Questions on Using Vanguard Life Strategy

Cactus_Jack

Eco_Miser wrote: »

Any fund allocating regions by market cap will have a large exposure to the US. VLS deliberately overweights the UK, so will actually be underweight in the US.

I'm happy with my LifeStrategy 100% investment but this is the one thing that bothers me. I would much rather be overweight in US equities and dial back the UK equities to a level that better reflects the size of the UK stock market.

Does anyone know what I can do to rectify this?

Audaxer

Cactus_Jack wrote: »

I'm happy with my LifeStrategy 100% investment but this is the one thing that bothers me. I would much rather be overweight in US equities and dial back the UK equities to a level that better reflects the size of the UK stock market.

Does anyone know what I can do to rectify this?

Have a look at the HSBC Global Strategy range of funds which like VLS are also funds of mainly passive indexes. They have more US equities and much less UK equities to reflect the size of world markets.

dunstonh

Cactus_Jack wrote: »

I'm happy with my LifeStrategy 100% investment but this is the one thing that bothers me. I would much rather be overweight in US equities and dial back the UK equities to a level that better reflects the size of the UK stock market.

Does anyone know what I can do to rectify this?

Use a different fund that achieves your investment wishes. At the moment, you are compromising.

TheTracker

Cactus_Jack wrote: »

I'm happy with my LifeStrategy 100% investment but this is the one thing that bothers me. I would much rather be overweight in US equities and dial back the UK equities to a level that better reflects the size of the UK stock market.

Does anyone know what I can do to rectify this?

You could use a different multi-asset fund with a different allocation strategy, though the other aspects of the alternate allocation strategy might raise other concerns to you.

Or you could add a Developed World ex-UK tracker in the proportion you wished to adjust the home bias. of course, you'd then need consider dialling down from VLS80 to VLS60 eg as you'd be upping your equities. That said, you might like that granular equity setting. And you'd need to rebalance yourself. So, not a straightforward option, and at this point you might fall into a category of investor that builds their own portfolio of trackers, but to do that you need to make decisions about such an allocation and have enough heft to warrant any additional trading costs. But you did ask what you could do ...

yorkiebar

Consider VWRL for a more diversified portfolio.

bostonerimus

Cactus_Jack wrote: »

I'm happy with my LifeStrategy 100% investment but this is the one thing that bothers me. I would much rather be overweight in US equities and dial back the UK equities to a level that better reflects the size of the UK stock market.

Does anyone know what I can do to rectify this?

You should only be investing money in funds that you don't expect to use for 10, 20 or 30 years. If you think you'll need the money before that stick with saving products that guarantee your principal and give you easy access to your money.

If you don't like the VLS weighting then look at some different multi-asset funds or just buy a global equity index like VWRL and something like Vanguard Global Bond Index in the ratio you want.

JSCB

badger09 wrote: »

OP

Apologies if I've missed it, but I don't see any discussion about pension provision. Have you considered this?

The benefit would probably be free money from your employer, plus the bonus of tax relief.

I'm not suggesting all your savings should go into your pension, but some almost certainly should.

Hi Badger09,

Thanks for responding! Didn't mention pensions in this thread at all having kind of already settled on it through discussion on another.

While I don't have much interest in pensions right now, as I'm already juggling work plans for the future, paying off my student loan, starting in shares, saving for a deposit in a Lifetime ISA etc. and pensions feel a bit distant, it was brought to my attention in the other threads I've read and discussed it on that achieving financial independence young is easier knowing you're already secure for after you retire at 60+, and therefore I do still see the importance of considering them.

With both that and my current commitments in mind, I was thinking that once I'd saved up for and used the Lifetime ISA for a first home in a few years, I could from then carry on putting the same £4k per year away that I am now into the lifetime ISA still or a SIPP.

Since I'm not a million miles away from the higher rate tax bracket either, if a good year comes where I go over (since I'm self-employed and each week, month, year varies), I'll open a SIPP and put the excess into it on top as well.

Does this sound like a credible plan to you or any changes you'd suggest to consider?

Would be starting at around age 23 with 4k plus bonus, so 5k per year put into Lifetime or SIPP on basic rate bonus, approx 12.5% of annual income, plus any excess into a SIPP over the higher rate for the odd year here or there.

This is all of course completely separate to any share investments made (as was being discussed above) which is to go towards gaining early FI and not traditional retirement at post 60.

badger09

JSCB

I've just had a quick read through your other threads and am impressed by your attitude to money, savings, investment etc at 21. Hope that doesn't sound patronising:o

I see you are considering pensions, which is what I thought was missing from this thread.

Your plan to continue using LISA after house purchase makes sense, up to age 50. Paying excess earnings (over BR tax) into a SIPP is obviously a no brainer. Any other investments you can make before age 50 would probably be better in a normal S&S ISA for additional flexibility.

Good luck on your journey to FI:)

JSCB

Badger09,

Not patronising at all, quite nice to know really as sometimes I wonder whether my thoughts and views are even a bit over the top for my age!

Thanks for your opinions and advice!