Vanguard direct to customer offering confirmed

hennerz

fun4everyone wrote: »

Hennerz perhaps you should realise there is a difference between the USA and the U.K.

Heh, maybe you should spend more time reading my posts instead of Thanking anyone who disagrees with them.

As I already posted: http://www.evidenceinvestor.co.uk/2016-uk-fund-managers-annus-horribilis/

fairleads

hennerz wrote: »

Why is Warren Buffet willing to bet against hedge fund managers while advocating tracker funds? Why does he wish his wife to invest in a tracker stating: "long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions, or individuals — who employ high-fee managers" Why is there net inflows into European passive funds in 2016 – both index funds and ETFs – totalled $83 billion and outpaced the $48 billion netted by their active peers?

The operative word is most, which implies that a significant minority still choose active management.
In the case of the example quoted the significant minority investing in European active funds is just over 36% of the 2016 total.
Interesting is that WB constantly encourages investors to not time the market, yet his strategy is opposite.

edinburgher

So the take home message here is that Warren Buffet advocates a different strategy for the 99.99999999% of the global population who aren't Warren Buffet? That seems fair enough

Crashy_Time

Very interesting, thanks for posting.

dunstonh

hennerz wrote: »

Heh, maybe you should spend more time reading my posts instead of Thanking anyone who disagrees with them.

As I already posted: http://www.evidenceinvestor.co.uk/2016-uk-fund-managers-annus-horribilis/

1 year periods, as that article has can be misleading. According to research by S&P Dow Jones Indices, the majority of active UK equity fund managers returned more than their passive benchmark in the year to 30 June [2016], with 82% outperforming the S&P UK BMI index.

UK large and medium-sized company funds returned the most, with 92% of actively managed funds beating the S&P UK Large/Mid Cap index over the year to the end of June. However, S&P says that this stands in stark contrast to UK smaller company funds, with the majority of funds underperforming their benchmarks over one, three, five and 10-year periods.
--

So, in June, 1 year had most active being better. Yet by the end of December, 1 year had passive as being better. Main differences in the periods was the June to June had a stockmarket crash in the middle. Whereas 2016 calendar year did not and was mostly growth. Typically, you find passive is better in growth periods rather than volatile.

For me, I tend to avoid general UK growth funds on the managed side. I think passive is better if you want to invest in that style for that sector. However, if you want focused UK equity funds such as defensive, income, spec sits/recovery, value etc then that is where the managed comes into play.

BananaRepublic

bostonerimus wrote: »

Some active funds will beat the market and some won't. It's great that you are on the plus side, but there is a selection bias in these anecdotal stories as those that lose money seldom step forward to advertise their failure. People owning passive funds will on average beat those owning active funds and so to maximize the probability of "success" you should use a passive approach.

My experiences are not anecdotal, they are factual, and they do not involve just one fund, but a group of funds, over a long period (20 years or so), making it unlikely - but not impossible - that luck was on my side.

However, you say "People owning passive funds will on average beat those owning active funds". That assumes random fund selection. And indeed if you are daft enough to choose funds in that manner, then yes I agree with your remarks. However, one of the posters - Dunstunh - is an IFA, and has been so for quite a few years. That means that he has long term experience of choosing funds, and he states that he too can select active funds that outperform passive ones. Bear in mind that he will have helped goodness knows how many people select funds, and so you would expect his experiences to be more representative.

So in short, you have misinterpreted the results of research to draw conclusions that are not valid. As I had stated, it would be fairly easy to see if using historical performance data was a reliable way to pick funds. My experience suggests it is. Proper research would provide a more informative answer.

Incidentally, my comments apply to funds outside of the US. The US is known to be a market where active funds do particularly poorly, and passive funds are perhaps the best choice.

Linton

dunstonh wrote: »

1 year periods, as that article has can be misleading. According to research by S&P Dow Jones Indices, the majority of active UK equity fund managers returned more than their passive benchmark in the year to 30 June [2016], with 82% outperforming the S&P UK BMI index.

UK large and medium-sized company funds returned the most, with 92% of actively managed funds beating the S&P UK Large/Mid Cap index over the year to the end of June. However, S&P says that this stands in stark contrast to UK smaller company funds, with the majority of funds underperforming their benchmarks over one, three, five and 10-year periods.
--

So, in June, 1 year had most active being better. Yet by the end of December, 1 year had passive as being better. Main differences in the periods was the June to June had a stockmarket crash in the middle. Whereas 2016 calendar year did not and was mostly growth. Typically, you find passive is better in growth periods rather than volatile.

........

Surely the most significant factor was the BREXIT vote leading to the large drop in the £. Large companies mainly increased in value in £ terms because their price is underpinned by their involvement in the global market whereas small companies which attract less foreign investment interest generally fell in £ terms as they are far more susceptible to local economic disruption.

Which raises a thought in my mind - do the comparisons that are made between mainly US based indices and UK based fund performance take account of currency fluctuations?

dunstonh

Another thing to note is that passive is still an investment strategy.

Vanguard Lifestrategy 60 (a strategy that only uses passives) was top quartile in 2016 and 2014. It was second quartile in 2015. It was third quartile in 2012 and bottom quartile in 2013 and year to date in 2017.

Which raises a thought in my mind - do the comparisons that are made between mainly US based indices and UK based fund performance take account of currency fluctuations?

I did wonder too. I looked at FE analytics which reams of benchmarks on it and the S&P ones were not present.

Sally57

dunstonh wrote: »

Another thing to note is that passive is still an investment strategy.

Vanguard Lifestrategy 60 (a strategy that only uses passives) was top quartile in 2016 and 2014. It was second quartile in 2015. It was third quartile in 2012 and bottom quartile in 2013 and year to date in 2017.


I did wonder too. I looked at FE analytics which reams of benchmarks on it and the S&P ones were not present.

So that's respectable but not great results for VLS60 but I suppose it is quite a low risk fund but I,m sure there will be equivalent active funds that have done better over this period overall?

Also how does that compare with other similar multi asset funds over the same time period and risk strategy - HSBC Global Strategy, Blackrock Consensus and L&G?

[Deleted User]

Hello again all,
It is becoming difficult to follow this thread as it seems to be about types of investments against the opening posts information re Vanguard new offering. Or is it me?
Regards
Billy