Vanguard Life Strategy

esmecullen

As a relative beginner I've started off with a VLS60 but looking at a side fund to join it..............not sure whether Asia or North America would be the best way forward..........any suggestions please??????????

As an aside......... dipped my toe into individual shares............just for "fun" ...........not a large amount and they seem to be doing quite well at the present

But for the long term...............just wondering whether it is wise to add a further fund to the portfolio, something that doesnt have any platform fees or monthly charges

Any comments would be appreciated:)

gadgetmind

jamesd wrote: »

That's part of why I'd be inclined in many market conditions to favour value large cap instead of market weighted large cap.

The former needs to buy and sell to retain the value weighting whereas the latter needs do close to zero trading to retain the cap weightings.

jamesd

For reference, the open ended version of Invesco Perpetual High Income is reported to have a portfolio turnover of 25% including that from forced sales and purchases due to investors buying and selling the fund.

A tracker doesn't get to avoid mandatory buying and selling as investors buy and sell. It's also forced to buy and sell to keep invested at the market cap level and to reflect additions and removals from the index it's tracking. As an example of a tracker turnover, consider the HSBC FTSE 100 ETF. It is reported by HSBC to have had portfolio turnovers of 11.69% in the six months to December 2011 and 8.52% for the six months to June 2012. That's a total of 20.21% turnover for a passive tracker.

Something like the UK Vanguard funds are probably not having many sales at the moment so I expect them to be and remain depressed on portfolio turnover until they are more mature.

johnd_2

Don't know whether this is going to get totally buried at the end of such a long thread, but let me start off trying here:

I'm interested in what the performance of one or other of the Life Strategy funds might be over an extended period, say 20 years, but I guess the longer the better. If I had to pick one of the funds I'd say 60 or 80 but the same principle presumably applies to all.

Now obviously these Vanguard funds only seem to have been going in the UK for a couple of years so there won't be much historical data as such. But it strikes me that the histories of the constituent trackers (or proxies thereof) will or at least might be readily available. And therefore it might be possible to simulate the performance of one or more of the VLS funds. OK, this won't allow for real-life tracking error etc but it might be possible to come close.

It then strikes me that this is such an obvious thing to do that someone may have already done and published this. So my question is whether anyone here has come across such an analysis and if so is there any possibility of a link to the results?

takesyourchances

@bowlhead.....or any other opinions....

Back a few previous posts I mentioned about looking at another adding to my portfolio listed and debated it etc, was considering the Threadneedle European Small Cap etc after seeing the IP Income was more core based.

Still debating with myself although no pressure to jump, there is something still about Europe that kind of halts me, was thinking over the weekend rather than a managed fund about the Vanguard Global Small Cap tracker if it could be a sensible long term add to go with the VLS 60% core and other side funds, one of which is the Standard Life Global Small Cap fund, but the Vanguard would be global passive tracker approach for small cap and a lot more holdings.

It was something I looked for before but at the time was not on HL's platform.

If it is a reasonable consideration with what else I have I could run it at 5%-10%.

My idea could be:

VLS 60% as the core (65/70%)
Vanguard Global Small Cap Tracker - New idea for addition
Standard Life Global Small Cap
First State Asian Pacific Leaders
First State Emerging Markets
Aberdeen Asian Small Companies
Aberdeen Japanese Small Companies

Thanks for any thoughts.

bertpalmer

Hi guys, I'm still following this thread with interest! Another 100% holder here.

I'm thinking of adding an American tracker type fund, similar to the VLS. I've heard good things about America and am looking for something else to diversify in to.

Any suggestions? Thanks in advance.

bigadaj

bertpalmer wrote: »

Hi guys, I'm still following this thread with interest! Another 100% holder here.

I'm thinking of adding an American tracker type fund, similar to the VLS. I've heard good things about America and am looking for something else to diversify in to.

Any suggestions? Thanks in advance.

The VLs is weighted by market, so a very large chunk will already be in the us, probably 40% or so of the all equity version. The areas that are generally missed out of Vls are normally small cap and commodities or possibly property so these areas are worth looking at. Many consider growth in emerging markets might be higher in the future and the Vls funds have a low weighting due to their small size currently.

takesyourchances

bertpalmer wrote: »

Hi guys, I'm still following this thread with interest! Another 100% holder here.

I'm thinking of adding an American tracker type fund, similar to the VLS. I've heard good things about America and am looking for something else to diversify in to.

Any suggestions? Thanks in advance.

As bigadaj said a large area is focused in America in the VLS and Large Cap Companies and also as mentioned the VLS does not cover Small Companies, so maybe the Vanguard Global Small Cap Tracker could suit, similar idea to what I am looking at as a complement to the VLS.

Hope that helps. At the moment I am feeling that the Vanguard Global Small Cap tracker is more suitable for me to add than my previous ideas over the last few weeks

grey_gym_sock

vanguard global small cap is about 60% in the US.

so that could be good if you like the US.

or overweight in the US if look at it another way.

JohnRo

grey_gym_sock wrote: »

vanguard global small cap is about 60% in the US.

so that could be good if you like the US.

or overweight in the US if look at it another way.

The problem seems to be that if you're sold on passive index tracking there aren't or don't appear to be very many choices at all for a regional small cap selection beyond ETFs so somewhat forced to go the vanguard route to obtain global smaller company exposure. Not that there is anything wrong with the fund imo.

It was actually my best performing index holding until recently when the UK mid cap surged ahead, though my other managed regional small caps are still all lagging except the cazenove UK so overall the vanguard global is probably still ahead of all the managed regionals on aggregate. I should perhaps try and make a rough calculation to check it but haven't.