HL VS Vanguard Portfolios

billpaul812

This isn't a moan because I fully appreciate that S&S investments can go up as well as down and that is a risk I took, and also that as a newbie investor my daily checks are not reasonable. However I thought I would ask here anyway, why there is such a different between a Hargreaves Lansdown SIPP (Portfolio Plus) investment which has grown steadily over the last month while a Vanguard Life Strategy 60 ISA has dragged its feet and today I notice actually dropped below my original investment.

Would be interested in your own thoughts.

Thanks.

Audaxer

The SIPP is just the wrapper. It is the investments inside it that are important and you can get various portfolios with different risk levels in the HL Portfolio Plus package. A month is too short to judge anyway. The HL Multi Manager funds are costly, and in the long term I would be more confident about the VLS60 producing better returns than an HL Multi Manager portfolio with a similar equity percentage.

msallen

billpaul812 wrote: »

This isn't a moan because I fully appreciate that S&S investments can go up as well as down and that is a risk I took, and also that as a newbie investor my daily checks are not reasonable. However I thought I would ask here anyway, why there is such a different between a Hargreaves Lansdown SIPP (Portfolio Plus) investment which has grown steadily over the last month while a Vanguard Life Strategy 60 ISA has dragged its feet and today I notice actually dropped below my original investment.

Would be interested in your own thoughts.

Thanks.

To be blunt - because they aren't invested in the same things!

ColdIron

HL have 6 Portfolio+ offerings, you would expect the conservative income fund to perform very differently to the adventurous growth fund as they have different objectives and all of them have a different structure to your VLS60. It's an apples and pears comparison with a lot of uncertainty about the apple

Linton

msallen wrote: »

To be blunt - because they aren't invested in the same things!

Exactly. To add a bit more, is the H-L fund at the same level of risk as VLS60? Generally speaking the higher the returns the higher the risk. Another factor could be the value of the £. In recent weeks it has increased significantly against the $ so if the H-L fund had a higher UK% than VLS60 you would expect it to perform better as the value in £ of foreign investments would decrease.

Perhaps you can provide more details on the H-L investment.

In any case comparing investments over a one month time period is meaningless. You need a few years under varying market conditions to do it properly.

billpaul812

I completely accept that a month is too short. To answer the questions: With HL I chose a balanced growth portfolio. They are expensive but so far outperforming the cheaper VLS60 to the extend that it will cover the increased cost. I appreciate that it far too soon though.

dunstonh

owever I thought I would ask here anyway, why there is such a different between a Hargreaves Lansdown SIPP (Portfolio Plus) investment

If I have an apple in one hand and an orange in the other, then I would not expect both of them to taste like apples.

It would help if you told us which one you are investing in with the SIPP. Plus, has the SIPP had its tax relief added?

My guess, as others above, is that you not comparing like for like. Even if you were, one month is pointless to compare as it tells you nothing.

while a Vanguard Life Strategy 60 ISA has dragged its feet and today I notice actually dropped below my original investment.

And in that month, if could have fallen by 25%. Your wording suggests you are not really prepared for the losses yet.

billpaul812

The SIPP hasn't had its tax relief added yet.

I am prepared for losses. Don't forget I am a newbie at this and I bet not alone in checking too often early on.

I am just interested and from reading articles like this from Vanguard, I was just wondering if they were already making excuses.

ValiantSon

billpaul812 wrote: »

The SIPP hasn't had its tax relief added yet.

I am prepared for losses. Don't forget I am a newbie at this and I bet not alone in checking too often early on.

I am just interested and from reading articles like this from Vanguard, I was just wondering if they were already making excuses.

No, they aren't making excuses; that article is based on an economic forecast. If in another month's time your VLS60 has gained in value, but your HL SIPP has lost a bit, will you be questioning whether to just move everything to Vanguard?

I agree with dunstonh, you do seem to be a little unprepared for losses. One month in the market is nothing.

dunstonh

I am prepared for losses. Don't forget I am a newbie at this and I bet not alone in checking too often early on.

It was the way you said "and today I notice actually dropped below my original investment." as if that was unusual or unexpected. You could easily be sitting here saying it was 25% down in that period.

I am just interested and from reading articles like this from Vanguard, I was just wondering if they were already making excuses.

And again, this suggests you are quite not there with the understanding yet.

This is not a dig. Everyone has to start somewhere. However, it is important to understand your own limitations. Vanguard are not making excuses. They launched their funds after the last major crash. So, none of their investors have been in their funds during a sustained negative period. Only during a particularly strong growth period.

A lot of vanguard investors are low knowledge, as they have picked up a lot from the DIY market, and have come to think those gains are normal. Those people are in for a shock if they dont understand that a crash is on its way. It is common sense for the fund house to remind people that the next stage in the cycle is likely to see more volatility and losses and the average return in the short term could be lower than it has been in the recent short term.

Ashen

Even if you completely ignore other factors, the GBP to USD exchange rate has changed by about 5% in the last month. The Vanguard equities are made up much more of US elements - so needless to say what the effect of that is when you're getting fewer pounds for your dollars.