Vanguard Life Strategy Costs

A_Flock_Of_Sheep

Huh?

I have been looking more closely at the Vanguard Life Strategy Range and the fees for holding these funds can be quite competitive

£10,000 the annual fee is £32 + £24 = £56

£10,000 in IP-HI through H&L is £125 a year.

Am I seeing this right? If I am right then a significant saving can be made over a long term?

I am sure someone here must hold the 60% Equity 40% Non Equity version and if so what is your opinion on the product?

jem16

A_Flock_Of_Sheep wrote: »

Huh?

I have been looking more closely at the Vanguard Life Strategy Range and the fees for holding these funds can be quite competitive

£10,000 the annual fee is £32 + £24 = £56

£10,000 in IP-HI through H&L is £125 a year.

Am I seeing this right? If I am right then a significant saving can be made over a long term?

Yes it is at the moment. The platform review will change that though.

I am sure someone here must hold the 60% Equity 40% Non Equity version and if so what is your opinion on the product?

After only a year it's too early to say. Some will say it's too heavy in bonds for the moment. Others will say it doesn't cover all sectors. Others will be happy with it.

What does your research say? Does it fit what you want it to do?

A_Flock_Of_Sheep

jem16 wrote: »

Yes it is at the moment. The platform review will change that though.



After only a year it's too early to say. Some will say it's too heavy in bonds for the moment. Others will say it doesn't cover all sectors. Others will be happy with it.

What does your research say? Does it fit what you want it to do?

Well it appears to provide capital growth but the income from it is not so good. It is income I am looking for with growth 1.7% annually. I would like something that provides income at least two times per year and at a greater value than 1.7%

On the surface it fits only one part of what i want it to do.

M&G Optimal Income seems to give growth and twice yearly income but is made up of bonds not equities. But my earlier hash attempt had no bonds and gilts only Equities. Is it wise to have some bonds in a portfolio?

Hmm so with something like M&G Optimal Income I could "build" my own version of Vanguard Life Strategy?

jem16

A_Flock_Of_Sheep wrote: »

Well it appears to provide capital growth but the income from it is not so good. It is income I am looking for with growth 1.7% annually. I would like something that provides income at least two times per year and at a greater value than 1.7%

On the surface it fits only one part of what i want it to do.

Are you needing the income to actually spend?

M&G Optimal Income seems to give growth and twice yearly income but is made up of bonds not equities. But my earlier hash attempt had no bonds and gilts only Equities. Is it wise to have some bonds in a portfolio?

A balanced portfolio would contain some bonds.

Hmm so with something like M&G Optimal Income I could "build" my own version of Vanguard Life Strategy?

That would certainly be an option. How much "hands-on" would you plan to be?

A_Flock_Of_Sheep

jem16 wrote: »

Are you needing the income to actually spend?



A balanced portfolio would contain some bonds.

I would like the option of either having the income to spend or to re-invest. I know of HL any income goes in an income section I think which you can use to either draw down or re-invest.

The annoying thing about the M&G Optimal Income is that although there is no entry fee there is an exit fee of 4.5% for the first 5 years so if I wanted to re-balance in the short term I would be charged

A_Flock_Of_Sheep

I am thinking that my portfolio would need to be made up of a selection of Income generating bonds and Equity Income fund(s).

grizzly1911

A_Flock_Of_Sheep wrote: »

I would like the option of either having the income to spend or to re-invest. I know of HL any income goes in an income section I think which you can use to either draw down or re-invest.

The annoying thing about the M&G Optimal Income is that although there is no entry fee there is an exit fee of 4.5% for the first 5 years so if I wanted to re-balance in the short term I would be charged

The M&G OI appear to be class "X" units. The standard KID doesn't show any exit charges. "A" units don't show an exit charge through Fidelity. The AMC /TER is lower on the A units too before rebates etc.

Cavendish use Fidelity and may prove cheaper (at the moment) than H-L. They also allow income or reinvest.

A_Flock_Of_Sheep

grizzly1911 wrote: »

The M&G OI appear to be class "X" units. The standard KID doesn't show any exit charges. "A" units don't show an exit charge through Fidelity. The AMC /TER is lower on the A units too before rebates etc.

Cavendish use Fidelity and may prove cheaper (at the moment) than H-L. They also allow income or reinvest.

It is Class X on HL and the KID PDF says:

Exit Charge 4.5% it reduces by 0.5% after the first year and then 1% per year until the investment has been held for 5 years.

But if you are "active" like me and want to re-balance it could be a kick in the groin.

It is interesting that in 2008/09 during the big crash the M&G IO (X) was downside by just 10% compared to equities dropping by 30% ish -

Showing my investing dumbness now - Why were equities down 30% ish and bonds and gilts down by just 10%?

grizzly1911

A_Flock_Of_Sheep wrote: »

It is Class X on HL and the KID PDF says:

Exit Charge 4.5% it reduces by 0.5% after the first year and then 1% per year until the investment has been held for 5 years.

But if you are "active" like me and want to re-balance it could be a kick in the groin.

It is interesting that in 2008/09 during the big crash the M&G IO (X) was downside by just 10% compared to equities dropping by 30% ish -

Showing my investing dumbness now - Why were equities down 30% ish and bonds and gilts down by just 10%?

Equities are more volatile. Bonds are linked more to interest rates, duration and comparative yield. If inflation and interest rates take off the picture is likely to reverse. Tim Hale will explain it;).

The X class are a H_L derivation they choose to offer.

Are you using H_L now? Are you locked into them? Have you opened the current and last year ISA through them? Transfer platform to allow you to access more flexible funds?

Shaolin_Monkey

My understanding is that as HL don't take initial commission there is no exit charge with the Class X shares through them. The Class X units do not have an initial charge but instead back load the charges if you leave the fund early. I've used a few of the funds in the past (through HL) and sold them within a few years without an exit charge.

As for 2008 - while most things fell, not everything did. Equities fell, with some sectors being hit particularly hard - miners, house builders and of course banks were a few things that faced massive falls. Defensive sectors like Pharmaceuticals and Tobacco were not quite as hard hit. Gilts actually rallied as they were perceived to be a relative safe haven. Lower quality high yield bonds on the other hand fared almost as badly as equities. The manager of M&G Optimal Income clearly made a call to avoid the riskier bonds at that time, many other funds in the sector did not do so well over the period.

A_Flock_Of_Sheep

So if my new improved portfolio was made up of say:

M&G Optimal Income 30% maybe 40%
Troy Trojan Income I 50%
Newton Asian Income 20% / 10%

Is that a more balanced portfolio? I think I am falling out of love with Neil Woodford.