Why doesn't everyone just buy Vanguard LifeStrategy?

bigadaj

jamei305 wrote: »

Because I believe my portfolio is better.

A - My Strategy 90% Equity
B - Life Strategy 100% Equity
C - Life Strategy 80% Equity

Give it another ten years and a bear market and that graph could be worth reviewing.

jamei305

bigadaj wrote: »

Give it another ten years and a bear market and that graph could be worth reviewing.

It was designed to outperform LifeStrategy 100 in a bear market and match it in a bull market, so it will certainly be interesting to see how it does.

aroominyork

jamei305 wrote: »

It was designed to outperform LifeStrategy 100 in a bear market and match it in a bull market, so it will certainly be interesting to see how it does.

Without asking you to list your holdings now and in the past, it would be interesting to know your key strategies/tactics in constructing a portfolio to achieve that aim.

jamei305

aroominyork wrote: »

Without asking you to list your holdings now and in the past, it would be interesting to know your key strategies/tactics in constructing a portfolio to achieve that aim.

Here are my holdings, you can probably guess the rationale

Legal & General International Index
Legal & General European Index
Legal & General Pacific Index
Fundsmith Equity
First State Global Listed Infrastructre
Worldwide Healthcare Trust
M&G Strategic Corporate Bond
Baille Gifford Japanese Smaller Companies

I recognise it may well underperform LifeStrategy in some circumstances, but I doubt it will persistently do so to such a significant degree that I lose sleep over it, and it is a whole lot more interesting managing it.

Audaxer

jamei305 wrote: »

Here are my holdings, you can probably guess the rationale

Legal & General International Index
Legal & General European Index
Legal & General Pacific Index
Fundsmith Equity
First State Global Listed Infrastructre
Worldwide Healthcare Trust
M&G Strategic Corporate Bond
Baille Gifford Japanese Smaller Companies

I recognise it may well underperform LifeStrategy in some circumstances, but I doubt it will persistently do so to such a significant degree that I lose sleep over it, and it is a whole lot more interesting managing it.

If you don't mind me asking, it would also be interesting to know what percentages you have in each and whether over the past 5 years you have regularly rebalanced back to these percentages.

TBC15

jamei305 wrote: »

Here are my holdings, you can probably guess the rationale

Legal & General International Index
Legal & General European Index
Legal & General Pacific Index
Fundsmith Equity
First State Global Listed Infrastructre
Worldwide Healthcare Trust
M&G Strategic Corporate Bond
Baille Gifford Japanese Smaller Companies

I recognise it may well underperform LifeStrategy in some circumstances, but I doubt it will persistently do so to such a significant degree that I lose sleep over it, and it is a whole lot more interesting managing it.

Do you fancy taking part in the Great British Invest off?
https://forums.moneysavingexpert.com/discussion/5719517

jamei305

Audaxer wrote: »

If you don't mind me asking, it would also be interesting to know what percentages you have in each and whether over the past 5 years you have regularly rebalanced back to these percentages.

I don't see the point of annual rebalancing because the original percentages were not carefully calculated. I didn't think "Oh I must definitely have 7% WWH because 8% would be totally inappropriate". So if WWH reaches 8% I don't have any pressing need to reduce it back to 7% before another 12 months passes. Neither is there any reason to think that just because it has grown more than the average of the rest of my portfolio, it will be more likely than the rest to drop back again.

I do rebalance to some degree when I add a new lump sum and have to decide how it is allocated. I do this to maintain my overall strategy rather than chase specific percentages.

Currently I have this:

Legal & General International Index 22%
Legal & General European Index 15%
Legal & General Pacific Index 10%
Fundsmith Equity 11%
First State Global Listed Infrastructure 11%
Worldwide Healthcare Trust 7%
M&G Strategic Corporate Bond 10%
Baille Gifford Japanese Smaller Companies 12%

Audaxer

jamei305 wrote: »

I don't see the point of annual rebalancing because the original percentages were not carefully calculated. I didn't think "Oh I must definitely have 7% WWH because 8% would be totally inappropriate". So if WWH reaches 8% I don't have any pressing need to reduce it back to 7% before another 12 months passes. Neither is there any reason to think that just because it has grown more than the average of the rest of my portfolio, it will be more likely than the rest to drop back again.

I do rebalance to some degree when I add a new lump sum and have to decide how it is allocated. I do this to maintain my overall strategy rather than chase specific percentages.

Currently I have this:

Legal & General International Index 22%
Legal & General European Index 15%
Legal & General Pacific Index 10%
Fundsmith Equity 11%
First State Global Listed Infrastructure 11%
Worldwide Healthcare Trust 7%
M&G Strategic Corporate Bond 10%
Baille Gifford Japanese Smaller Companies 12%

Thanks. If the original investment in your portfolio has grown 120% in the 5 years and you have kept to 90% equities, then presumably you must have had to do some rebalancing by selling some of the equities and buying more of the M&G bond fund, or the bond percentage would have fallen well below 10%? If you have lodged additional lump sums in the 5 year period, has the total amount you have invested during that time risen by 120%?

capital0ne

Murmansk wrote: »

I'm fairly new to this investing thing and have a fair amount of cash invested in Vanguard LifeStrategy funds. In the three weeks or so that I have had them they seem to have gone up nearly 2%.

I've been reading a lot about investing both online and in the books that I have seen frequently recommended.

I've concluded that "passive investing" is the way to go and all the research seems to point to the fact that you might as well just use tracking funds and find a ones with low charges - hence Vanguard for me.

I've come to the rather cynical conclusion that financial advisers might be a breed who make their money from people who have lots of money but haven't the time or inclination to do a bit of research - and people who haven't worked out that you don't need to worry about all the complexity.

It seems to me that there is something of an "open secret" about Vanguard LifeStrategy in that they are great but the industry doesn't want everyone to know this because they'd all be out of a job!

I'm wondering what people on here think of this?

It's because they think they can do better is one reason, probably can't.
They think they know more, probably not but they don't realise that.
They don't have the time, knowledge or experience to buy anything else, the most plausable reason.
It was recommended by a professional who with due diligence it was the best solution for their customers requirements.
Or many other reasons

zoebel

Assuming the basic premise of Vanguard LS is sound (low fees, diversification), my only concern is fees.

As I understand it, the fees on the LS are 0.22%. If you had, say, a Vanguard All World fund at 60% weighting and a Vanguard All World bond fund at 40% weighting, I would guess that the overall fees would be less than 0.22% overall. So, would that make it a better choice, seeing as the consensus amongst experts it that it isn't so much the choice of fund that is important, but rather asset allocation and FEES?