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  • FIRST POST
    • JSCB
    • By JSCB 8th Jan 18, 8:28 PM
    • 16Posts
    • 8Thanks
    JSCB
    Questions on Using Vanguard Life Strategy
    • #1
    • 8th Jan 18, 8:28 PM
    Questions on Using Vanguard Life Strategy 8th Jan 18 at 8:28 PM
    Hi everyone,

    I currently hold 5k in National Grid and 3k in Taylor Wimpy shares, which I plan to hold, however, going forward after being advised on this forum and reading a lot about it, I'm planning on holding back on any further individual share investments and push further into using funds instead.

    With a goal of having £15k in share by April, I have another 7k to go. However, my question is, is Vanguard Lifestrategy the best to pick?

    It seems the simplest, can be brought through vanguards own platform and I like how the range is split into the different blends of equities/bonds, meaning I could put some into a low equities, high bonds account, which is in theory more stable and secure over the shorter term, for any immediate needs which could come up.

    However, my questions are:

    1. Is vanguard a good investment? While it seems the most recommended for its simplicity and the most well known, I've also read that their Lifestrategy funds overly focus on the US market which is currently at record highs, meaning now would mean buying in at the top, not the best with your first investments and no others to average it out.

    Does this matter? Should I avoid vanguard altogether? Or if not, would you suggest adapting to it in some other way, using their other funds?

    2. Are their 20 or 40% funds, comprising more bonds and less equities actually more stable and secure? And if so, how?

    I've also read that since bonds have done well over previous years, that this has given a false sense of expectation for them and meant their values could fall going forward. Is this possible? Or could someone explain how the 20% is safer than the 80%?

    3. Finally, my plan would be to put 5k in the Lifestrategy 100 and 2k in the life strategy 20, and then to maintain this going forward, putting 8k pa into the Lifestrategy 100 and 2k pa into the Lifestrategy 20, planning not to touch what goes in for a long time if ever, but remaining some of it in a fairly secure fund to give me confidence and just in case. Does this sound right/a good match/a good idea?

    Thanks everyone, I'm pretty new to all this, love hearing your views and want to make sure I get it right before I start!

    Cheers,
    Joe
Page 1
    • oz0707
    • By oz0707 8th Jan 18, 9:11 PM
    • 506 Posts
    • 137 Thanks
    oz0707
    • #2
    • 8th Jan 18, 9:11 PM
    • #2
    • 8th Jan 18, 9:11 PM
    I think it's actually weighted to U.K. From what I've read. The reason for the large us holding is I think to do with market cap of equities there. Whereas U.K. Allocation is higher than the value.

    As for being near the top it depends on timespan and goal. Isn't the whole point of passive not to try time the market? I'm definitely no expert though
    • ValiantSon
    • By ValiantSon 8th Jan 18, 9:54 PM
    • 232 Posts
    • 220 Thanks
    ValiantSon
    • #3
    • 8th Jan 18, 9:54 PM
    • #3
    • 8th Jan 18, 9:54 PM
    1. Is vanguard a good investment? While it seems the most recommended for its simplicity and the most well known, I've also read that their Lifestrategy funds overly focus on the US market which is currently at record highs, meaning now would mean buying in at the top, not the best with your first investments and no others to average it out.

    Does this matter? Should I avoid vanguard altogether? Or if not, would you suggest adapting to it in some other way, using their other funds?
    Originally posted by JSCB
    I'm afraid no one can really answer the first part of your question. Only you (and time) can tell if it is a good investment. Unfortuantely, that's the nature of investing.

    However, LIfeStrategy funds are not overly focused on the US market. The allocation is proportionate to the relative size of the US stock market. It is overweighted towards the UK. Some will consider this a benefit, while others will disagree. I doubt you will get anything close to a consensus.

    There are lots of us who do use Vanguard LifeStrategy funds and lots who don't. Prepare to get no conclusive answer! If you like the diversity of aset allocation and the costs seem good then you are unlikely to be very disappointed, unless you expect it to outperform the market as it is designed deliberately not to do so, but rather to track it, delivering average returns.

    2. Are their 20 or 40% funds, comprising more bonds and less equities actually more stable and secure? And if so, how?
    Originally posted by JSCB
    Sort of. A higher proportion of bonds in a pportfolio should help to mitigate against downturns in the equities markets, so in theory this reduces the risk. No guarantees can be given, however. In the event of a market downturn you should expect to smaller proportional losses with VLS 20 or 40 than with the higher equity funds, but you should also expect to see smaller returns as the markets rise and, long term, the overal growth of your investment will almost certainly be lower than if in VLS 60, 80 or 100.

    I've also read that since bonds have done well over previous years, that this has given a false sense of expectation for them and meant their values could fall going forward. Is this possible? Or could someone explain how the 20% is safer than the 80%?
    Originally posted by JSCB
    They might, but they might not. There really is no hard and fast way to say. Sorry.

    3. Finally, my plan would be to put 5k in the Lifestrategy 100 and 2k in the life strategy 20, and then to maintain this going forward, putting 8k pa into the Lifestrategy 100 and 2k pa into the Lifestrategy 20, planning not to touch what goes in for a long time if ever, but remaining some of it in a fairly secure fund to give me confidence and just in case. Does this sound right/a good match/a good idea?[/QUOTE]

    I'm not sure what proportion of bonds and equities you hope to achieve doing this. Do you have a proportion in mind.

    Also note that you may well want to reduce the risk in your portfolio over time, so that could mean changing the funds invested in. e.g. someone who is 20 may decide to invest in VLS80. At 30 they may decide to reduce risk a little and split their investment between VLS80 and VLS60 (to give a 70% equity weighting). At 40 they may decide to move everything to VLS60. At 50 to split the funds between VLS60 and VLS40. At 60 put them all in VLS40 etc. The purpose of doing this is to reduce risk as you approach retirement. It is only a rule of thumb, however, and many people may choose to buck this trend at diferent times, so many people may still hold VLS80 at 40 and not reduce at all until 60, when they switch to VLS60, perhaps. The whole point is that is all depends upin you attitude to risk.

    Thanks everyone, I'm pretty new to all this, love hearing your views and want to make sure I get it right before I start!

    Cheers,
    Joe
    Originally posted by JSCB
    I'm not sure how old you are, but if you are in your 20s to mid 30s, then at t this stage I might consider putting the investent in VLS80 and then reviewing i tin 10 years.
    • Eco Miser
    • By Eco Miser 9th Jan 18, 4:02 AM
    • 3,324 Posts
    • 3,089 Thanks
    Eco Miser
    • #4
    • 9th Jan 18, 4:02 AM
    • #4
    • 9th Jan 18, 4:02 AM
    1. Is vanguard a good investment? While it seems the most recommended for its simplicity and the most well known, I've also read that their Lifestrategy funds overly focus on the US market which is currently at record highs, meaning now would mean buying in at the top, not the best with your first investments and no others to average it out.
    Originally posted by JSCB
    Any fund allocating regions by market cap will have a large exposure to the US. VLS deliberately overweights the UK, so will actually be underweight in the US.

    Being at a record high does NOT mean being at the top. This could be the lowest the index ever goes from now on. In a world without volatility, each day would see a new record high, and also a lower value than any future one. The real world has volatility, so there will be dips, but the expectation is there will be a long-term rise. Of course, a twenty year bear run could start tomorrow, no-one knows.

    2. Are their 20 or 40% funds, comprising more bonds and less equities actually more stable and secure? And if so, how?

    I've also read that since bonds have done well over previous years, that this has given a false sense of expectation for them and meant their values could fall going forward. Is this possible? Or could someone explain how the 20% is safer than the 80%?
    Originally posted by JSCB
    Bond funds are less volatile, perhaps losing 10% where an equity funds would lose 50%. Same sort of proportions for gains.

    Bond values will fall as interest rates rise because bonds pay a fixed interest (the coupon), so buyers will only be willing to pay enough to get the same yield as the new interest rate.

    3. Finally, my plan would be to put 5k in the Lifestrategy 100 and 2k in the life strategy 20, and then to maintain this going forward, putting 8k pa into the Lifestrategy 100 and 2k pa into the Lifestrategy 20, planning not to touch what goes in for a long time if ever, but remaining some of it in a fairly secure fund to give me confidence and just in case. Does this sound right/a good match/a good idea?
    Originally posted by JSCB
    5k in the 100 and 2k in the 20 means 5400 in equities and 1600 in bonds and is equivalent to 7k in a theoretical VLS77.
    8k pa into the 100 and 2k pa into the 20 means 8400 in equities and 1600 in bonds and is equivalent to 10k in a theoretical VLS84.

    Perhaps just put it all in VLS80?
    Eco Miser
    Saving money for well over half a century
    • JSCB
    • By JSCB 10th Jan 18, 8:31 PM
    • 16 Posts
    • 8 Thanks
    JSCB
    • #5
    • 10th Jan 18, 8:31 PM
    • #5
    • 10th Jan 18, 8:31 PM
    Thank you ValiantSon & EcoMiser for your in-depth replies!

    I'm 21 and looking to invest what I can afford (whilst also saving some cash reserves and into a lifetime isa for a first home too) with no planned need to withdraw it. I work a lot and earn quite well for my age and am happy to put away without expecting to touch it again for 15-20years when I plan to retire early, so I guess you could say I'm a long term investor and a higher risk fund would suit me fine.

    However, my idea behind putting a small percentage of my annual investments, say 20% to begin with and reducing further in future years, into something like a VLS40 is so that if I did need some immediate, unplanned cash for whatever reason in the next 10 years outside of what I have saved or can save quickly from earnings, I could access the small pot placed into the supposedly less volatile VLS40, with hopefully no or less losses than if I had it all fully invested in a VLS100 fund and had to withdraw from that during a dip period.

    While I'm in a good position for my age and want to start now to benefit from cost averaging and compound interest, I'm also conscious that my adult life is only just beginning and still pretty volatile itself and I don't want to corner myself completely just yet incase things change in such a way I can't predict. As my life becomes better planned out and my low risk pot built up enough, I'd put all new investments into something like the VLS80 or 100 until I were older and wanted to reduce my risk again for retirement as ValiantSon suggested.

    Does that make sense or am I over complicating things?

    Also, you both mentioned and suggested the VLS80, is there a reason for this over the VLS100? Is the 100 much more risky? In for a penny, in for a pound and all that?

    And on another note, do people invest only in VLS funds or is it better to diversify by using funds from different providers as well?

    Thanks again for your really helpful replies!
    • dunstonh
    • By dunstonh 10th Jan 18, 8:48 PM
    • 90,431 Posts
    • 57,213 Thanks
    dunstonh
    • #6
    • 10th Jan 18, 8:48 PM
    • #6
    • 10th Jan 18, 8:48 PM
    do people invest only in VLS funds or is it better to diversify by using funds from different providers as well?
    The whole point of using multi-asset funds is that someone else is doing it for you based on a proper strategy. Mixing your multi-asset funds up has merit but if you start introducing single sector funds then you may as well go fully single sector as it would be cheaper (but not necessarily better).

    Also, you both mentioned and suggested the VLS80, is there a reason for this over the VLS100?
    VLS100 is not that attractive an option as it sits with other global equity funds which offer better value.

    VLS80 does reduce the typical short term loss potential. I you are quite happy accepting a 50% loss in value (i.e. £10,000 in April statement and £5,000 in October statement) then you may as well go 100% equity.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • ValiantSon
    • By ValiantSon 10th Jan 18, 9:05 PM
    • 232 Posts
    • 220 Thanks
    ValiantSon
    • #7
    • 10th Jan 18, 9:05 PM
    • #7
    • 10th Jan 18, 9:05 PM
    Thank you ValiantSon & EcoMiser for your in-depth replies!
    Originally posted by JSCB
    Always glad to help in whatever small way that I can. EcoMiser (and several other posters) also offer some excellent ideas and food for thought, so you are in the right place to get some input.

    I'm 21 and looking to invest what I can afford (whilst also saving some cash reserves and into a lifetime isa for a first home too) with no planned need to withdraw it. I work a lot and earn quite well for my age and am happy to put away without expecting to touch it again for 15-20years when I plan to retire early, so I guess you could say I'm a long term investor and a higher risk fund would suit me fine.

    However, my idea behind putting a small percentage of my annual investments, say 20% to begin with and reducing further in future years, into something like a VLS40 is so that if I did need some immediate, unplanned cash for whatever reason in the next 10 years outside of what I have saved or can save quickly from earnings, I could access the small pot placed into the supposedly less volatile VLS40, with hopefully no or less losses than if I had it all fully invested in a VLS100 fund and had to withdraw from that during a dip period.
    Originally posted by JSCB
    To be honest, if you are thinking about a fund to cover unexpected costs then you are better keeping that proportion of your portfolio as cash. It is always a good idea to have a reserve of cash on hand. Many people would advise around six months of expediture as a figure to aim for. I'm a little more cautious and would suggest six months of expenditure (to account for potential periods out of work) and a separate pot to cover bg ticket items like new cars or boilers. My suggestion, therefore, would be to split your savings and investments between cash and VLS, rather than trying to hedge our bets with VLS40. You could easily find that when you most needed it the VLS40 was at a low point due to turns of the market.

    Build up the cash fund using a combination of the best paying current accounts, regular savers and easy access savings accounts to maximise the interest. This does need a bit of management, but is not that difficult as long as your are methodical about doing it.

    While I'm in a good position for my age and want to start now to benefit from cost averaging and compound interest, I'm also conscious that my adult life is only just beginning and still pretty volatile itself and I don't want to corner myself completely just yet incase things change in such a way I can't predict. As my life becomes better planned out and my low risk pot built up enough, I'd put all new investments into something like the VLS80 or 100 until I were older and wanted to reduce my risk again for retirement as ValiantSon suggested.

    Does that make sense or am I over complicating things?
    Originally posted by JSCB
    No, I don't think you are overcomplicating in principle. I think you show a healthy attitude towards risk (i.e. that taking some is needed to get reasonable returns, but that taking too much may bite you at a later date). I would suggest, however, keeping the "rainy day" money as cash. Cash will always be there and maximising the interest paid (as outlined above) will minimise the erosion of value due to inflation. With careful management of your cash you can probably keep pace with inflation at its current level.

    Also, you both mentioned and suggested the VLS80, is there a reason for this over the VLS100? Is the 100 much more risky? In for a penny, in for a pound and all that?
    Originally posted by JSCB
    I'm almost double your age so my attitude to risk is different. That will affect how I see things, but equally that atitude is partly the result of life experiences that have highlighted the volatility that you may experience over the next twenty years (and more). So any thoughts I have on which funds to use are coloured by this.

    Equally, however, I am taking a view of the stock market at present and speculating that it may see a downturn in the next year or two. If it does then VLS100 will experience a greater fall in value than VLS80, so my view is that VLS80 may be a better bet and that, when the recovery starts (which it will), the 80% equity will be well placed to ensure significant growth once again. At your age, I think you are well-positioned to ride out the dips through a VLS80 investment (and potentially VLS100, but I just don't like the idea of holding everything in equities - a bit too "aggressive" for me).

    I suggested VLS80 because a good rule of thumb is to hold around your age in bonds In other words, you might look to hold 20% bonds at your current age, but increase that at 30 to 30% bonds, and so on. This is only a rule of thumb, however, and you might decide to hold VLS80 throughout your thirties and only re-balance at 40 by moving to VLS60 (or possibly go for the 70% equities then by combining VLS80 and VLS60 in equal proportions). It really does come down to your attitude to risk at the end of the day, and your appreciation of the potential for losses, combined with your willingness and ability to ride the rough periods out. (This is one of the reasons why I suggest holding cash rather than VLS40 as a fund for potential use due to unexpected costs).

    And on another note, do people invest only in VLS funds or is it better to diversify by using funds from different providers as well?
    Originally posted by JSCB
    Different people take different approaches, but, personally, I consider a fund like Vanguard LifeStrategy to be suitable to hold as a single investment because it is well diversified across asset classes and geography. You need to remember that in reality it is actually a basket of lots of different funds, so you actually would be investing in several different funds, but all under one banner.

    If you do go down the Vanguard route then be aware that the cheapest way of holding those funds (at least for the first few years) is by using Vanguard's own platform, which only charges 0.15% platform fee (and no other fees). You'd want to review this every 12 months, but to start with it would definitely be the cheapest option.
    Last edited by ValiantSon; 10-01-2018 at 9:09 PM. Reason: Typo
    • JSCB
    • By JSCB 10th Jan 18, 10:15 PM
    • 16 Posts
    • 8 Thanks
    JSCB
    • #8
    • 10th Jan 18, 10:15 PM
    • #8
    • 10th Jan 18, 10:15 PM
    Hi ValiantSon,

    Lots to consider again, thanks for taking the time and I'll make sure I bookmark the thread to read through it all again in future.

    With regards to keeping 'rainy day' money as cash, I'm already doing that and using various current accounts and monthly savers, as you suggest. In fact, I'm predicting by April this year I'll have 10.5k in cash, on top of my 8k in the lifetime ISA and 15k in shares, and by April next year, have increased this to 13k in cash, even with putting a further 4k into the lifetime to 12k, 10k into shares up to 25k and a final 6k to pay off my student loan.

    With this in mind, it's not that I'm suggesting putting all of my rainy day money into the markets, but rather would like to spread my risk, having holdings with low risk and volatility e.g. cash in high interest current accounts which I'll probably need, holdings with higher risk and potential for long term returns, e.g. investments into VLS80/100 and individual shares which I won't plan to touch for 15 years+, and a small buffer zone in the middle just in case, e.g. my thinking being a lower equities fund. However, I guess like you say, even the VLS40 funds could show large volatility if I did ever come to need the cash.

    Would you therefore suggest reducing my planned share investments to 8k per year and increase the cash reserves further as I will be in need of a change of car in a few years and possible other expenses when eventually getting a first home, or putting the entire 10k into the VLS80 as apposed to my previously suggested 8k into a VLS80 and 2k into a VLS20/40?

    With regards to your advice on the VLS80 over the 100, from what you say and what else I've read, perhaps that little less volatility with the 80 would be better for me, since as a new investor, although I'm expecting it to happen and then rebound, those initial losses are I know going to be a hard kick to deal with and ignore at first.

    Thanks again,
    Joe
    Last edited by JSCB; 10-01-2018 at 10:26 PM.
    • ValiantSon
    • By ValiantSon 10th Jan 18, 10:51 PM
    • 232 Posts
    • 220 Thanks
    ValiantSon
    • #9
    • 10th Jan 18, 10:51 PM
    • #9
    • 10th Jan 18, 10:51 PM
    Hi ValiantSon,

    Lots to consider again, thanks for taking the time and I'll make sure I bookmark the thread to read through it all again in future.

    With regards to keeping 'rainy day' money as cash, I'm already doing that and using various current accounts and monthly savers, as you suggest. In fact, I'm predicting by April this year I'll have 10.5k in cash, on top of my 8k in the lifetime ISA and 15k in shares, and by April next year, have increased this to 13k in cash, even with putting a further 4k into the lifetime to 12k, 10k into shares up to 25k and a final 6k to pay off my student loan.
    Originally posted by JSCB
    Glad to hear you've got a decent cash fund available already. £10, 500 is a pretty respectable sum and should easily cover you if the worst happens and you lose your job. It is unlikely that you would be out of work for as long as six months, so there is plenty there.

    With this in mind, it's not that I'm suggesting putting all of my rainy day money into the markets, but rather would like to spread my risk, having holdings with low risk and volatility e.g. cash in high interest current accounts which I'll probably need, holdings with higher risk and potential for long term returns, e.g. investments into VLS80/100 and individual shares which I won't plan to touch for 15 years+, and a small buffer zone in the middle just in case, e.g. my thinking being a lower equities fund. However, I guess like you say, even the VLS40 funds could show large volatility if I did ever come to need the cash.

    Would you therefore suggest reducing my planned share investments to 8k per year and increase the cash reserves further as I will be in need of a change of car in a few years and possible other expenses when eventually getting a first home, or putting the entire 10k into the VLS80 as apposed to my previously suggested 8k into a VLS80 and 2k into a VLS20/40?
    Originally posted by JSCB
    I think what you propose with splitting the £10,000 between investments and cash savings is quite sensible. As I say, I'm fairly cautious and tend towards ensuring that my cash reserves are enough not only to cover me for six months (plus) out of work, but also cover potential big ticket items. I'm fortunate to have never needed to call on the money due to unemployment, but I have had to buy new cars and boilers! (I would always avoid buying a new car with finance - dreadul waste of money - and I would always buy nearly new, i.e. 12-18 months old to avoid the massive depreciation in the first year).

    If you did split the money as you suggest then in five years time you would have £10,000 for those big ticket items and could start putting all of the money into your S&S ISA. However, you may decide that putting it all in now is what you want to go for. As I've said, these are just suggestions for consideration.

    At £8,000 a year, particularly at your age, you would be looking at realising a very healthy return later in life. Keep in mind also that you may well see increases in your income over that time and could put more into your investments in quite a short timeframe.

    With regards to your advice on the VLS80 over the 100, from what you say and what else I've read, perhaps that little less volatility with the 80 would be better for me, since as a new investor, although I'm expecting it to happen and then rebound, those initial losses are I know going to be a hard kick to deal with and ignore at first.

    Thanks again,
    Joe
    Originally posted by JSCB
    It has to be your choice. I think 100% equities is a touch too much, really, and as dunstonh says, there are possibly better options available for 100% equities funds. So, if I were you then I would go for the VLS80 for the next ten years and then review. Do try to keep strong through any downturn though and don't sell! Doing so would turn a paper loss into a real one.

    Best wishes.
    • Eco Miser
    • By Eco Miser 11th Jan 18, 9:53 AM
    • 3,324 Posts
    • 3,089 Thanks
    Eco Miser
    Thank you ValiantSon & EcoMiser for your in-depth replies!
    Originally posted by JSCB
    Happy to help.
    However, my idea behind putting a small percentage of my annual investments, say 20% to begin with and reducing further in future years, into something like a VLS40 is so that if I did need some immediate, unplanned cash for whatever reason in the next 10 years outside of what I have saved or can save quickly from earnings, I could access the small pot placed into the supposedly less volatile VLS40, with hopefully no or less losses than if I had it all fully invested in a VLS100 fund and had to withdraw from that during a dip period.
    Originally posted by JSCB
    That does make sense, given you've also got substantial cash holdings, so you would only need this if several emergencies came along at once.
    While I'm in a good position for my age and want to start now to benefit from cost averaging and compound interest, I'm also conscious that my adult life is only just beginning and still pretty volatile itself and I don't want to corner myself completely just yet incase things change in such a way I can't predict. As my life becomes better planned out and my low risk pot built up enough, I'd put all new investments into something like the VLS80 or 100 until I were older and wanted to reduce my risk again for retirement as ValiantSon suggested.

    Does that make sense or am I over complicating things?
    Originally posted by JSCB
    It makes sense. I was over 30 when I started investing, and my life had just taken an unpredicted twist (nationalized industry - formerly job for life - started closing whole works, and laying thousands off, including me). All subsequent planning, if any, has been on the basis that employment may terminate any time.
    Also, you both mentioned and suggested the VLS80, is there a reason for this over the VLS100? Is the 100 much more risky? In for a penny, in for a pound and all that?
    Originally posted by JSCB
    The main reason I mentioned VLS80 is that it was similar in total to your two fund suggestion.
    Eco Miser
    Saving money for well over half a century
    • badger09
    • By badger09 11th Jan 18, 12:56 PM
    • 5,597 Posts
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    badger09
    OP

    Apologies if I've missed it, but I don't see any discussion about pension provision. Have you considered this?

    The benefit would probably be free money from your employer, plus the bonus of tax relief.

    I'm not suggesting all your savings should go into your pension, but some almost certainly should.
    • Cactus_Jack
    • By Cactus_Jack 12th Jan 18, 1:18 AM
    • 559 Posts
    • 75 Thanks
    Cactus_Jack
    Any fund allocating regions by market cap will have a large exposure to the US. VLS deliberately overweights the UK, so will actually be underweight in the US.
    Originally posted by Eco Miser
    I'm happy with my LifeStrategy 100% investment but this is the one thing that bothers me. I would much rather be overweight in US equities and dial back the UK equities to a level that better reflects the size of the UK stock market.

    Does anyone know what I can do to rectify this?
    • Audaxer
    • By Audaxer 12th Jan 18, 8:35 AM
    • 797 Posts
    • 405 Thanks
    Audaxer
    I'm happy with my LifeStrategy 100% investment but this is the one thing that bothers me. I would much rather be overweight in US equities and dial back the UK equities to a level that better reflects the size of the UK stock market.

    Does anyone know what I can do to rectify this?
    Originally posted by Cactus_Jack
    Have a look at the HSBC Global Strategy range of funds which like VLS are also funds of mainly passive indexes. They have more US equities and much less UK equities to reflect the size of world markets.
    • dunstonh
    • By dunstonh 12th Jan 18, 10:04 AM
    • 90,431 Posts
    • 57,213 Thanks
    dunstonh
    I'm happy with my LifeStrategy 100% investment but this is the one thing that bothers me. I would much rather be overweight in US equities and dial back the UK equities to a level that better reflects the size of the UK stock market.

    Does anyone know what I can do to rectify this?
    Originally posted by Cactus_Jack
    Use a different fund that achieves your investment wishes. At the moment, you are compromising.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • TheTracker
    • By TheTracker 12th Jan 18, 10:15 AM
    • 1,181 Posts
    • 1,159 Thanks
    TheTracker
    I'm happy with my LifeStrategy 100% investment but this is the one thing that bothers me. I would much rather be overweight in US equities and dial back the UK equities to a level that better reflects the size of the UK stock market.

    Does anyone know what I can do to rectify this?
    Originally posted by Cactus_Jack
    You could use a different multi-asset fund with a different allocation strategy, though the other aspects of the alternate allocation strategy might raise other concerns to you.

    Or you could add a Developed World ex-UK tracker in the proportion you wished to adjust the home bias. of course, you'd then need consider dialling down from VLS80 to VLS60 eg as you'd be upping your equities. That said, you might like that granular equity setting. And you'd need to rebalance yourself. So, not a straightforward option, and at this point you might fall into a category of investor that builds their own portfolio of trackers, but to do that you need to make decisions about such an allocation and have enough heft to warrant any additional trading costs. But you did ask what you could do ...
    • yorkiebar
    • By yorkiebar 12th Jan 18, 6:44 PM
    • 725 Posts
    • 232 Thanks
    yorkiebar
    Consider VWRL for a more diversified portfolio.
    • bostonerimus
    • By bostonerimus 12th Jan 18, 6:59 PM
    • 1,424 Posts
    • 842 Thanks
    bostonerimus
    I'm happy with my LifeStrategy 100% investment but this is the one thing that bothers me. I would much rather be overweight in US equities and dial back the UK equities to a level that better reflects the size of the UK stock market.

    Does anyone know what I can do to rectify this?
    Originally posted by Cactus_Jack
    You should only be investing money in funds that you don't expect to use for 10, 20 or 30 years. If you think you'll need the money before that stick with saving products that guarantee your principal and give you easy access to your money.

    If you don't like the VLS weighting then look at some different multi-asset funds or just buy a global equity index like VWRL and something like Vanguard Global Bond Index in the ratio you want.
    Misanthrope in search of similar for mutual loathing
    • JSCB
    • By JSCB 13th Jan 18, 10:12 PM
    • 16 Posts
    • 8 Thanks
    JSCB
    OP

    Apologies if I've missed it, but I don't see any discussion about pension provision. Have you considered this?

    The benefit would probably be free money from your employer, plus the bonus of tax relief.

    I'm not suggesting all your savings should go into your pension, but some almost certainly should.
    Originally posted by badger09
    Hi Badger09,

    Thanks for responding! Didn't mention pensions in this thread at all having kind of already settled on it through discussion on another.

    While I don't have much interest in pensions right now, as I'm already juggling work plans for the future, paying off my student loan, starting in shares, saving for a deposit in a Lifetime ISA etc. and pensions feel a bit distant, it was brought to my attention in the other threads I've read and discussed it on that achieving financial independence young is easier knowing you're already secure for after you retire at 60+, and therefore I do still see the importance of considering them.

    With both that and my current commitments in mind, I was thinking that once I'd saved up for and used the Lifetime ISA for a first home in a few years, I could from then carry on putting the same £4k per year away that I am now into the lifetime ISA still or a SIPP.

    Since I'm not a million miles away from the higher rate tax bracket either, if a good year comes where I go over (since I'm self-employed and each week, month, year varies), I'll open a SIPP and put the excess into it on top as well.

    Does this sound like a credible plan to you or any changes you'd suggest to consider?

    Would be starting at around age 23 with 4k plus bonus, so 5k per year put into Lifetime or SIPP on basic rate bonus, approx 12.5% of annual income, plus any excess into a SIPP over the higher rate for the odd year here or there.

    This is all of course completely separate to any share investments made (as was being discussed above) which is to go towards gaining early FI and not traditional retirement at post 60.
    • badger09
    • By badger09 14th Jan 18, 3:26 PM
    • 5,597 Posts
    • 5,039 Thanks
    badger09
    JSCB

    I've just had a quick read through your other threads and am impressed by your attitude to money, savings, investment etc at 21. Hope that doesn't sound patronising

    I see you are considering pensions, which is what I thought was missing from this thread.

    Your plan to continue using LISA after house purchase makes sense, up to age 50. Paying excess earnings (over BR tax) into a SIPP is obviously a no brainer. Any other investments you can make before age 50 would probably be better in a normal S&S ISA for additional flexibility.

    Good luck on your journey to FI
    • JSCB
    • By JSCB 14th Jan 18, 9:07 PM
    • 16 Posts
    • 8 Thanks
    JSCB
    Badger09,

    Not patronising at all, quite nice to know really as sometimes I wonder whether my thoughts and views are even a bit over the top for my age!

    Thanks for your opinions and advice!
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