Vanguard Life Strategy

takesyourchances

Just to add a bit more from a simplicity point, if the above was a sensible pension direction and fee considering on 15K transfer to a possible SIPP a single Lifestrat fund could be run, or start off the 15K with 2 funds.

A third could be added at a later stage / year as the pot grows ie: Asia Pacific for example. It wouldn't need done all at once, if fees was a factor but the strategy was correct.

Just wanted to add that in as well to consider fees on the amount.

Best regards.

bowlhead99

I think a lifestrategy is fine as a core holding as it gives you exposure to all the major equity markets. I still wouldn't have it as the only thing in my pension though. And adding a second global largecap equity tracker to reduce the UK weighting a bit is not really changing the type of things you're invested in. You noticed that both UK and US markets are at historic highs and the economies have low projected growth rates at the moment?

The current fee structure at H-L of paying a flat fee for every vanguard or HSBC index fund held, makes the lifestrat relatively more efficient than building your own portfolio out of trackers. However many other funds don't currently have those monthly fees, you are just exposed to management fees on a percentage basis, so it's perfectly possible to put 5-10k in the lifestrat and 10-5k spread across three or four or five other funds, or ETFs or investment trusts for that matter.

You don't need to think of smallcap funds, emerging market funds, real estate, high yield bonds etc etc as being luxuries that you should only do once you have a big pot. Instead focus on investing in the areas you want and worry about the fees when they get more noticeable on a bigger pot. That doesn't sound very M.S.E. but the difference in returns between funds, whether up or down, will have a greater influence on your fledgling portfolio and will dwarf the fees whether they are 0.5% or 1.5%.

Don't be put off if a fund you want isn't available with your chosen provider. Find a fund which does the same job or find a different provider.

If you don't know how to split your portfolio do some further reading - books, internet research, 'what do you think of my portfolio' threads here, sample portfolios on fund supermarket's website etc. At the end of the day you shouldn't base your retirement plans on some hot tip fund from these forums or a blog or marketing material, but it does help you understand more about what's out there.

If that means it's a bit longer before you make the decision, it doesn't matter too much - you might be alive 70 years from now and have plenty of time to earn the money you'll be spending in your final days.

takesyourchances

bowlhead99 wrote: »

I think a lifestrategy is fine as a core holding as it gives you exposure to all the major equity markets. I still wouldn't have it as the only thing in my pension though. And adding a second global largecap equity tracker to reduce the UK weighting a bit is not really changing the type of things you're invested in. You noticed that both UK and US markets are at historic highs and the economies have low projected growth rates at the moment?

The current fee structure at H-L of paying a flat fee for every vanguard or HSBC index fund held, makes the lifestrat relatively more efficient than building your own portfolio out of trackers. However many other funds don't currently have those monthly fees, you are just exposed to management fees on a percentage basis, so it's perfectly possible to put 5-10k in the lifestrat and 10-5k spread across three or four or five other funds, or ETFs or investment trusts for that matter.

You don't need to think of smallcap funds, emerging market funds, real estate, high yield bonds etc etc as being luxuries that you should only do once you have a big pot. Instead focus on investing in the areas you want and worry about the fees when they get more noticeable on a bigger pot. That doesn't sound very M.S.E. but the difference in returns between funds, whether up or down, will have a greater influence on your fledgling portfolio and will dwarf the fees whether they are 0.5% or 1.5%.

Don't be put off if a fund you want isn't available with your chosen provider. Find a fund which does the same job or find a different provider.

If you don't know how to split your portfolio do some further reading - books, internet research, 'what do you think of my portfolio' threads here, sample portfolios on fund supermarket's website etc. At the end of the day you shouldn't base your retirement plans on some hot tip fund from these forums or a blog or marketing material, but it does help you understand more about what's out there.

If that means it's a bit longer before you make the decision, it doesn't matter too much - you might be alive 70 years from now and have plenty of time to earn the money you'll be spending in your final days.

Thank you again for the information and for taking the time to reply, I am now understanding more (I hope) what you have explained, the core of the Lifestrat seems to be fine for a diverse portfolio I feel as a main holding, I understand now that the second global large cap company tracker I mentioned is only changing some of the geographical locations and percentages held out of the UK, being more towards American core holding but the investment type as it is still large cap based so not really a diverse in that respect with the Lifestrat funds.

Yes now you have mentioned it the markets at the moment for the UK and USA are high, yet the growth projections in these countries are forecast to be low as well. Very good point.

I was also thinking that adding a more specific side fund / funds was something for bigger pots and getting a bit caught up in fees on smaller amounts rather than thinking what area of focus I would like, so thank you for pointing that out and explaining and that some other funds outside the Vanguard range are yearly percentage based rather than per month.

I have been having a look on HL, but also know there are other options as well if the funds are not on there that would be best.

At some point I might like to add a smaller holding still to my S&S ISA along with my Vanguard 60%, in these few days the penny has dropped on the Global Ex UK Large Cap being to similar to the Lifestrat in adding more exposure to Large Caps.

I don't want to jump in at anything to quick and very true about reading hot tips or blogs and forums and basing retirement plans on these I still have time and I do actively save and now invest in the S&S ISA which I am happy about, I would prefer to be at least having more of an idea of what I was doing more and will read up more on the net and books and look at more sample portfolios etc.

So maybe a more diverse selection (tweeking thoughts again) could be for a SIPP pension block or side running in the S&S ISA:

The Vanguard Lifestrat take the focus away from the developed world and add in an Asian and Pacific Ex Japan tracker as a focus area and I am thinking now go small cap on it.

I am thinking an emerging part of the world smaller companies maybe have the potential for greater long term growth here. An interesting fund I found for this is Aberdeen Global Asian Smaller Companies GBP D2 Accumulation (Maybe also a possibility for a future holding in my S&S ISA to diverse from the Lifestrat 60% here) the main countries being Singapore, Malaysia and Hong Kong, the last tracker I looked at I felt was to much Australian focus, I never had Australia in mind for this region as I more had Singapore etc in mind as being on the rise here. I have a friend working in business in Asia for a few years between these countries who tells me of the potential here in business, so that has been in the back of my mind for a while.

A quick question it says this fund Aberdeen Global Asian Smaller Companies GBP D2 Accumulation can be opened from a minimum £500 investment, if opened with £500 or higher are you then not committed to have to put the £50 a month min into it as the regular saving every month? ...asking this as if there was a few funds running, it could give the option to change the drip feeds around as felt required, maybe over a period you might want to direct more or less money into one area than another and so on to give that bit of flexibility.

Is that correct that you are not commitment to put £50 min in every single month if you open this fund on the minimum amount £500 plus?

As for more fund ideas, I think I would need to think about it more and learn more. There is options like property, Europe much more, I would not be sure at the moment.

I would be interested in any opinions on the Aberdeen Global Asian Smaller Companies GBP D2 Accumulation tracker and maybe as a possible side tracker diverse to the Lifestrat including the option of the 60% fund in my S&S ISA and if my thinking is improving following these excellent posts the past few days

In the meantime, I have ordered the Tim Hale Smarter Investing book, I have increased my direct debit to £250 into my S&S ISA for March to go into my Lifestrat 60% which will bring me to 3K invested in it so far and I will look more at my Halifax pension, may increase the payment while thinking out what to do with it etc rather than rush.

Many thanks.

Best regards.

JohnRo

What you're doing with smaller companies is increasing the risk and volatility (in theory) in the hope of higher rewards in the final analysis.

I suggested the Aberdeen fund to you but there are others, I have that one though and the emerging market smaller companies. They've both done quite well recently, but so has pretty much everything else equity related, which says nothing about future performance.

It's a risk I'm prepared to take with the money I've invested in them.

takesyourchances

JohnRo wrote: »

What you're doing with smaller companies is increasing the risk and volatility (in theory) in the hope of higher rewards in the final analysis.

I suggested the Aberdeen fund to you but there are others, I have that one though and the emerging market smaller companies. They've both done quite well recently, but so has pretty much everything else equity related, which says nothing about future performance.

It's a risk I'm prepared to take with the money I've invested in them.

Yes, agree this is adding risk and volatility in the hope of higher returns in the long term, say as part the S&S ISA, I would think if this was an idea to run it at a smaller percent of the pot size and drip feed.

Say I have 3K now in the Vanguard Lifestrat 60% (S&S ISA) and a new drip feed of £250, maybe open a more risky fund (diversifying) for the hope of higher returns like this Aberdeen Small Cap Asian fund with say £500 and allocate £50 or £75 drip feed out of say £250 to it and the rest to the Vanguard Lifestrat 60%.

Yes you mentioned the Aberdeen funds to me when I was looking a lot at Vanguard trackers, when looking at the Asian trackers this Aberdeen fund stood out when looking through them.

Roughly how much percentage of your pot are you running this same Aberdeen Asian small cap fund at and do you also have a Vanguard Lifestrat?

It has looked to have performed well recently and agree it will not tell us about the future, maybe a smaller allocation (£500 to start which I would be prepared to risk if the strategy made sense with the Vanguard 60%) into the Aberdeen Asian Small Cap with the Lifestrat as the main core could be a consideration.

Also I don't want to overload myself with trackers, I still want to keep it simple and passively invest but to understand things better and maybe add a little diversity to the core of my Lifestrat 60%.

I am going to slow peddle on the pension idea as this is a bigger sum and future time frame being locked, my S&S ISA is active now and learning me as I was feeling to cash based in cash isa's.

Thanks.

Best regards.

JohnRo

Linton

Small point: I dont think the Aberdeen Asian Small Cap is a tracker. Its a standard managed fund, and it looks a good one.

takesyourchances

Linton wrote: »

Small point: I dont think the Aberdeen Asian Small Cap is a tracker. Its a standard managed fund, and it looks a good one.

Thank you Linton on correcting me that the Aberdeen Asian Small Cap is a fund rather than a tracker and that it looks to be a good one, what would your opinion be on adding that as a smaller pot percentage as above with the Lifestrat 60% being the main?

Thank you also JohnRo for the above table.

Asia was in my mind but on a small holding long term and breaking up from large caps which I learnt here, interesting.

Best regards.

JohnRo

I'd say just go for it and see what happens personally, if you're really looking to diversify though that one fund won't really help much, won't hurt either of course.

It'll add flavour but imho if you really want to diversify then it requires significant chunks of your pot split between several regions and sectors on a global scale. That's one thing the lifestrategy funds don't really do well on their own as said up thread they do appear heavily large cap western oriented.. is that a pun?

takesyourchances

JohnRo wrote: »

I'd say just go for it and see what happens personally, if you're really looking to diversify though that one fund won't really help much, won't hurt either of course.

It'll add flavour but imho if you really want to diversify then it requires significant chunks of your pot split between several regions and sectors on a global scale. That's one thing the lifestrategy funds don't really do well on their own as said up thread they do appear heavily large cap western oriented.. is that a pun?

I have been thinking that myself here, to just go for it and run it and see what happens. I know it is not a complete full diversity set up with the Lifestrat, but would add a bit of flavour that is true and maybe another small step in that process.

I could start to add more overall diversity when the pot increases and run away with the Lifestrat 60% and this Asian Small Cap Fund on the side, I would like to reach a next goal of overall 10k invested in the S&S and can research and read up during this.

I am thinking £500 lump to open, am I right in that I do not need to put £50 min drip feed in every month to the Aberdeen Asian Small Cap Fund after that? .....I would drip feed, but just like to know that that option is there should I want to change drip feed amounts around or reduce a drip feed for a period should a circumstance crop up type thing.

I have more than my 2013 cash ISA allowance sitting ready in a Halifax 2.8% account waiting to go in April, I could take £500 and add the Asian fund on the side for now and take say £50 to £75 out of my £250 drip feed and run with that for the next while and leave things be for a while and learn

It does look to be an interesting and flavoured fund and would divert a little away from the Vanguard based large cap and mostly western oriented (good pun :T) Lifestat.

If I go with this I think I am best to leave things a lone for a bit and let the investments run and gain more knowledge and see how these go. I am in it for the long term so would be in no hurry to add more or over complicate myself

Thank you.

Best regards.