Vanguard Life Strategy

takesyourchances

innovate wrote: »

There should be some kind of health warning whenever someone posts a recommendation for an investment. They should at least declare

1. what %age of their total investment it is
2. how old they are

Waxing lyrical about a fund etc that is a minute fraction of a portfolio, without revealing how much is involved could lead others to draw the wrong conclusions (positive and negative).

Not saying how old you are could equally lead others to draw wrong conclusions. E.g. an investment might be brilliant if you are in your thirties, but not such a good idea if you are in your seventies. Or the other way round.

Yes that is true when people are discussing funds with age and percentage holdings this would make things much better for debating and risk, time scale etc due to age and timescales.

For my own portfolio, I am looking to add a bit of diversity to the Vanguard LS core and a bit more risk for return on smaller percentage holdings.

My new Portfolio at present is two funds.
My LS is 86%
My Asian Small Cap is 14% (I am aiming this to be around 10%)

On looking at a second fund, I would like to reduce 2 side funds to around 10% each or lower if adding a 3rd side fund to keep the core Lifestat high in percentage.

I would like to keep my core Lifestrat at around 80% of the portfolio. A few side funds will be enough for me, nothing overly complicated and then running with the drip feeding and lump sums here and there.

Age I am 33, long term view to this.

This is my angle at the moment.

Best regards.

kidmugsy

For what it's worth:

We tried to open a TD ISA a few years ago and they were shambolic. We have SIPPs at HL and their service has been fine.

takesyourchances

Having discovered from another topic today the analysing portfolio tool on HL this is exactly what I was looking for to look over the portfolio allocation and assets and geographical spread on the Xray of the portfolio broke down like this. This really helped a great deal.

Between my two funds at present the Vanguard Lifestrat 60% and Aberdeen Asian Small Cap the main Geographical locations are.

UK 44.95%
North America 18.12%
Developed Europe 10.45%
Emerging Asia 10.98%
Developed Asia 6.12%

with low percentages elsewhere.

Upon thinking of a new opening of £500 in a fund within this tax year before April and another £500 later after April in the new tax year several months later I am now thinking towards an Emerging Markets side fund first rather than the Aberdeen Global Small Cap which I am considering also.

Looking at the weight above I was thinking that a bit more exposure in emerging markets and the First State Global Emerging Mkt Leaders looks very interesting for this as another side starting with £500 and then some low drip feeding.

I feel there is a reasonable weight above in the UK and North America at the moment, was thinking that the Gobal Small Cap next is most exposed in the UK and North America, although it diverse's into Small Cap Companies from the Large Caps.

I still like this diverse idea with the Aberdeen Global Small Cap, but thinking that the Emerging Markets holding spreads a bit more Geographical location wider than I have at present and a small holding into the Global Small Cap could come after later in the year.

Excellent to be able to break the portfolio down like this on HL with this tool and see the xray of global percentages held as I was trying to do this on paper until I was pointed to this today

Also I see my bond allocation is around 30% now at present with adding the side fund to the Lifestrat 60%, I will find the over all portfolio bond holding more accurate when I look again.

How does this theory and strategy sound with a long term view?

Best regards.

Totton

Not saying how old you are could equally lead others to draw wrong conclusions. E.g. an investment might be brilliant if you are in your thirties, but not such a good idea if you are in your seventies. Or the other way round.

Not so imho, a 70yr old may be wealthy and have no interest in short term profit whilst another 70yr old may rely on the holding for income. Rather than require the age of an investor it seems more useful to know their objective. For example, a 30yr old seeking to preserve and grow (in that order) their capital for a mortgage, may be better off with a Troy fund or the IT Personal Assets, a different 30 yr old with a 30 year investing horizon may be better using a different strategy.

Age has little to do with it imho.

Totton

Keeping the LifeStrategy fund at 86% seems high, perhaps 65% would be better although I prefer 50% at the moment whilst I still have my marbles. The LifeStrategy funds have not captured the recent market rises as much as my other holdings but longer term theory holds that these tracker funds should work out :-)

takesyourchances

Totton wrote: »

Keeping the LifeStrategy fund at 86% seems high, perhaps 65% would be better although I prefer 50% at the moment whilst I still have my marbles. The LifeStrategy funds have not captured the recent market rises as much as my other holdings but longer term theory holds that these tracker funds should work out :-)

Yes I agree, 86% is high as the core, this is mainly due to the early stages and the one side fund at the moment. I feel there is room for more exposure and even towards 65% is an option with the right funds.

The lifeStrategy has been steady recently, the Asian Small Cap I have has been interesting and gained well. I know this can reverse as quick, but feel there is good potential in Asia for long term growth which attracted me to this fund.

I think it is looking likely for an opening of the First State Global Emerging Mkt Leaders with £500, then drip, this will lower my core a little off the 86% and the additional exposure seems good. South Africa has potential, South Korea and Taiwan I like for growth and India is included and Hong Kong is included. I like the exposure in this fund in Latin America as Chile has grown well recently and is one of the stronger growing regions in Latin America and Brazil is interesting to have included.

I feel next this EM fund would be a good addition this tax year as I still have some allowance left before April and maybe the global small cap later in the year.

There is a lot of interesting additional side funds so I can see why you have your lifestrat at 50% to expose to others areas for your portfolio which is capturing this recent growth. I guess if this changes you can always increase your core % up and down to suit.

Thanks.

jingleberry

I'm thinking of buying vanguard life strategy on Charles Stanley, a discount broker that specialise in clean funds. They change 0.25% of total holding value pa. So they beat HL for funds of £10000 or less and they are worth looking at if you want to spread your investment over a few funds. One question which I can't seem to find the answer to on here - the vanguard life strategy funds have an AMC of 0.33% according to Charles Stanley. Is this in addition to the AMC being charged by each of the consituent holdings of the life strategy fund? So for example the largest holding within the life strategy 100% acc fund is currently VANGUARD FTSE DEVELOPED WORLD EX UK EQUITY INDEX ACC. This has an AMC of 0.25%. If the life startegy fund is also charging 0.33% wouldn't it be better to buy the consituent funds seperately and avoid the double charge? Or am I missing something? (wouldn't be the first time!)

AlwaysLearnin

You could buy the underlying funds separately with the cheaper charges, but the lifestyle package offers the benefit of automatic rebalancing. Essentially, it offers convenience.

jem16

jingleberry wrote: »

One question which I can't seem to find the answer to on here - the vanguard life strategy funds have an AMC of 0.33% according to Charles Stanley. Is this in addition to the AMC being charged by each of the consituent holdings of the life strategy fund?

No it's not in addition to. The TER of 0.33% is what you would pay.

brasso

AlwaysLearnin wrote: »

You could buy the underlying funds separately with the cheaper charges, but the lifestyle package offers the benefit of automatic rebalancing. Essentially, it offers convenience.

Hmm. So you pay management charges on all the constituent funds, then you pay a charge for management of the overall fund? I may have missed it but I skimmed through this thread and hadn't seen that made clear. People seem only to refer to the overall fund charge (plus platform fees etc).

Can someone enlighten me how the rebalancing works? Do they start with a detailed asset allocation and diversification strategy across global markets, and then rebalance to keep aligned? How often does this happen, and do you pay charges for every rebalance i.e. the cost of selling part of one holding and buying another holding? (Even if these charges are hidden in a reduced number of shares per fund.)

I quite like the idea of these Lifestrategy funds, largely because of what seems like very low cost compared with DIY. But I'm now thinking that the charges are actually much higher but just not transparent?

Is this fair or not? (I hope it isn't.)