Vanguard Life Strategy

Temrael

The main difference is the ratio of shares (equities) to bonds. The number gives you this, e.g. The 60 has 60% shares (40% bonds) the 80 has 80% shares.

In general the higher the number the higher the risk or volatility. But also the greater the oppourtunity for growth.

enthusiasticsaver

The difference between the various Vanguards is the level of bonds to equities (hence the risk as equities are considered to be higher risk but performance is generally better) The aggressive funds are the ones with the highest equities level - ie Vanguard 80 and 100 and the more cautious ones are VLS 20 and 40.


So the VLS 60 which I am investing in has 60% equities and 40% bonds/fixed term investments. If you look on trustnet for each individual fund you can see how the performance differs. The charges are the same for each of them.

savingsaving2015

Hello.

Ok i see, so would there be an argument to split and go in a 40% Vanguard and an 80% Vanguard or would they counteract each other?

Thank you

Temrael

There's no need to do that unless you are trying to blend two to reach some overall % that you can't get with a single fund because Vanguard don't offer it. e.g. 50% shares or something.

You'll be holding the same assets in any of them, only the ratio to Bonds varies (other than the 100 of course).

bowlhead99

savingsaving2015 wrote: »

Hello.

Ok i see, so would there be an argument to split and go in a 40% Vanguard and an 80% Vanguard or would they counteract each other?

Thank you

if you did 50:50 between the '80' and the '40', you would end up with a portfolio that was 60% equities. You can look at the factsheets on the Vanguard website to see the underlying funds that they each use. You would have a slightly different mix of underlying funds but be achieving broadly the same result. If you later changed investment platforms you would have fewer funds to transfer to a new provider if you just used the one instead of two. And if you reduced your contributions you would find it harder to meet any minimum monthly subscription amount for each, if you have a greater number of funds.

The advantage of having two funds is you could tweak your overall allocation of equities quite easily to a blended average of 70% or 50% by changing the proportions. Of course, no reason you could not just add a 100% or a 20% to apply fine tuning at some point in the future if you wanted to.

bowlhead99

Temrael wrote: »

You'll be holding the same assets in any of them, only the ratio to Bonds varies (other than the 100 of course).

The only tweak to that generalisation which might have some practical value is when you get down to the 20% equities and it's mostly a bond fund, the distributions count as 'interest' and so the tax that would otherwise have been suffered, can be claimed back if you are investing via an ISA.

However at the 20% equities level the equities are just provided from one UK index and one ex-UK index, rather than the plethora of individual regional funds.

So there are some practical differences between funds but at the higher equities level it just comes down to what % equities you want and 40 or 60 or 80 or a mix of all of them would work in a similar way albeit with higher risks at the higher equities levels. The funds have not been going long enough for the disparities in performance and volatility to be really seen because the last few years have seen decent gains in equities and also in bonds. In other parts of the economic cycle the performance will be more disparate as equities-heavy funds traditionally perform very differently to bond-heavy funds.

savingsaving2015

Thank you again for your help.

I think i am going to go with Charles Stanley Direct and try the Vanguard 60 acc first and then look into one of the following funds to sit alongside it -

CF Woodford Equity Income C Fund

Jupiter India I Fund

BlackRock Gold & General D Fund

Aberdeen Global Chinese Equity R Fund GBP

Anyone with any experience with these funds or caution words?

Thank you!

AndyT678

Not sure that India, gold and China would be where I'd choose to dip my toes as a first timer...

C_Mababejive

I'm no expert but i wouldnt touch a gold fund or india..

BLB53

Anyone with any experience with these funds or caution words?

Up to you, but as an experienced investor for over 25 yrs, I would suggest the low cost trackers will probably outperform the more expensive funds over the long term - 10 yrs+ - so my advice, for what its worth would be to stick with the boring trackers.