Vanguard Life Strategy

MadMat

guitarman001 wrote: »

Looking at the performance of the 60,80,100% etc Lifestyle Vanguard options... they perform poorly compared to the ex-UK equity Vanguard fund. I think I'd go for that...........!!

The lifestyle funds have only been going for 18 months, isn't that a rather short time to be drawing conclusions about funds holding a high percentage of equities?

Mat

takesyourchances

guitarman001 wrote: »

Exactly.
No initial charge, still 'only' 0.3% admin... keeps out of the dodgy UK right now, previous gains look good. If I could choose that for my pension fund I would. However I've only got my precious savings... thinking about it. Surely this beats the pants of the lifestyle funds!?

Thanks for the information, looks interesting, and the 0.3% admin.

With a third of my Vanguard Lifestrat already focused in the UK if I was to do another side fund, I would not want to increase the UK rise like discussed previous here.

I looked at the performance and it does looked to have been gaining well. Interesting.

So what would anyone's thoughts be on this running as an additional side tracker to the Vanguard lifestrat?

Best regards.

takesyourchances

guitarman001 wrote: »

The only problem with it is that it's still developed world and 50% in the US alone....!

True, 50% in the US is hard to know, all confusing eh :cool:

guitarman001

Just so you know, I've had a terrible track record - listen to the other people on the forum lol!

Comparing the same 18 month period between lifestyle and ex-UK equity, I think the latter came out better? Will check later

JohnRo

guitarman001 wrote: »

Looking at the performance of the 60,80,100% etc Lifestyle Vanguard options... they perform poorly compared to the ex-UK equity Vanguard fund. I think I'd go for that...........!!

The Lifestyle 100% equity is the only reasonably fair comparison with the world ex-UK equity fund...

where's the comparatively poor performance?

http://www.trustnet.com/Tools/PDFViewer.aspx?url=ChartingPDF.aspx%3Fcodes%3DFFPC9,FACDV%26color%3DFF0000,FFB81B%26hide%3D%26span%3D60%26reinvested%3Dwithout%26bid%3DbidToBid%26retValue%3DreturnPercentage%26PortfolioName%3DSelect%20a%20Portfolio%26Currency%3DGBP

..bah just saw your reply

guitarman001

Good tool! OK, so I was talking b***ocks there! I need to do some more research before putting money into anything... Thanks for that!

takesyourchances

guitarman001 wrote: »

Good tool! OK, so I was talking b***ocks there! I need to do some more research before putting money into anything... Thanks for that!

:rotfl: so take it I just carry on researching to then :beer:

takesyourchances

guitarman001 wrote: »

The only problem with it is that it's still developed world and 50% in the US alone....!

On more looking, out of interest I was looking at the Vanguard products and looked at the Vanguard US Equity Index GBP Accumulation just to see how it was performing and made up, I was surprised how the US based tracker was performing, is 50% exposure in the US in the Vanguard developed World tracker a bad thing?

Interesting! :eek:

Best regards.

bowlhead99

guitarman001 wrote: »

Comparing the same 18 month period between lifestyle and ex-UK equity, I think the latter came out better? Will check later

Looking at what a particular fund did over a short period against one other fund is not going to give you any guidance as to what you should invest in now.

You need to look at a long period and at general market sectors and consider the prospects from here from those sectors. Once you have decided on a sector, or more sensibly, a mix of sectors, you can decide whether you want to access that sector through active management or passive trackers or whatever. Eventually you will look at specific funds.

With respect, looking at a fund of equity trackers globally spread, over an 18 month period, comparing it to a purely UK index fund or a purely non-UK index fund, each with a marginally different management fee equivalent to a couple of pints of beer per year, and then trying to draw some deep and meaningful conclusions about which one of those you should invest in next year, is bolllox.

Or more politely, it shows naivety. Go back to square one, think about what the funds invest in, and what gaps you have in your portfolio which need filling, and then you might be better placed to decide if either of them might be useful in the long term. What you should find is that other funds e.g. asia, emerging markets, smaller companies, private equity, real estate, commodities etc are also on the radar, along with a bunch of other stuff. The more you look at it the more a wide selection of funds becomes compelling because all the sectors and geographic regions have their plus points and if you don't have any specialist inside knowledge or high quality ideas in your own head, you should naturally try and get in all of them.

As you go through this process, it's unlikely you will decide a not-very-well diversified index like the FTSE 100 is the perfect place for you, and while Vanguard LS is not for everyone at least it is a bit better than a smaller basket. It is still all large listed equities though, mostly developed world, while the <100% versions have some government and investment grade bonds. Those things are not the whole investment universe.

takesyourchances wrote: »

I was surprised how the US based tracker was performing, is 50% exposure in the US in the Vanguard developed World tracker a bad thing?

If 50% of developed world, by market capitalization, is listed in the US, then it is not a bad thing to put 50% of your money in that pot if what you are trying to achieve is placing your money in all companies with relatively larger amounts in larger companies. I would question whether that is a suitable strategy for all.

Sure, you won't fail to keep up with the index (within a margin of error) so when people say their portfolio grew 10% like the world index they just saw on TV, you'll be able to say yours did too and not feel embarassed that you only got 8%. And accepting a market average return is an easy option. That doesn't tell you whether it is a suitable strategy or not because it depends what they mean by market average and what other opportunities are out there for the same risk.

On the "50% US" point, example Coke is in that part of the portfolio because that's where it's listed but 80%+ of its revenues are not in the US, most of its growth from here must be outside the US and it operates in 200+ countries.

guitarman001

Great post - thanks!!