Vanguard LifeStrategy 60% Equity Fund Growth (Lack of)

_pete_

I've been investing monthly in the Vanguard UK LifeStrategy 60% Equity Fund since 2 July 2014. When I look at the Youinvest information on my portfolio it suggests that my investment into this fund has grown by 4.91%.

Youinvest do not provide a KIID document for this fund 'Because the Share class was launched less than one calendar year ago there is insufficient data to provide a useful indication of past performance to investors'.

However a separate PDF document on the same Youinvest page suggests (depending on which figure you look at) that this fund has grown by 7.28% to 9.17% in the year to date.

My question isn't about the fund's performance (I accept that all funds can go up or down), but about the discrepancy between these various figures. In particular, why has my investment into the fund only grown by 4.91% when Vanguard appear to be claiming much higher figures?

Incidentally, the rest of my portfolio comprises a range of trackers designed to give me roughly the same overall asset allocation as that of the Vanguard LifeStrategy 60. According to Youinvest my overall portfolio (including the Lifestrategy 60 element) has increased in value by 7.21%.

Any insights would be very welcome.

Thanks.

ColdIron

You are investing monthly, not all of your cash has been in the fund since July 2014 as it would have been if you had put it in as a lump sum therefore not all of it has had the benefit of the full year's performance. Consider what has happened to your first month's contribution and your last

TheTracker

The Year To Date means Calendar Year that is since and inclusive of January 1st. And differences between time-weighted and money-weighted return calculations. Unless I miss your point...

BLB53

Could it be due to the effect of drip feeding?

If you had invested a lump sum last July the return may be around 8%. Your first monthly investment may have provided this return but subsequent contributions have not been invested for the whole year so the returns will be diluted. Just a thought?

dunstonh

Youinvest do not provide a KIID document for this fund 'Because the Share class was launched less than one calendar year ago there is insufficient data to provide a useful indication of past performance to investors'.

The funds were launched in 2011. KIIDs have been available for years. KIIDs are perpared by the fund house. Not the distributor.

However a separate PDF document on the same Youinvest page suggests (depending on which figure you look at) that this fund has grown by 7.28% to 9.17% in the year to date.

Year to date is year to date. It is not the same as one year. Year to date would be around 6 months at this point of posting depending on the snapshot date for the data.

My question isn't about the fund's performance (I accept that all funds can go up or down), but about the discrepancy between these various figures. In particular, why has my investment into the fund only grown by 4.91% when Vanguard appear to be claiming much higher figures?

You are mixing up YTD as meaning 1 year when it doesnt.

_pete_

Thank you for the rapid replies. I hadn't realised the impact of monthly drip-feeding on the '% growth' figure but now that it has been pointed out to me I can see that it makes complete sense!

Thanks again.

westy22

Here is Vanguard's official performance records https://www.vanguard.co.uk/uk/portal/investments/all-products?assetType=BALANCED

Reue

_pete_ wrote: »

Thank you for the rapid replies. I hadn't realised the impact of monthly drip-feeding on the '% growth' figure but now that it has been pointed out to me I can see that it makes complete sense!

Indeed, what you actually want to calculate is the Internal Rate of Return which gives you the true performance based upon the amount and timing of your drip feed investments.

There's a quick introduction of it and details of the excel function at: http://www.earlyretirementguy.com/calculating-internal-rate-return/

With more details: https://support.office.com/en-za/article/XIRR-function-de1242ec-6477-445b-b11b-a303ad9adc9d

Or if you're doing it at the same investment intervals you can use IRR: https://support.office.com/en-ca/article/IRR-function-64925eaa-9988-495b-b290-3ad0c163c1bc