Very very stupid question about Vanguard LS funds

dharm999

We have money invested in VLS 20% to 80%, and the value has increased over the past couple of days, but I was expecting it to fall, which I can't understand given the falls in the equities. Is the increase because the bond values have increased by more than the drop in equities, if not, why have they increased? As I said in the title I am being stupid here, and can't understand it. Any enlightenment would be greatly appreciated.

Thanks

AnotherJoe

The Vanguard funds are very USA company oriented.
USA shares are denominated in dollars.
The Dollar has risen against the Pound.
That rise has outweighed the fall in equities.

Kendall80

I believe the emerging markets components have also risen quite markedly - probably due to currency fluctuations. Asia-Pacific seems to have done well too.


Vanguard UK Inf. Linked Gilts are flying high.

enthusiasticsaver

My VGLS60 has increased too. It is do with currency exchange

richyg

Yes the Vanguard funds have increased partly because of the drop of the pound against the dollar, even though the stock market fell. Weird isn't it.

Don't worry - although when Donald Trump gets in you may get a double whammy of the dollar falling against the pound and the stock market falling as well, irrespective of how good old UK is along it's negotiation with the EU

I guess this is whats called a diversified portfolio.

Just keep plodding along. In the end we are all dead anyway.

ruperts

How risky would it be to now (or at some point tomorrow) sell out of Vanguard and put the proceeds back into similar but pound sterling denominated funds, assuming such funds exist, in doing so realising the currency exchange gains and then buying largely the same shares back for a lower price?

AnotherJoe

ruperts wrote: »

How risky would it be to now (or at some point tomorrow) sell out of Vanguard and put the proceeds back into similar but pound sterling denominated funds, assuming such funds exist, in doing so realising the currency exchange gains and then buying largely the same shares back for a lower price?

Non-starter. If its "similar" eg it holds the same share types, a preponderance of US ones, then the same applies about the currency and you'd just be selling some shares and buying the same ones back.

What you are asking for is the equivalent of perpetual motion, you want to sell some shares in the US and buy them back in the UK for cheaper. Aint gonna happen because believe it or not the traders are aware of the movements of the pound/dollar and alter prices accordingly.

dunstonh

We have money invested in VLS 20% to 80%

That is a strange thing to do. Why not pick one that matches your profile rather than picking funds either side of it?

mgarl10024

It's not a stupid question - I'd wondered the same, and concluded it was due to exchange rates too. If you look at the Vanguard funds that are UK only they appear to be falling as expected.

gavindoc27

I have been wondering the same thing. I had thought the Vanguard LifeStrategy funds were currency hedged back to GBP? Is this only for the global bonds component and not equities?

Ray_Singh-Blue

ruperts wrote: »

How risky would it be to now (or at some point tomorrow) sell out of Vanguard... in doing so realising the currency exchange gains and then buying largely the same shares back for a lower price?

I'm trying hard to put this thought out of my mind, but is very tempting.

On the one hand, my main holding VWRL is up several thousand pounds over the last week. And the barrow boy in me wants to sell now and hold in cash (GBP) with a view to buying back at a lower price at some point.

However, the reason I have VWRL in the first place is for diversification through exposure to world equity markets. Which would be lost if sold, and really, who knows what's going to happen next?