VWRL, VLS100, or VLS80 for SIPP?

jdw2000

Morning all! Hope you're well.

So... the process of changing provider for my pension (and converting to a SIPP has taken literally months... but should be complete soon... I will then be able to decide what to invest in.

(By the way, I am switching my trading account, ISA, and SIPP all to Halifax. And FYI: they have rejigged their website, which now has a handy summary page showing all 3 of my accounts. Very smart, as well as being the cheapest platform for me!)

Anyway, just wondering if anyone had any thoughts on which of the 3 products I have identified would be wisest....


My ISA and my trading accounts are all on VLS60. However, as I am only 40 years old, and my pension is only £50K (should be £100K at my age) I have a high appetite for risk. Genuinely doesn't bother me if it goes up and down a lot. As long as it goes up a lot over the next 20 years!


So: VWRL, VLS100, or VLS80?

silver145

" I have a high appetite for risk" = VLS100

"As long as it goes up a lot over the next 20 years!" Dont invest at all.

Chances are it will go up, but it is a calculated risk! If you do not mind the high risk then go with the VLS100 but re-balance every so often depending on the size of your share and other factors etc

Other people will chime in with alot better advice

jdw2000

silver145 wrote: »

" I have a high appetite for risk" = VLS100

"As long as it goes up a lot over the next 20 years!" Dont invest at all.

Chances are it will go up, but it is a calculated risk! If you do not mind the high risk then go with the VLS100 but re-balance every so often depending on the size of your share and other factors etc

Other people will chime in with alot better advice

Re-balance a VLS100? It is self-rebalancing, surely?

silver145

It is but i presumed you would not be piling ALL funds into VLS100 for 20 years from now.

Ergo the need to re-balance other funds you may acrew to mitigate the risk factors

gdreyer

AFAIK yes VLS100 is rebalanced for you. I was recently deciding between 60, 80 and 100 myself and opted for 100. Any other money that's not in equity I will hold separately in my current account(s) so I feel no need for bonds/gilts in my mix.

Jeems

I'm a massive noob to investing but I'm in a similar position to you and I went for VLS80. Personally I think I made a mistake and should have gone for VLS100. If you use the comparison charts, over the past x amount of years VLS80 and 100 pretty much follows the same trajectory's - but for VLS100 the highs are higher and the lows not as low.

When the new tax years comes around, I'm thinking of going down the VLS100 route instead. But like you, interested in others people views.

jdw2000

Jeems wrote: »

I'm a massive noob to investing but I'm in a similar position to you and I went for VLS80. Personally I think I made a mistake and should have gone for VLS100. If you use the comparison charts, over the past x amount of years VLS80 and 100 pretty much follows the same trajectory's - but for VLS100 the highs are higher and the lows not as low.

When the new tax years comes around, I'm thinking of going down the VLS100 route instead. But like you, interested in others people views.

I too am a noob, to be clear....



But I am talking here about my SIPP. Not my trading or ISA accounts (both of which are in the "safer" VLS60 product.


There WILL be another crash around the corner. And the likes of VLS100 and VWRL will take a big hit. What I am saying is that I don't care much if that happens to my SIPP as I don't need it for another 25 years (during which time there will probably be multiple financial crashes!)

For my ISA and trading accounts, I do not have as big an appetite for risk at all. Hence I have VLS60 for those, and the rest in cash accounts (earning 3% interest).

MonroeM

jdw2000 wrote: »

Morning all! Hope you're well.

So... the process of changing provider for my pension (and converting to a SIPP has taken literally months... but should be complete soon... I will then be able to decide what to invest in.

(By the way, I am switching my trading account, ISA, and SIPP all to Halifax. And FYI: they have rejigged their website, which now has a handy summary page showing all 3 of my accounts. Very smart, as well as being the cheapest platform for me!)

Anyway, just wondering if anyone had any thoughts on which of the 3 products I have identified would be wisest....


My ISA and my trading accounts are all on VLS60. However, as I am only 40 years old, and my pension is only £50K (should be £100K at my age) I have a high appetite for risk. Genuinely doesn't bother me if it goes up and down a lot. As long as it goes up a lot over the next 20 years!


So: VWRL, VLS100, or VLS80?

Why are you just considering VLS funds and the Vanguard all world ETF all the way to your retirement age?

I initially thought I wanted an all world tracker fund for my SIPP, however, now I believe I would be best served to hold active and well as passive funds in a more of a balanced mix.

For example VLS funds IMHO are weighted too much to the UK, have not enough EM exposure and no small companies? I feel that you could choose some good active funds to blend in with your passive funds in certain sectors?

bowlhead99

Looking back at some of the previous threads in which you've participated where the merits of these sort of things have been discussed:

"Is a Vanguard Lifestrategy investment all you need"
"100% Equity vs Equity/Bond"
"180K Investment"

This sort of thing has been discussed before and I'm not sure I can be bothered reiterating each point I've previously made.

Your three choices VWRL/ VLS100/ VLS80 are basically

1) "exclusively equities, with 93% of the investment in companies listed overseas"

2) "exclusively equities, with 75% of the investment in companies listed overseas"

3) "not exclusively equities, with 75% of the equity investment in companies listed overseas"

I don't see anything fundamentally wrong with the last of these 3 options for a high growth pension plan for a 40-year old.

The first one implies a very high conviction towards the performance of the world outside the country in which you live and will be retiring.

The second one has better 'home bias' imho - though its greater UK bias is driven by a UK index which is stuffed with international companies with massive overseas revenues that happen to be listed in the UK; that's not the same as investing in companies which are purely UK-facing, so it is still a pretty 'global' looking fund and if you want a lot of international exposure you would probably not be disappointed with what it gives.

The third one will have a lower volatility than the second one as it is not gambling everything on equities always being top dog. This will sacrifice some long term performance, but is not a terrible thing to do. After all, if you really wanted a little extra long term performance and didn't care about wild swings you probably wouldn't just be using global largecap companies mostly in the developed world, you would look at smaller companies and greater allocation to emerging markets and so on. As you are not doing that with these funds, in this search for a simple life and a one-product solution, it stands to reason that absolute highest possible performance is not your only concern. So a fund that is only 80% equities is fine.

Personally if you were going for option 3 (80% equities, 20% non-equities) I would be inclined to go for something like L&G Multi Index 7 which will usually be between 70-100% equities and includes property within the non-equities bit.

jdw2000

MonroeM wrote: »

Why are you just considering VLS funds and the Vanguard all world ETF all the way to your retirement age?

I initially thought I wanted an all world tracker fund for my SIPP, however, now I believe I would be best served to hold active and well as passive funds in a more of a balanced mix.

For example VLS funds IMHO are weighted too much to the UK, have not enough EM exposure and no small companies? I feel that you could choose some good active funds to blend in with your passive funds in certain sectors?

Personally, I am going down the passive route. I do not know nearly enough about active investing to dabble in it. It would just be a mess which take up too much time and, almost certainly, cost me money.

In the years to come I may learn more and have some active investments. But for the foreseeable future (and perhaps forever) I am more than happy to stick to the low-possible cost, low-possible maintenance passive funds.


My assets are as follows, which after much soul-searching and deliberation, I am with at this precise moment:

- invested in property via my house
- ISA and trading accounts in VLS60
- SIPP more than likely in VLS80 (or perhaps L&G Multi Index 7, as per BowlHead's suggestion, but I have not done the reading on it yet)

jdw2000

bowlhead99 wrote: »

Looking back at some of the previous threads in which you've participated where the merits of these sort of things have been discussed:

"Is a Vanguard Lifestrategy investment all you need"
"100% Equity vs Equity/Bond"
"180K Investment"

This sort of thing has been discussed before and I'm not sure I can be bothered reiterating each point I've previously made.

Your three choices VWRL/ VLS100/ VLS80 are basically

1) "exclusively equities, with 93% of the investment in companies listed overseas"

2) "exclusively equities, with 75% of the investment in companies listed overseas"

3) "not exclusively equities, with 75% of the equity investment in companies listed overseas"

I don't see anything fundamentally wrong with the last of these 3 options for a high growth pension plan for a 40-year old.

The first one implies a very high conviction towards the performance of the world outside the country in which you live and will be retiring.

The second one has better 'home bias' imho - though its greater UK bias is driven by a UK index which is stuffed with international companies with massive overseas revenues that happen to be listed in the UK; that's not the same as investing in companies which are purely UK-facing, so it is still a pretty 'global' looking fund and if you want a lot of international exposure you would probably not be disappointed with what it gives.

The third one will have a lower volatility than the second one as it is not gambling everything on equities always being top dog. This will sacrifice some long term performance, but is not a terrible thing to do. After all, if you really wanted a little extra long term performance and didn't care about wild swings you probably wouldn't just be using global largecap companies mostly in the developed world, you would look at smaller companies and greater allocation to emerging markets and so on. As you are not doing that with these funds, in this search for a simple life and a one-product solution, it stands to reason that absolute highest possible performance is not your only concern. So a fund that is only 80% equities is fine.

Personally if you were going for option 3 (80% equities, 20% non-equities) I would be inclined to go for something like L&G Multi Index 7 which will usually be between 70-100% equities and includes property within the non-equities bit.

Thank you very much for that, BH. Much appreciated. The VLS80 was indeed my preferred option. But I will also now check out the L&G option for the SIPP. I think having my SIPP and ISA split up in two funds might actually be better anyway for added diversity sake.

Thanks very much :beer: