Move Vanguard LifeStrategy to Blackock Consensus?

mageliken

This is quite difficult as I don't believe actively managing my portfolio is wise - I lack the required knowledge, and even if I gained this I don't believe it would give me an edge over these funds. Having read L&G's factsheet it seems to me that their over/underweight analysis brings it more inline with VLS? I am trying to make a decision based on allocations which seem sensible today but this does not necessarily reflect how they will perform in the future. Perhaps the bigger difference is then how they are managed?

Can this be distilled to a) I believe L&G will make the "best" allocation decisions going forward, or whether or not the current VLS allocations will stand the test of time and b) how L&G might vary the equities/bonds ratio over time with the understanding VLS should remain relatively static? b) Whether or not anything is excluded from the funds - i.e. L&G including property?

Analysing my own thinking I find it interesting that I seem to have rationally or irrationally mostly discarded the Consensus products as an option...

On my rounds I've today found Passive fund-of-funds: the rivals on Monvevator. My interpretation is that it seems to be fairly dismissive of L&G and Consensus due to the potential variance of the equities/bonds. In a scenario where I held VLS and L&G, perhaps I could top up/down the VLS as required to keep this at around 90/10 as I am currently... or does this effectively undo one of the "benefits" of the L&G?

dunstonh

This is quite difficult as I don't believe actively managing my portfolio is wise

VLS and BR are both partly managed. They decide the asset allocation. That is a management decision. L&G is just more fluid of the three.

Having read L&G's factsheet it seems to me that their over/underweight analysis brings it more inline with VLS?

A factsheet is a snapshot on a given day.

On my rounds I've today found Passive fund-of-funds: the rivals on Monvevator. My interpretation is that it seems to be fairly dismissive of L&G and Consensus due to the potential variance of the equities/bonds.

Yet others would consider that a good thing compared to being forced into a rigid asset type even when you would prefer to ignore it.

TheTracker

dunstonh wrote: »

The wrapper is not the risk. It is the VLS80/100 that is high risk. The average UK consumer would fall around VLS40-60. It doesnt mean you should. Just an observation that you are investing much higher than the average person.

The raw % of equities is just one indicator of portfolio risk. It is the asset allocation and diversification within the % that is just as important. My feeling is that the average individual UK investor holds a lot more risk in an x% portfolio than an x% VLS. For instance most of my acquaintances hold handfuls of of individual shares in banks, retailers, and historically hot companies. Heck, half of them have half their money in a single leveraged unit of property. It's my belief the average UK investor is inadequately diversified to an extent that is at least important as the equity/bond split in their portfolio. I would be highly surprised if the average UK consumer held a portfolio with a risk level of VlS40-60, but not that they hold 40-60% equity/fixed.

TheTracker

bowlhead99 wrote: »

How much cheaper? The OCF looks pretty similar to me unless I've missed an announcement that the consensus funds are dropping in price significantly. In any case, 0.1% here or there is nothing compared to the difference you will get in gross performance driven by asset mix.

While that is true, 0.1%pa difference in fees is equivalent to 2.27% of your returns over ten years assuming an estimated 7% before inflation before fees return.

bowlhead99

TheTracker wrote: »

While that is true, 0.1%pa difference in fees is equivalent to 2.27% of your returns over ten years assuming an estimated 7% before inflation before fees return.

Yes, like I said, 0.1% a year or 2% a decade is a complete irrelevance compared to the differences the two or three portfolios will have based on their disparate asset allocation.

So, given the range of OCFs amongst Blackrock Consensus 85, VLS 80 and L&G Multi 6 is less than the 0.1% that you did the maths on, you have to decide what asset allocation methodology you want rather than what fees you want and should not let minor differences in fees make the decision for you.

Jsscmm

bowlhead99 wrote: »

Yes, like I said, 0.1% a year or 2% a decade is a complete irrelevance compared to the differences the two or three portfolios will have based on their disparate asset allocation.

So, given the range of OCFs amongst Blackrock Consensus 85, VLS 80 and L&G Multi 6 is less than the 0.1% that you did the maths on, you have to decide what asset allocation methodology you want rather than what fees you want and should not let minor differences in fees make the decision for you.

Or have both.... One for SIPP and another for your ISA.