Alternative to VLS80?

bowlhead99

brendon wrote: »

It's still odd to not be consistent in the granularity, however. Because, like I said, it mentions "UK Index Linked Bonds" in BOTH funds, even though this is a smaller holding than the European bonds in the VLS 20. Even if this was an issue with granularity, surely the Linked Bonds should be excluded from the factsheet if they were a smaller holding? Why have they decided to break out UK Index Linked Bonds, but not a larger asset class?

To some investors, having government bonds which are index linked and denominated in your home currency is the gold standard for a safe investment (even though real-terms returns on it are low or even negative). So as a UK investor it is useful to know that almost 10% of your bonds are in that class. And the VLS80 fund literally holds a UK index linked gilt fund as one of its bond holdings with no look-through required to extract the information. So, makes sense it would be there on the sector breakdown.

Beyond that, the average person buying an equities-heavy fund (i.e. they are investing primarily for equity growth rather than bond returns) is probably not fussed about the exact proportions of what exactly is going into European govt bonds vs Asian govt bonds vs North American govt bonds. If he cared about his bond investments to the nth level of detail he would be researching bond funds giving lots of analysis so he could do his due diligence and make a selection to manage himself rather than handing it over to the manager of his equities-heavy fund, who he knows is just going to stick the cash in their 'global bond' product.

If you are selling an 80% bonds fund which pays interest to the investors but happens to have a small amount of equities too, you will likely focus your factsheet on explaining what bonds you have, 9 or 10 different classes. If you are selling an 80% equities fund which pays dividends to the investors but happens to have a small amount of bonds too, the detail of what bonds you have are less important and it is probably enough to give 3 UK classes and 1 overseas 'lump' which the investor can drill into via the underlying fund's factsheet if he is fussed.

MonroeM

MPN wrote: »

The VLS funds are still pretty much balanced overall in their own catergory's ie. 20/40/60/80 etc.

Not sure what you mean by balanced in each category? However, from my 'initial' research I don't feel anybody is going to make real money out of bonds it's purely for asset allocation?