Vanguard Lifestrategy

Dunney77

I see a lot of people on this forum are keen on these funds.

May I ask why? Apart from the cheap fees.

Would the 100 or 80 equity be ideal for a 24 year old looking to start compounding over the next 20-30 years?

InvestInPoker

Cheap fees, decent diversification (although not identical to global weightings), easy to DIY and forget about.

100% equity is a good choice for 20-30 year time period, provided you can rationally handle the periods of big losses without getting emotional.

BLB53

Would the 100 or 80 equity be ideal for a 24 year old looking to start compounding over the next 20-30 years?

The advantages for me are globally diverse, auto rebalance and guaranteed to remain at the level of risk you feel comfortable with.

I would suggest they will make a good core holding in a long term portfolio - personally I would choose the VLS80 which should be a little less volatile.

For more info, here's a write-up on Monevator http://monevator.com/using-vanguard-lifestrategy-funds-life/

grey_gym_sock

low effort, does the job, fire & forget.

you could hold about 57 different investment holdings, like me, or you could hold vanguard lifestrategy and have a life

Dunney77

Cheers guys! I was thinking of making it the core then adding other funds around it as I get older and have more disposable income!

Does the compounding effect apply to cumulative performance or is it strictly dividend returns?

dunstonh

Does the compounding effect apply to cumulative performance or is it strictly dividend returns?

With Acc units the price of the unit will reflect the income distributions. So, there is no compounding at your level. Its within the fund. With income units, you would buy more units (and the unit price would be lower). Whichever you choose, the outcome is the same.

Broken_Biscuits

They just got a little cheaper too!
The .1 they used to charge on new investments has been scrapped

Dunney77

Nice. What do people see as a good and unsurprising annual average return for the 80 or 100 fund?

BLB53

What do people see as a good and unsurprising annual average return for the 80 or 100 fund?

Long term, I would think around 7% pa for the LS80, maybe ~8% for the LS100.

Gadfium

Dunney77 wrote: »

Nice. What do people see as a good and unsurprising annual average return for the 80 or 100 fund?

I started investing in the 80% ACC about 30 months ago and I chucked money in 6 times in 2013. On average these sums have grown by 16.3% since then, the highest being 18.6%, the lowest by 13.1% (for the last amount in November 2013). The amounts weren't huge (the 2013 ISA allowance), so the percentages might vary compared to a larger amount.
Its a very short period to use as a comparison though- a big blip could easily wipe the increases and more overnight. Still, it works out at around 8% per annum, which I am more than happy with- especially given the effort that I put into managing it (nil!).

Dunney77

How do you guys hold these funds?

Do you just have them in your ISAs.

I have enough cash to fill my ISA but what would I do with the remaining?