Vanguard LifeStrategy....

tigerspill

A_Flock_Of_Sheep wrote: »

I have checked this evening and it is still up by 11%. I looked at the purchase date and it was 3 March 2014 so not quite a year yet.

Seeing one or two posts here I am unsure if to invest any more in this L/Strat fund. I have even thought about lowering the risk scale a bit and changing to the 40% Equity 60% Bonds version.

What are people's view of this fund bearing in mind it has quite large exposure to the USA and UK?

My Unicorn UK income has been a big disappointment and I may sack that off soon. It is at a slight loss at the moment. I had thought of just going full on for VLS in total.

I checked an India Investment Trust which was at a discount of 8+% earlier. A JP Morgan one.

I have a number of funds that I had set up many years ago with an IFA (1998). I never really looked at them until a year or two ago.
I don't see any real strategy with them but some have done very well.
But after months of research and asking questions on here, I have come to the conclusion that the VLS is for me. I went for the LS40 and am starting to invest in this. I have sold a lot of my company shares and sone Std. Life shares I had and they are now in the LS40.
I do have some invested through an IFA last year and I am gong to leave them a bit having paid the fees.
So I have all these other funds that I think I will also move to the LS40. But might post that portfolio on here to see what people think.

Ultimately I think I will end up with an 80% core in LS40 and 20% maybe invested in some specific funds (maybe some in Woodford) - not sure yet.
One side of me says just stick it all in VLS and forget about it bit another part of me wants to tinker.

tigerspill

Gadfium wrote: »

Mine small VLS80% is up just over 15% over the last two years. Not spectacular, but a heck of a lot more than I would get if it was cash in the bank, without much more effort than cash in the bank. Its the Acc version, so it's bouyed up with the dividends being reinvested.
I've just added in another Vangard fund- the UK Inflation Linked Gilt to provide a bit of a counter to the equity-weighted LS80%. My aim is to have something like 25% domestic equity, 25% Developed world equity, 15% Emerging Markets, 15% Inflation Linked Gilts, 10% UK Long term Gilts. 5% UK property 5% commodities.

Dunno how it will work, but again I want mainly "fire and forget" for the next 10-15 years.

Quick question.
Is there any reason you went with that specific fund to derisk your portfolio rather than balance the LS80 with some LS20 to adjust the %ages?

blizeH

Sorry if this is a stupid question, but how is the allocation set? So for example right now the fund is quite US and UK heavy. I'm guessing it's all weighted automatically but is there anywhere to see the algorithm is uses?

noggin1980

blizeH wrote: »

Sorry if this is a stupid question, but how is the allocation set? So for example right now the fund is quite US and UK heavy. I'm guessing it's all weighted automatically but is there anywhere to see the algorithm is uses?

This gives a good ammount of info. not sure it's exactly what you are after

http://documents.financialexpress.net/Literature/9822203.pdf

blizeH

Thanks, I couldn't find what I was after unfortunately but still interesting to look through

bowlhead99

For the summary of how it is going to operate, you would want the prospectus rather than the short report annual report.

I don't think they commit anywhere to not changing the allocation weightings or the underlying vanguard products used for each asset class or region, other than the percentage equity/bond mix that appears in the product title. The individual developed-world regions do not constantly reflect the pure market cap share of the world index (otherwise they might as well just hold the world index) but neither do they say they are guaranteed to keep the current ratio.

They came up with a justification when they reduced the UK weighting a while back, which read OK.

I get the impression that the similar 'Consensus' product by Blackrock is designed to float around and follow the 'consensus' of what people are investing in across the asset classes, and so for example the Consensus 85 is only 'up to' 85% equities not guaranteed to be that. For L&G multi-index, I think it is a little less rigid too and the fund manager makes an active choice of mix. Whether that is a choice of mix based on what he thinks investors want or based on an economic forecast or what the 'consensus' of all other market participant shows - perhaps a mixture of all three - I'm not sure.

I have the LS 100 within my portfolio and considered the swing in UK allocation as part of my wider porftolio planning when they changed it - I forget when it was - although TBH I didn't do much specific to react to it as I was already making some changes.

dunroving

tigerspill wrote: »

Quick question.
Is there any reason you went with that specific fund to derisk your portfolio rather than balance the LS80 with some LS20 to adjust the %ages?

May be a dumb question, but why would someone hold VLS80 plus VLS20 rather than going for something in between like VLS 40/VLS60?


Is there a systematic difference in the holdings (e.g., different sectors or regions) or philosophies driving what to invest in, other than the percentages?

bowlhead99

1) If you already have one fund and you are only looking to change one weighting it can be simpler to add another to move you to a more preferred mix rather than exit completely and buy a different one. You get much more ability to fine-tune, if that's something you want.

2) Presumably, Gadfium only wanted to add index linked gilts specifically without necessarily adding the whole range of gilts, corporate bonds, overseas bonds etc that would come with an LS20 or similar fund

3) The different LS funds use different underlying holdings to achieve their objectives.

The LS80 for example is a true multi-asset fund (albeit, only mid-to-large equities and a variety of bonds) with dedicated equities funds for each region. In UK for example it holds both UK index and FTSE100 while holding US index and S&P500 separately too, plus other regional trackers for Japan, Pacific, Europe, EM. As it doesn't have a lot in bonds its coverage is lighter, with UK IL gilts, UK investment grade corporate and then a general global bond fund which will include regular UK gilts.

With LS 20 it is the other way around ; a variety of dedicated bond funds but the equities coverage is provided very simplistically with just one UK index and one global developed ex-UK index fund and a bit of EM. So, the equities weighting in the '20% equities' of the LS20 will differ from the equities weighting in the '80% equities' part of the LS80.

I thought I remembered the LS 40 and 60 being less comprehensively allocated (using more basic global indexes) than the LS80 but on looking now they do have dedicated funds for the different regions (although not a separate dedicated FTSE100 or SP500 allocation). Perhaps they changed something a while back when the overall UK weighting was changed. The exact mix of what they hold and how they hold it (UT vs OEIC or both) will be done on efficiency grounds given they themselves run all the different investee funds.

So I think it is fair to say there is some sort of 'systematic' difference in how the different LS X0 funds access the markets. But maybe not something that would compel a customer to have a preference between LS 60 over LS (100+20)/2. If you have a 100+20 or a 80+0 or whatever you do have more control as you don't have to do it 50/50, you can easily create a home made LS [anything] and if the holdings diverge over time it is at your discretion when you rebalance.

It's probably important to realise that your risk in all these funds is not necessarily a linear relationship and so exact 'half way' points in terms of bond percentages etc may not translate to an exact 'half way' on risk over all market conditions although obviously there is a link.

dunroving

bowlhead99 wrote: »

1) If you already have one fund and you are only looking to change one weighting it can be simpler to add another to move you to a more preferred mix rather than exit completely and buy a different one. You get much more ability to fine-tune, if that's something you want.

2) Presumably, Gadfium only wanted to add index linked gilts specifically without necessarily adding the whole range of gilts, corporate bonds, overseas bonds etc that would come with an LS20 or similar fund

3) The different LS funds use different underlying holdings to achieve their objectives.

The LS80 for example is a true multi-asset fund (albeit, only mid-to-large equities and a variety of bonds) with dedicated equities funds for each region. In UK for example it holds both UK index and FTSE100 while holding US index and S&P500 separately too, plus other regional trackers for Japan, Pacific, Europe, EM. As it doesn't have a lot in bonds its coverage is lighter, with UK IL gilts, UK investment grade corporate and then a general global bond fund which will include regular UK gilts.

With LS 20 it is the other way around ; a variety of dedicated bond funds but the equities coverage is provided very simplistically with just one UK index and one global developed ex-UK index fund and a bit of EM. So, the equities weighting in the '20% equities' of the LS20 will differ from the equities weighting in the '80% equities' part of the LS80.

I thought I remembered the LS 40 and 60 being less comprehensively allocated (using more basic global indexes) than the LS80 but on looking now they do have dedicated funds for the different regions (although not a separate dedicated FTSE100 or SP500 allocation). Perhaps they changed something a while back when the overall UK weighting was changed. The exact mix of what they hold and how they hold it (UT vs OEIC or both) will be done on efficiency grounds given they themselves run all the different investee funds.

So I think it is fair to say there is some sort of 'systematic' difference in how the different LS X0 funds access the markets. But maybe not something that would compel a customer to have a preference between LS 60 over LS (100+20)/2. If you have a 100+20 or a 80+0 or whatever you do have more control as you don't have to do it 50/50, you can easily create a home made LS [anything] and if the holdings diverge over time it is at your discretion when you rebalance.

It's probably important to realise that your risk in all these funds is not necessarily a linear relationship and so exact 'half way' points in terms of bond percentages etc may not translate to an exact 'half way' on risk over all market conditions although obviously there is a link.

Thanks, very helpful. I see your point about flexibility - and then, now and again I see people post "Why do you need anything more than an X fund, a Y fund and a Z fund?" I guess it comes down to how comfortable people are with having their finger in several pots and having to rebalance across 15 funds rather than three. But with the VLS being relatively simple already it would be easy enough just to transfer a bit from one to the other any time you need to rebalance.


I recall looking at the historical gains of the VLS20, 40 and 60 over a 5-year period and thinking they didn't seem that different (could be misremembering). I also wondered whether I needed to think about a VLS fund to add "simplicity" rather than just adding to my UK index fund, UK bond fund, other global index funds and other global bind funds. Am currently looking at a 3-4 year time frame before starting to draw on my SIPP holdings, so have been looking at moving more into funds like the VLS20 and VLS40 for simplicity and stability.

Gadfium

tigerspill wrote: »

Quick question.
Is there any reason you went with that specific fund to derisk your portfolio rather than balance the LS80 with some LS20 to adjust the %ages?

I got bored of trying to make the decision so picked two gilt funds: a Vanguard UK Long Duration and a Vanguard UK Government Bond. Those two, along with the bonds in the LS80% give me about 15% bonds in my mix.
I ain't that clever at this gig, so I am very much "suck it and see"

bowlhead99 wrote: »

2) Presumably, Gadfium only wanted to add index linked gilts specifically without necessarily adding the whole range of gilts, corporate bonds, overseas bonds etc that would come with an LS20 or similar fund

<ahem>...that too!

I have also added, just for a bit of fun and to see how it performs, a small side LS100% Equity fund. There's only about 2% of my small portfolio in there, but I wanted to see how it performs over time compared to the LS80%

The fund portion of my portfolio looks like this at the moment. It's mainly part Monevator "Slow and Steady", part my own thinking with a large dash of added ignorance.

Vantage LifeStrategy 80% -21.4%
Vanguard UK Government Bond Index Fund -9.2%
Vanguard U.K. Long Duration Gilt Index Acc -1.9%
Vantage LifeStrategy 100% -2.0%
HSBC FTSE 250 C -1.1%
BlackRock Emerging Markets Equity Tracker -1.1%
BlackRock Global Property Securities Equity Tracker -1.1%

That's running alongside some single stocks, cash and my pensions. My aim is to continue adding to the equity side over the next 10 years before making any major changes or moves to Inc funds.

Will it work? Blowed if I know, but my time horizon is 10- 15 years, so it should see some decent growth (I hope!)