Alternatives to Vanguard Life Strategy 60

_pete_

Hi

I currently hold Vanguard LS60 in a SIPP and, for reasons too complicated to go into, I would like another similar fund. I'm medium risk investor reliant on passive trackers - and I'm happy with this approach.

I've heard people talk about HSBC and ?Legal and General? global trackers but I'm not sure which is the precise product which is similar to the Lifestrategy 60 in terms of constituent parts of the fund.

Any pointers would be much appreciated.

:beer:

AlanP_2

Have a look at the HSBC Balanced Dynamic (one of 3 they offer with differing equity levels) and the L&G Multi-Index range (1 -7 on offer).

Blackrock also do something similar I believe but I haven't looked at those.

BLB53

You may be interested in HSBC Global Strategy funds. Here's a recent article on DIY Investor comparing the fund with Lifestrategy
http://diyinvestoruk.blogspot.co.uk/2017/06/a-look-at-hsbc-global-strategy-fund.html

The 'balanced' option would be the nearest to LS 60.

fwor

I used the advice in this thread:

https://forums.moneysavingexpert.com/discussion/5650117

You obviously won't find one that's ~exactly~ equivalent to LS60, because each variant has a slightly different regional allocation, for example - so you have to take these slight differences into account. I actually found that quite useful as I personally wasn't completely happy with the regional bias of the Vanguard product.

bowlhead99

The Lifestrategy fund has a very specific objective of always holding 60% of its assets in equity indexes and 40% of its assets in a mix of bond indexes. And since the last time they changed it, they aim to keep 25% of their equities (ie 15% of the overall fund) in UK-tracking indexes. It doesn't publish a specific target for the ratios of other subcategories within bonds or within global developed/emerging market equities.

Due to its strategy you could say it is a 'performance targeted" fund, in that it's aiming to deliver the result of whatever performance you get from the (15:45):40 mix of indexes i.e. (UK equity: rest of world equity): bonds.

You can make the assumption that particular Lifestrategy fund will be lower risk or less volatile than their Lifestrategy 80 or Lifestrategy 100 products which have more equities while being higher risk / more volatile than than Lifestrategy 40. However in delivering the performance of those fixed-ish allocations, it is not targeting a particular 'absolute' level of risk because the relative volatilities and returns from different asset classes can change over the course of an economic cycle and between cycles.

By contrast, something like "L&G Multi Index 5" holds a mix of investments (predominantly in index funds but also in their direct real estate fund and a bit of cash) with a target risk level of 5 on a scale of 0 to 10. Based on the computations and risk models they buy in from a third party from time to time, they will be free to change the mix of equities to bonds to property, domestic to international, region to region, different bond types etc.

As such, L&G MI 5 is risk targeted rather than performance targeted because it's not saying, "give me the exact performance of x% this and y% that through think and thin", it's saying, "give me a medium risk portfolio through thick and thin, and the performance will just be whatever it will be"

So, L&G MI 5 or MI 6 might happen to have a similar snapshot of holdings to a Lifestrategy 60 at a given point in time but they will have the possiblity to vary the holdings by asset class, country, currency etc to maintain your moderate/medium risk preference as those asset classes go through different sets of global economic circumstances and challenges etc.

For a "medium risk investor reliant on passive trackers" one would think Legal and General Multi Index 5 would be right up your alley, as that is pretty much what it says on the tin. Of course "medium" might mean different things to different people. It also comes in Inc or Acc variants. For lower risk there's "4", for higher risk you could do "6" or "7".

For people targeting a higher level of ongoing income at the expense perhaps of capital growth, there is an L&G Multi Index Income fund which also comes in Inc and Acc variants and a numbered series with 5 in the middle of the risk scale. Don't confuse Multi Index (Inc variant), with Multi Index Inome (Inc or Acc variant) as they are products with different objectives..

Elijah_Bailey

BlackRock Consensus is another range to consider (five different funds - 35, 60, 70, 85 and 100). The L+G Multi-Index range do not seem to concentrate on the UK bias as much as Vanguard but that will suit some and not others.

Every fund house operates different way of maintaining the equity levels so it may be helpful to read up on their websites.

Monevator.com is a goldmine for information.

_pete_

Thank you very much indeed for the helpful replies, and links (and the super-speedy responses).

I shall investigate further.

Thank you again.

Audaxer

bowlhead99 wrote: »

By contrast, something like "L&G Multi Index 5" holds a mix of investments (predominantly in index funds but also in their direct real estate fund and a bit of cash) with a target risk level of 5 on a scale of 0 to 10. Based on the computations and risk models they buy in from a third party from time to time, they will be free to change the mix of equities to bonds to property, domestic to international, region to region, different bond types etc.

As such, L&G MI 5 is risk targeted rather than performance targeted because it's not saying, "give me the exact performance of x% this and y% that through think and thin", it's saying, "give me a medium risk portfolio through thick and thin, and the performance will just be whatever it will be"

Does that mean that the volatility of L&G Multi Index funds is likely to be less than that of an equivalent level VLS fund in the event of an equity crash?

The HSBC Global Strategy Balanced fund is probably nearest in asset allocation (although it has less UK equity and has some property) and previous performance to the VLS60, but it also appears to have some active management as the details in Trustnet say:
"The ACD may, where it considers appropriate to do so, also use direct investment in assets in circumstances where, in its opinion, an asset class can be adequately replicated with a relatively low number of instruments. It may also invest, at its discretion, in other collective investment schemes, transferable securities, money market instruments, deposits, cash and near cash. On giving 60 days' notice to Shareholders, the Fund may, in addition to its other investment powers, use exchange traded and over the counter derivatives and forward currency contracts for investment purposes."
I'm not sure if this is similar to the sort of management involved in the L&G Multi Index funds.