alternative low-cost to VLS80 etc

cuthbertlilly

People are saying VLS80 is possibly due a crash – due to heavy US and bond allocations – so which other low-cost trackers could mitigate this?

I’m currently £850 in VLS and £200 in Woodford equity income, looking to put another £5k-ish into equities now…

ChopperST

"People" which people - people trying to sell you things? Ask them where their money is.

The life strategy series is a tracker or trackers. Depending on your bond allocation it will always track downwards in a crash. Looking for another tracker to avoid this is impossible - you would need to find a fund manager who would have to actively invest to mitigate the crash.

Alternatively invest in fixed income products. Cash being the safest.

If you worried about a crash with a £1k portfolio I would say you are invested above your risk profile.

How long is your investment horizon?

noggin1980

You could use a tracker that just tracks the UK but then "people" say there will be a crash if labour win, or there will be a crash if the conservatives win and hold a referendum on the EU. So perhaps not

So instead maybe you could use a tracker and just track Europe, but then "people" say Greece might default and bring down the EU and there will be a crash, so we can't invest here either, hmm.

or you could go with your original plan of the lifestrategy which has money spread out across the world giving you good diversity so if one of these things does happen it's not to all your money. Yes the VLS has lots of US but that's because the world markets have lots of US. If people really did think that US stocks were too high then they wouldn't be too high any longer. They are worth what they are because thats what people think they are worth.

That doesn't mean there won't be a crash tomorrow, afterall shares have gone up for a long time now but they could just as easily continue going up for years to come.

Time in the market rather than timing the market generally is the way to go.

Mirno

"People" were saying there will be a crash in the markets from at least 2000, it took 8 years for them to be right.
"People" are still saying there's going to be a house price crash....

If you make a prediction and wait long enough, it'll eventually become true. Even a stopped clock is right twice a day.

Freecall

I think that you are being hard on 'people'.

I know people who accurately predicted 12 of the last 3 downturns.

jimjames

cuthbertlilly wrote: »

People are saying VLS80 is possibly due a crash – due to heavy US and bond allocations – so which other low-cost trackers could mitigate this?

A tracker that doesn't invest in the US or bonds maybe? You could plump for UK, Europe, Japan, Far East, take your pick.

But then you're completely getting away from the principle of VLS which is to have a balanced portfolio in one fund.

For the sorts of money you currently have, much more than 1 balanced fund seems overkill.

System

If you are desperate to avoid US and want one multi-asset tracker, you could look at the L&G multi-index range.

However they are more expensive than Vanguard and because their geographical spread is more artificial, you have to ask just how passive they are.

I have some reservations about the US stock market, but then again I have reservations about all stock markets! Seriously, if the US market tanks, all the other stock markets will follow suit.

Drp8713

Look at a managed fund like Baillie Gifford Managed.


Only 15% USA.


they seem to have 10% bonds 10% cash rather than 20% bonds .


0.44% OCF is also quite cheap for an active fund.

bowlhead99

If you're looking to put another £5k to work but don't like US or bonds, invest it in something that is not US or bonds.

The L&G multi fund above is less static in terms of allocations than VLS (which you may or may not like) and also includes direct commercial property within its non-equities piece which you might view as a positive (I do). So if you're on a platform that has that fund (i noticed recently that HL doesn't) and you don't like your current fund you could at least consider whether its strategy and holdings could work for you.

Of course, changing your asset allocation on gut feel is maybe not what a typical buy-and-hold investor using a mixed asset fund should try to do. But if in evaluating your existing holding you realise you don't have the stomach for a fund with large fixed allocations to certain sectors through thick and thin,, then maybe the VLS is not for you and you would be better off in a more actively managed fund - where the manager decides the allocations (which you won't always agree with but at least you would know someone was thinking about the issues for you).

There are lots of ways to play the "I have too much US and too much bonds" game. If you had the courage of your convictions you could keep a global equities allocation but buy a S&P500 short ETF - they have their flaws and can be expensive when markets are flat but are great in a crash.

You could buy a fund like Artemis Strategic Assets which has high UK equities, low US equities (and even lower everywhere else) and a short position on a variety of worldwide government bonds. You would get a very different return from VLS but not necessarily a return that you end up preferring.

Good luck anyway- luck is something you'll need when you are letting "people" tell you to make big calls on the markets' directions.

cuthbertlilly

Steady on MSE posters, "people" in the context of my post is known as a turn of phrase, i.e. referring to general MSE and media discussion.
Anyway, back to the main point, I was just after others opinions and discussion on what they are doing at the moment with investments and ISAs.
My investment horizon is at least 5 years, possibly 10-15 and quite potentially 35 years! with the extra £5k earmarked, I may just lob it in to Woodford equity income, L&G multi 5 and an EM fund - what the hell

edinburgher

I may just lob it in to Woodford equity income, L&G multi 5 and an EM fund - what the hell

Do you actually have a personal policy or plan for how you invest, or are you just going for a shotgun approach?

It might benefit you to write down what you are trying to achieve, how you will get there and how realistic your chances are. It's a great exercise and allows you to get your thoughts straight about what you should (or shouldn't) invest in.

As it stands, it sounds like you are suffering from information overload, jumping from one theme to the next.