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vanguard life strategy

Currently I invest a small monthly amount into VLS 80/20 my question is how much more benefit going the full 100 the risk doesn't bother as this long term, hopefully 20 years.
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  • eskbanker
    eskbanker Posts: 33,487 Forumite
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    The VLS100 involves higher risk and higher reward than the VLS80 (i.e. on average larger increases when funds are rising but steeper falls when they're not) but in terms of quantifying this, on what basis did you make the original decision to plump for the 80 and what's changed since then?

    You can see comparative past performances at https://www.vanguardinvestor.co.uk/what-we-offer/life-strategy-products (and many other sites) that illustrate this. Toggle the switch from 'overview' to 'detailed' to see how this has manifested itself in the past five years, plus the inevitable but accurate comment that "Past performance is not a reliable indicator of future results"!
  • Carmk2008
    Carmk2008 Posts: 157 Forumite
    First time investing so thought 80/20 would be a good starting point, now that I think I won't touching it for about 20 years and should be able to ride out any rough spells I feel as though I may as well go all in.
  • Anonymous101
    Anonymous101 Posts: 1,869 Forumite
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    I've just opted for the VLS100 on the basis that I wanted an aggressive fund that I'd be investing into for 15-20 years. The overall risk profile fits my self assessed requirements. I considered the 80/20 but decided against it as overall i felt the 20% bond portion was a slight safety net that I didn't need and if anything would hold the fund back slightly over the long term.
  • BananaRepublic
    BananaRepublic Posts: 2,103 Forumite
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    The lower the proportion of stock markets investments in a fund, the lower the volatility, making the fund more suitable for someone who might need access to the money in the shorter term. The cost of course is that in the long term the less volatile fund will gain less. If you can leave the money alone for 20 years, the VLS100 makes sense. You can always move your funds into the 80/20, or 60/40 etc as and when you get closer to the date at which you intend to take the money.

    My savings are currently in roller coaster funds, but in ten years or so I will start to move them into less 'exciting' funds.
  • economic
    economic Posts: 3,002 Forumite
    edited 25 May 2017 at 3:51PM
    why not just buy VLS100 and hold the amount you would have put in the bond part as cash instead? so if you wanted VLS80, buy 80% of the money in VLS100 and 20% in cash. with rates still low, long term i just dont see the benefot of having any bonds. there is a high chance of the bond part being eroded away by inflation AND MTM losses over the 20yr period vs cash which will only be eroded by inflation. just my view anyway. i never touch bonds. even my parents at 60+ i would never have them touch bonds.
  • Carmk2008
    Carmk2008 Posts: 157 Forumite
    @ anonymous this is what I am thinking would rather have extra growth as the 20% buffer in bonds.

    @ bananarepublic I fully intend not to touch this for 20 years and as its a modest monthly payment I see no reason why I should have to.

    @ economic I also pay into regular savers so don't see the point in holding as cash.

    Just as a rough example I am currently getting a return of over 5% on the 80/20 what would I expect on the 100 providing they are both performing the same.
  • Linton
    Linton Posts: 17,730 Forumite
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    Carmk2008 wrote: »
    ......
    Just as a rough example I am currently getting a return of over 5% on the 80/20 what would I expect on the 100 providing they are both performing the same.

    From Trustnet:
    VLS100: 0-12m: 32.1, 12-24m:-3.1,24-36m:15.8
    VLS80: 0-12m: 26.1, 12-24m:-1.6,24-36m:13.9
  • economic
    economic Posts: 3,002 Forumite
    Carmk2008 wrote: »
    @ anonymous this is what I am thinking would rather have extra growth as the 20% buffer in bonds.

    @ bananarepublic I fully intend not to touch this for 20 years and as its a modest monthly payment I see no reason why I should have to.

    @ economic I also pay into regular savers so don't see the point in holding as cash.

    Just as a rough example I am currently getting a return of over 5% on the 80/20 what would I expect on the 100 providing they are both performing the same.

    if you really dont need it for 20yrs just stick it all in VLS100.
  • Audaxer
    Audaxer Posts: 3,547 Forumite
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    Carmk2008 wrote: »
    Just as a rough example I am currently getting a return of over 5% on the 80/20 what would I expect on the 100 providing they are both performing the same.
    I'm surprised you are only getting a return of about 5% as TrustNet shows that the VLS80 has gained over 83% in 5 years!

    No problem in going to a VLS100 if you can stand bigger losses in the event of an equity crash without panicking and selling.
  • Carmk2008
    Carmk2008 Posts: 157 Forumite
    I only started this year, it was up at nearly 9% at one point and it is going up again from last month. If I get anywhere near 83% in 5 years I will be very happy.l
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