Vanguard Life Strategy

mf78

Calfuray wrote: »

Hello!

I'm looking to tentatively dab my toes in the murky waters of investing, having read up on it. Like the bulk on this thread, I am looking at passive investment and the Vanguard LifeStrategy, at least to start with. Once I've had a bit of experience, I'd like to look at holding more funds and diversifying etc.

Just looking for a sanity check to make sure my idea makes sense:

I'm 23, so figure I should be looking at the 80% or 60% funds. I'm a little cautious and risk-averse, so thinking 60? But then I don't know if it'd be better to go for 80 due to age and fact that these are diverse and so risk is less...?
Right now I'm thinking of a S&S ISA, with regular deposits of £50 a month (to be upped when income increases).

Would I be right in thinking Charles Stanley Direct is a good place to do this? It looks like I have a platform fee of 0.25% and a TER of 0.32% - 0.57% in total (keeping in mind as investment increases that switching to a flat fee may be better).

Does this sound right/good, or is there another platform/plan you would suggest?

Any help much appreciated!

I'm doing pretty much the same, holding the 80% on with Charles Stanley Direct. Happy with their service and charges so far. My wife holds the 100% one with them too.

Gaaraz

GreenTricky wrote: »

According to this I should be off to Charles Stanley, not sure how up to date is it though and doesn't include HL as they refuse to provide data

http://www.comparefundplatforms.com/home

It's a real shame that HL aren't listed on this, nor does it look like they ever will be due to the refusal to send over data... makes it really difficult to see exactly what kind of savings each platform would offer

Calfuray

mf78 wrote: »

I'm doing pretty much the same, holding the 80% on with Charles Stanley Direct. Happy with their service and charges so far. My wife holds the 100% one with them too.

Thank you, that's good to know. Think I'm going to go for it!

mark88man wrote: »

80 is also more international

However, that decision should be measured against how soon you might need the money - the more exposed to equity the higher the likely volatility. if this is saving for a house in 5 years you might want to be more cautious than if this was your early retirement pot in which case I might even go for a worldwide 100% equity fund.

you need to be clear about this - its why an emergency cash like fund is recommended so that you don't need to dip into your investments when you hit problem (ie redundancy) which is likely to be when asset values are depressed

Oh, sorry for not being clear. We have a mortgage already, which we overpay, and an emergency fund of 6 months in cash already, this is just to see how to invest extra spare money for the long term. I don't know if I'm brave enough for 100% but I think I'll go with the 80% one. Thanks

JohnRo

Calfuray wrote: »

I don't know if I'm brave enough for 100% but I think I'll go with the 80% one. Thanks

There's an bit of irony to that, bond valuations are considered at particular risk from interest rate rises in the medium term. That said 20% bond exposure isn't going to do much damage.

This era of central bank experimentation and artificial manipulation of just about everything, to keep their private sector partners and the governments they control afloat, has many scratching their heads wondering which way is up. It's almost certainly going to end badly for someone and you can be sure that won't be the people running banks.

For the long term I'd personally favour 100% equities if bonds are the only other option and just accept the volatility for what it is and not worry what it does to the bottom line in the short term.

It's an amazing opportunity for you though, to be investing at your age.

Calfuray

JohnRo wrote: »

It's an amazing opportunity for you though, to be investing at your age.

It would be if I could figure out how to work the website!

smoulder

SnowMan wrote: »

Vanguard to lower charges on lifestrategy funds

Thanks for drawing attention to this. Cost reduction is always welcome, but I wonder if anyone knows more about the changes they are making to the asset allocation?

I guess a reduction in UK equity is on the cards, but it's curious they will be changing the asset allocation given that they describe these as "well-defined, static portfolios!"

le_loup

VLS80 looks very useful but, there seems to be a lot of overlap.
Developed World
Developed Europe
US Equity
Pacific
all seem to have a lot of the same stuff ... as you would expect.
So why would you want to buy 2 lots of Apple, 2 lots of Novartis, and so on?

Marazan

le_loup wrote: »

VLS80 looks very useful but, there seems to be a lot of overlap.
Developed World
Developed Europe
US Equity
Pacific
all seem to have a lot of the same stuff ... as you would expect.
So why would you want to buy 2 lots of Apple, 2 lots of Novartis, and so on?

They are trying to achieve their goal of regional asset allocation I imagine. They mix an match their big group funds rather than having to break down the whole allocation into dozens of smaller funds.

For a slightly different situation, I've got a LS 80% fund. If I wanted to got to 22% bond allocation I could either sell off MY entire LS80 and then rebuy the constituent parts but with slightly higher allocation of "UK Gov Bond Index Fund" or I could sell a tiny amount of LS80 and use that to buy a couple of percentage points of "UK Gov Bond Index Fund". I've duplicated what is already insde the LS80 (by buying the bond fund already held in the LS80) but I've managed to get to my target allocation of equities/bonds whilst keeping my holdings to just 2 funds.

le_loup

Yes, but.
Developed World, for example, will (does) already contain:
Developed Europe
Japan
US
But I take your point, so that, if I wanted a slightly higher income, I could hold the 80 and add a bit more via holdings of the UK Investment Grade Bond and UK Equity Income funds

block10

Archi_Bald wrote: »

HL is 0.45% platform plus 0.3%ish for the AMC, i.e. 0.75% at least. That's in an ISA - - I think SIPP figures will be different yet again, and HL might well still be cheaper overall for SIPPs. I haven't done the SIPP numbers yet though.

Ok so HL platform charge is 0.45% (Max £45 ISA or £200 on SIPP)
& Vanguard fund AER is 0.32%. Overall AMC = 0.77%

So in a £5k portfolio, CSD works out £9.50 cheaper.

Seems hardly worth the bother of switching, considering the exit fees and that in the long-term i will benefit from HL upper cap on platform fees (just £45 on ISA).