Balanced and Diverse

Retyre

Seems to take a lot of work to establish a well balanced and diverse portfolio not to mention re-balancing and monitoring. Been looking at the Vanguard Lifestyle Funds and I'm tempted, would be grateful for views on this as well as other means of establishing a diverse and balanced portfolio. One comment I would make about the Vanguard funds is that they are a little US heavy for my liking, if I do go that route I'll probably take a small UK fund as well.

tigerspill

Hi,
I am in exactly the same situation and came to exactly the same conclusion initially on the LS being US heavy.
But it is a globally balanced portfolio and the USA plays a huge part in this so I guess it is right to have a large %age in the USA.

You might argue that it is VERY UK heavy - The LS60 us at 29% where it only makes up about 10% on the global trade (think I read that somewhere).

Think I am going to go for the LS40 for half of my new portfolio and manage the other half myself between a number of funds (inc a small amount of property exposure).

Retyre

Good point thank you Tigerspill, property would be a good addition.

jamesd

No need to stick to Vanguard. There are some equal-weighted global trackers around and those reduce the high US weighting. MSCI provides a series of equal-weighted indexes that could be used. The MSCI World Equal Weighted Index had about 39% US, 19.3% Japan, 6.7% UK, 5.6% Canada, 4.7% France and the rest in 28 November 2014. Very different from the 50% plus US weighting of a cap-rated index. That's not the only approach, there's at least one that equal-weights by region, 25% to each of four regions.

tigerspill

jamesd wrote: »

No need to stick to Vanguard. There are some equal-weighted global trackers around and those reduce the high US weighting. MSCI provides a series of equal-weighted indexes that could be used. The MSCI World Equal Weighted Index had about 39% US, 19.3% Japan, 6.7% UK, 5.6% Canada, 4.7% France and the rest in 28 November 2014. Very different from the 50% plus US weighting of a cap-rated index. That's not the only approach, there's at least one that equal-weights by region, 25% to each of four regions.

Thanks.
Something more for me to look at! As if there wasn't enough already
So much choice!

Mistermeaner

If it helps with anyone's thinking I also felt the vanguard a little US heavy and wanted some extra uk. Also may want to have a look at L&G multi asset funds which are similar to vanguard but I understand have a more active management approach: they offer similar equity/bond mixes in different version 4,5,6 etc like vls 40, 60, 80. L&g also carry property.

In my med term s+s isa I hold vls80, l+g multi 5 and woodford equity income in a ratio 2:2:1 with monthly purchases configured in the same way

Retyre

Thank you James and ggb1979, currently looking into those funds. L&G Multi Asset might be just the ticket because without property included in Vanguard I may well have bought L&G property fund with a TER of 0.64% plus platform fee. I see the TER's on the L&G funds are a little higher at between 0.31 and 0.34% with Vanguard at 0.24% so I'll do my sums to see which is cheaper going my desired level of property. As ggb says some of the L&G funds are higher in UK content and therefore might save me going for a higher cost UK option to offset Vanguard's US content. Good stuff thank you again.

tigerspill

So are the LS40 and the L&G Multi Fund 4 directly comparative? I.e. is comparing these two funds comparing apples with apples?

Looks like the VLS has outperformed the L&G for 2014. I know that you can't use 1 year as a benchmark, but that is all there is as these are new funds.

Mistermeaner

tigerspill wrote: »

So are the LS40 and the L&G Multi Fund 4 directly comparative? I.e. is comparing these two funds comparing apples with apples?

Looks like the VLS has outperformed the L&G for 2014. I know that you can't use 1 year as a benchmark, but that is all there is as these are new funds.

Hi, only on kindle so can't access full info on each fund - from memory no they are not exactly equivalent as the underlying allocations are all different but they each operate in a similar way of having a series of offerings which increase up the equity (and therefore risk scale) vls 40 does not equal l+g 4 etc but you may find them similarish in terms of bond/equity allocation

*****don't take my word for that though as working off memory*****

Retyre

Think you are right ggb they are similar but not "mirrors".