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Why doesn't everyone just buy Vanguard LifeStrategy?

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  • cloud_dog
    cloud_dog Posts: 6,322 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    IT's are investment companies and employ a variety of financial techniques such as borrowing (gearing) and derivatives. This can lead to both big gains and big losses.
    Accepted, as stated in my actual post.
    As a passive investor I avoid ITs as I don't believe the ideas of a board of directors or a manager provide added value...
    Relevance?
    ...and I think they are more prone to failure and fraud than open ended funds.
    The fraud aspect has already been offered by IanSt, and I very much agree.

    In Audaxer's post...
    Audaxer wrote:
    I've initially put most of my income portfolio in funds. I'm just a bit wary of investing too much in ITs as they are shares, and there is risk, albeit slight, that an IT could go bust and you could lose your whole investment in it. I think good income funds will produce the same level of income similar ITs over time.
    ...it was not clear the comment specifically related to the possibility of fraud, and came across as a more general statement that ITs risked the possibility of 100% loss whilst this possibility wouldn't affect OIECs; which is why I raised the question, for clarification.

    I am under no illusions over the heightened risk for an investor in ITs as opposed to OIECs for example but, at their simplest level they are both collective investment vehicles at different levels in the risk scale (and some ITs can be extremely risky, i.e. VCTs/EIS ITs) and it is highly unlikely that a general or income trust/fund would fail due to a comprehensive failure in 100% of their underlying assets, which was the implication of the post.
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • Eco_Miser
    Eco_Miser Posts: 4,850 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Audaxer wrote: »
    Thanks, to give you a SWR of 3% I would have thought you would need maybe a medium risk portfolio for the pot to grow by roughly inflation plus 3% in retirement, so that you don't run out of money?

    When I made the decision to retire I calculated that simply drawing capital would last me to 100+ provided the capital kept pace with inflation, no additional growth. That's ignoring the pensions I could start drawing at 65, which themselves will pay all my bills and basic spending. The actual growth over inflation is just a nice bonus.
    Eco Miser
    Saving money for well over half a century
  • jamei305
    jamei305 Posts: 635 Forumite
    Tenth Anniversary 500 Posts Name Dropper
    Because I believe my portfolio is better.

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

    graph.JPG
  • bigadaj
    bigadaj Posts: 11,531 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper
    jamei305 wrote: »
    Because I believe my portfolio is better.

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

    graph.JPG

    Give it another ten years and a bear market and that graph could be worth reviewing.
  • jamei305
    jamei305 Posts: 635 Forumite
    Tenth Anniversary 500 Posts Name Dropper
    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
    aroominyork Posts: 3,315 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    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
    jamei305 Posts: 635 Forumite
    Tenth Anniversary 500 Posts Name Dropper
    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
    Audaxer Posts: 3,547 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper
    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
    TBC15 Posts: 1,495 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    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
    jamei305 Posts: 635 Forumite
    Tenth Anniversary 500 Posts Name Dropper
    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%
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