). I wonder what the true index would look like. Perhaps we will see a mass migration of tracker investments as we get nearer to being able to invest in it.
    • A_T
    • By A_T 16th Sep 17, 7:00 PM
    • 223 Posts
    • 112 Thanks
    A_T
    Interesting that the geographic asset allocation is significantly different to that of other global index funds with only 51% US, higher "financials" and lower "technology". The China allocation is notable by its continued omission in any reasonable % (Less than 2.3%). I wonder what the true index would look like. Perhaps we will see a mass migration of tracker investments as we get nearer to being able to invest in it.
    Originally posted by Linton
    The FTSE All World and Global All Cap include emerging markets which are often omitted in other global indexes
    • grey gym sock
    • By grey gym sock 16th Sep 17, 9:30 PM
    • 4,131 Posts
    • 3,643 Thanks
    grey gym sock
    The China allocation is notable by its continued omission in any reasonable % (Less than 2.3%).
    Originally posted by Linton
    this will be partly down to chinese 'A' shares being excluded because they are not fully accessible to foreign shareholders. their accessibility is gradually being increased, and i think index providers are moving towards including them in indexes, but presumably FTSE haven't got there yet.

    perhaps also because chinese 'N' shares (quoted in the US, with returns supposedly linked to a separate operating company in china, and incorporated in some third country), have very contrived legal structures, and may fail to qualify for inclusion in indices for any 1 country, and hence also be omitted from global indices.

    there are certainly interesting issues when index providers have to make decisions about what to include, and big changes may be required in the composition of an index.
    • A_T
    • By A_T 16th Sep 17, 10:35 PM
    • 223 Posts
    • 112 Thanks
    A_T
    MSCI say they will include China's mainland domestic shares in it's EM index from next year.
    • bigadaj
    • By bigadaj 23rd Sep 17, 8:50 PM
    • 10,708 Posts
    • 7,002 Thanks
    bigadaj
    MSCI say they will include China's mainland domestic shares in it's EM index from next year.
    Originally posted by A_T
    Is there something wrong with this thread?
    • Alexland
    • By Alexland 23rd Sep 17, 9:21 PM
    • 680 Posts
    • 427 Thanks
    Alexland
    No it's that people keep voting and bumping it to the top.
    • frenchplonka
    • By frenchplonka 24th Sep 17, 8:44 PM
    • 263 Posts
    • 63 Thanks
    frenchplonka
    just a quick question I have recently put in a order to monthly drip 150 into a LVS80 im in my mid 30's which would be better the 80 or a better option
    Sealed Pot Challenge 10 - #571
    • Alexland
    • By Alexland 24th Sep 17, 10:37 PM
    • 680 Posts
    • 427 Thanks
    Alexland
    Depends on your appetite for volatility in search of potentially greater rewards. I assume this is a long term investment 10 years+

    If you are going to be spooked if you investment drops 45% and takes a few years to recover during which time you sell out at a loss (as you fear you might loose everything or regret you decision to buy the fund) then use a fund with less equity exposure as VLS80 would be a very bad choice for you.

    If you are saving for retirement and have the perspective to understand that after a big drop things are highly likely to get better (and while things are low you remain happy as you are buying more fund units with your monthly contribution and maybe even try to add a lump sum while units are cheap) then VLS80 might be good for you.

    Alex
    Last edited by Alexland; 24-09-2017 at 10:42 PM.
    • bowlhead99
    • By bowlhead99 24th Sep 17, 10:38 PM
    • 6,896 Posts
    • 12,406 Thanks
    bowlhead99
    just a quick question I have recently put in a order to monthly drip 150 into a LVS80 im in my mid 30's which would be better the 80 or a better option
    Originally posted by frenchplonka
    There were 1555 posts on this thread before yours. Did you read them?

    If you did, you'd find there is no short answer to "what is the best VLS fund for my needs, note I'm not going to tell you what my needs actually are, or when I'll went to spend the proceeds, just know that I'm in mid 30s and have a guess thanks."

    IMHO if you're not going to be spending the money for several decades and are not going to panic and sell it when it temporarily drops to 50% off its high - the VLS80 will be fine. For other circumstances you may prefer another solution.

    You could search this thread for other comments I've made in the past, which you might find more useful - there are 60+ of my posts as the thread is several years old after all.
    • frenchplonka
    • By frenchplonka 25th Sep 17, 8:21 AM
    • 263 Posts
    • 63 Thanks
    frenchplonka
    Ignore my question i forgot to paste in the other fund mentioned
    Sealed Pot Challenge 10 - #571
    • frenchplonka
    • By frenchplonka 25th Sep 17, 8:23 AM
    • 263 Posts
    • 63 Thanks
    frenchplonka
    My question SHOULD have been given a 20+ time frame with a lad who doesnt really worry about a fund tasnking which in people opinion should provide a better return over the long term VLS OR Vanguard FTSE Global All Cap Index Fund and what is the difference between the VLS and Vanguard FTSE Global All Cap Index Fund
    Sealed Pot Challenge 10 - #571
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