Vanguard Target Retirement 2055 Fund

Zola.

Maybe I am missing something, but is there a way to see what makes up this fund? I dont see it, other than the 80/20 split of equities and bonds

http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000X4GG

Is it very similar to Life Strategy 80?

Finally, is it a pension you would trust, being so new etc ?

Linton

https://www.vanguard.co.uk/uk/portal/detail/mf/overview?portId=9673&assetCode=BALANCED##overview

Zola.

Cheers Linton!

Zola.

I don't see a vast difference in this package to LS80 at least early on.

Comparing the two some of the bigger chunks are pretty similar

Vanguard FTSE Developed World ex-U.K. Equity Index Fund Accumulation Shares 19.6% / 17.1%

Vanguard FTSE U.K. All Share Index Unit Trust GBP Accumulation Shares 15% / 18.4%

Vanguard Global Bond Index Fund Pound Sterling Hedged Accumulation Shares 14.1% / 13.8%

Main difference is the use of VG FTSE Developed World in one, and VG FTSE Developed Europe in the other.

I am researching a 'set and forget' pension for my partner, but together we already invest each month into LS80... we like the product, but would you consider this unwise as it seems relatively similar at this stage at least?

BLB53

I am researching a 'set and forget' pension for my partner, but together we already invest each month into LS80... we like the product, but would you consider this unwise as it seems relatively similar at this stage at least?

The main advantage is the gradual reduction in equities as you move closer to retirement so better for 'hands off' as you don't need to bother with asset allocation.

Slight downside is slightly higher charges 0.24% compared to 0.22% for Lifestrategy but that may well come into line over time.

Zola.

Yeah thats what I was thinking as well.

Would anyone have any concerns about investing in too similar baskets?

Pincher

It's for people who can't be asked to rebalance themselves.
Vanguard probably just re-allocate the units they have in other funds they hold already.

If you want to fiddle with it, just buy whatever you want.

Linton

Zola. wrote: »

Yeah thats what I was thinking as well.

Would anyone have any concerns about investing in too similar baskets?

No concerns, it's just totally pointless. If you want a second fund, invest in something that isnt well covered by VLS80.

Since you appear to have so long to go until retirement I cant see why you should want a targetted fund. Eventually if you choose to drawdown rather than buy an annuity you probably wouldn't want to seriously de-risk at retirement date. Or you may want to retire early. So I suggest you keep in VLS80 or VLS100 and reconsider in 25 years time.

ARH_2

Linton wrote: »

Since you appear to have so long to go until retirement I cant see why you should want a targetted fund. Eventually if you choose to drawdown rather than buy an annuity you probably wouldn't want to seriously de-risk at retirement date. Or you may want to retire early. So I suggest you keep in VLS80 or VLS100 and reconsider in 25 years time.

Hi Zola,

I agree with Linton. With so long to go until retirement, common wisdom is that you (we) should be fully into equities at this stage, moving into bonds as we approach retirement in order to reduce risk.

I'm investing into LifeStrategy 100 as we know that over the long term we're talking about, equities deliver better returns than bonds.

I'm also considering investment trust(s) as the literature seems to suggest these do better than open funds over the long term, but I need to do some more reading to fully understand these.

coyrls

ARH wrote: »

I'm also considering investment trust(s) as the literature seems to suggest these do better than open funds over the long term, but I need to do some more reading to fully understand these.

"The literature" is wrong, what open ended funds were compared to what investment trusts to reach that conclusion? If it was as simple as that, how could open ended funds continue to exist?

dunstonh

I'm also considering investment trust(s) as the literature seems to suggest these do better than open funds over the long term, but I need to do some more reading to fully understand these.

What literature is that and how up-to-date is it and what caveats does it include to cover all the cases when the equivalent IT fails to outperform?

In general, the "equivalent" IT to an OEIC is higher risk. The degree of higher risk is not consistent. It could be down to the NAV and the level of premium/discount. It could be down to the level of gearing.

Until 2013, OEICs used to be bundled in pricing whereas ITs were unbundled. This made ITs cheaper (in isolation of the other bits). Now that both are unbundled, the costs are broadly similar and you can find examples in both universes where one is cheaper than the other. Cost is no longer a drag on OEICs.

It is far too simple to say that ITs are better than OEICs.