Vanguard direct to customer offering confirmed

racey

EdSwippet wrote: »

It was also a top half performer in three of the last six years.

Mathematically, this outcome is entirely consistent with something that aims for the average. It should surprise nobody.

Good point :T

jamesd

MarcoM wrote: »

Am I correct in saying that a vanguard lifestyle fund held under HL ISa is more expensive than the same with Vanguard directly?
Value 100k.

No, Vanguard's more expensive if you just want to match the asset allocation. The HL ISA has a cap of £45 on the holding cost of ETFs so you'd pay £45 to HL or £150 to Vanguard. But if you want the branded Vanguard LifeStrategy funds those aren't available in an ETF version so Vanguard will be cheaper.

jamesd

TheTracker wrote: »

Simply clever marketing. Vanguard launch a platform at ⅓ the cost but only sell vanguard products. HL sow FUD around their flagship product. Zero cost salvo. 12 months time and HL will be ⅓ cheaper than today... the war is just beginning.

Vanguard haven't launched a product at a third of the cost, it's more expensive much of the time.

Outside any tax wrapper HL has 0% charge for ETFs, Vanguard charges 0.15% with £375 cap.

Inside an ISA HL charges 0.45% with £45 cap for ETFs and Vanguard charges 0.15% with £375 cap.

Which is cheaper depends on inside or outside ISA, amount invested and whether ETFs are suitable as well as trading frequency.

koru

EdSwippet wrote: »

It was also a top half performer in three of the last six years.

Mathematically, this outcome is entirely consistent with something that aims for the average. It should surprise nobody.

To be fair, the Lifestrategy funds are a mix of different indexes and the weighting is not the same as the average for the Mixed Investment fund sector. They largely follow market weightings, but are heavily overweight on the UK market. So its results won't necessarily be average for the sector.

But I agree, this is a transparent and petty attempt to steer investors away from a company that dares to compete with HL. No doubt there will be a time when being underweighted to the US market will turn out to be good, but surely the lesson of the last six years is that it is almost impossible to know when that time has come. His logic is staggering: It turned out that following the market weighting for the US has been a good decision since LS was created in 2011, so better switch to the guys who got it wrong for the last 6 years. Why, exactly? Because they can't keep getting it wrong for ever?

I look forward to seeing him apply the same logic to, say, Lindsell Train UK Equity: "Nick Train has made some great stockpicking decisions, but sooner or later he will turn out to be wrong, so better disinvest now."

koru

jamesd wrote: »

No, Vanguard's more expensive. The HL ISA has a cap of £45 on the holding cost of ETFs so you'd pay £45 to HL or £150 to Vanguard.

But the Lifestyle funds are not ETFs. There's no cap on HL's fee for holding Lifestyle funds.

eskbanker

jamesd wrote: »

No, Vanguard's more expensive. The HL ISA has a cap of £45 on the holding cost of ETFs so you'd pay £45 to HL or £150 to Vanguard.

But what does HL's ETF cap have to do with holding Vanguard LifeStrategy (assuming that's what the questioner meant by 'lifestyle fund')?

koru

jamesd wrote: »

Vanguard haven't launched a product at a third of the cost, it's more expensive much of the time.

For ETFs, yes.

jamesd

eskbanker wrote: »

But what does HL's ETF cap have to do with holding Vanguard LifeStrategy (assuming that's what the questioner meant by 'lifestyle fund')?

Depends whether you want to hold the Vanguard LifeStrategy funds or ETFs and funds with comparable asset allocations.

If you want to the Vanguard LifeStrategy funds the higher HL cap for funds will make Vanguard cheaper for £100,000 invested. If you match the allocations the HL cap for VCTs can make HL cheaper.

koru

jamesd wrote: »

If you want to the Vanguard LifeStrategy funds the higher HL cap for funds will make Vanguard cheaper for £100,000 invested.

It will be cheaper for any amount invested in the LS funds. 0.15% vs 0.45% (or 0.25%, above £250k)

hugo15

I've started the process of transferring from HL to Vanguard. Is it possible to leave the HL account open but dormant to avoid the £25+VAT closure fee?