What's wrong with vanguard lifestrategy?

macdady29

Evening all.

I'm a beginner so my knowledge is very limited when it comes to investing but learning all the time through reading books and the vast amount of info posted on here by experienced investors.

I have a small four figure sum invested in a VLS 100 s&s isa and contribute a couple of hundred a month with a view to set and forget for the next 20+ years. I'm 35 this year and understand the risks. So all being well I have decent time frame to invest, recover from multiple bear markets when they come and get a helping hand from compounding.

The question I ask is what's wrong with VLS? The likes of monevator and diy UK investor recommend it. It can't all be bad? I see lots of people recommending it as it's diverse and has the potential to see modest returns in years to come.

Without having to research extensively or actively manage your own funds, this seems like a good starting point for many including myself who might not be deeply interested in the markets and all the jargon that comes with it. VLS seems like a good starting point for those just starting out in their investing journey.

However on the other side of the coin I keep reading the likes of blackrock, L&G Multi Index fund and HSBC Global Strategy!balanced funds being recommended as alternatives because VLS doesn't have the likes of property and is heavily biased to the UK.

Couldn't I for example just have a SIPP with one of the alternative funds running along side to cover the holes in my VLS?

MallyGirl

Yes you could. I have a base of VLS as that is how I started but now I am adding specific funds to address areas that I feel are under represented.

AnotherJoe

You could run other funds alongside but that wouldn’t change VLS’s overconcentration on a handful of U.K. companies and industries. Why not start without that by picking one of the other funds mentioned ?

Audaxer

For the amount you have and intend to invest monthly nothing wrong with VLS alone in my opinion. Also nothing wrong if you want to have some invested in one of the other multi asset funds as my wife and I have VLS and HSBC Global Strategy.

However if you are looking for the equivalent risk level to VLS100, the L&G MI and HSBC Global Strategy funds don't have versions available with 100% equities as far as I am aware.

firestone

as multi asset funds they are popular (very much on here:) ) and do a good job but do wonder with the VLS100 if even with Vanguard whether there are better Global trackers? But would say the idea of another fund in a SIPP is sound as the all your eggs in one basket idea may come into play

Alexland

The whole point of the VLS range is to offer a series of funds at 20% intervals that mix equities (with a UK bias) and bonds (with a government bias).

I don't really see the point of VLS100 when you can get cheaper global equity funds and if you want the UK bias there are cheaper UK funds too. The only reason to pay more for VLS100 is if you are on a platform that charges per transaction to trade so you only want one fund that gives you that global/UK equity mix. Or if you want to benefit from the Vanguard Investor low percentage platform charge.

VLS60 and VLS80 are both very good funds and can be mixed together 50:50 to make 'VLS70' which if launched as a fund would be very successful and probably the best in the series.

Now the problem is VLS will not please every investor at every point in the economic cycle. However in most cases for the average person it's fine, provided they pick one that matches their volatility tollerence.

Personally I decided to hold a lot of HSBC GS Balanced in my SIPP as it is cheaper than VLS60, has more equity and corporate bonds exposure, and I can get very cheap exposure to UK equities and government bonds in my workplace pension.

Alex

macdady29

You could run other funds alongside but that wouldn’t change VLS’s overconcentration on a handful of U.K. companies and industries. Why not start without that by picking one of the other funds mentioned ?

Good question and I'm considering it. With the alternative tracker funds they are actively managed so I presume they cost a little more in fees?

With the ongoing debates around these forums about which tracker funds are best as a passive investor it can sometimes feel like I'm missing out on something.

Alexland

macdady29 wrote: »

Good question and I'm considering it. With the alternative tracker funds they are actively managed so I presume they cost a little more in fees?

HSBC GS Balanced is 0.19% compared to VLS at 0.22% which doesn't sound much until you have six figures invested. All of them have active decisions about strategic asset allocation. There is no passive multi index fund. Decisions need to be made.

macdady29

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For the amount you have and intend to invest monthly nothing wrong with VLS alone in my opinion. Also nothing wrong if you want to have some invested in one of the other multi asset funds as my wife and I have VLS and HSBC Global Strategy.

How are you holding those two funds? SIPP and a s&s isa? Or wife holds one and you hold the other?

Audaxer

macdady29 wrote: »

How are you holding those two funds? SIPP and a s&s isa? Or wife holds one and you hold the other?

We both hold VLS funds in ISAs. My wife has started a SIPP with HSBC Global Strategy Balanced and also invested this year's ISA allowance in HSBC Global Strategy Balanced as well. We currently have a lot more VLS than HSBC so I'm thinking about adding more to HSBC.

Alexland

Audaxer is sitting on the fence on the global Vs UK bias and the corporate Vs government bond debates. The fence is often a good place to be.