Help to understand performance figures

HappyHarry

johnlucas2018 wrote: »

Sorry, just seen the new posts. I think I get this. Discrete year on year performance so it is an increase each year.

Vanguard
01 Jun 2013 to 31 May 2014 = 4.31% (so £50,000 increases to £52,155)
01 Jun 2014 to 31 May 2015 = 11.34% (so £52,155 increases to £58,069)

HL
29/06/13 - 29/06/14 = 8.2% (so £50,000 increases to £54,100)
29/06/14 - 29/06/15 = 7.05% (so £54,100 increases to £57,914)

Sorry for being so stupid but just want to be sure I am looking at performance correctly. In 2015, vanguard 0.74% against HL 8.93% based on a month later appeared a little different.

Thanks

June 2016 was a very important month.

In June 2016 there was the Brexit referendum. The value of sterling fell dramatically against other currencies following the result, and so the value of overseas holdings rose in sterling. Most markets (priced in sterling) rose massively in the last week of June 2016.

johnlucas2018

Ok, thanks for the info.The Brexit things make sense.

The fund grew by 4.31% from beginning June to end of following May. The fund grew 8.2% if looking from end of June to end of Jun.

So, if you had £50,000 invested on 01 Jun 2013, the value would have increased by 4.31% to £52,155 at 31 May 2014. If I was investing in a SIPP with Vanguard then the OCF is 0.22% so the annual charge would be 0.22% of £50,000 which is £110. If I was investing with say HL then I would also pay the extra 0.45% platform charge on the £50,000 which is £225.00

Thanks for your help.

dunstonh

So, if you had £50,000 invested on 01 Jun 2013, the value would have increased by 4.31% to £52,155 at 31 May 2014.

I havent checked your figures but that will just be the fund itself. it will be net of any fund charges. It will not include any platform or product or third party charges incurred outside of the fund. (e.g. not include HL's platform charge)

Vanguard do not currently have a SIPP. If they did, they would have a charge for that. At this time you cannot invest in a pension with Vanguard. you would need a platform.

This fund could would be expected to fall around 25% in value in a period similar to the credit crunch or dot.com period. It's higher US weightings have served it well in recent years but remember that the same period prior to its launch saw the US underperform. So, VLS would likely have been a lower performer on the same asset weightings in that period. VLS is a good multi-asset fund but you do need to remember it has got lucky in timing (launched After the last major market decline (so none of its history includes a major loss period) and only existed during a strong growth period with a heavy weighting to a sector which happens to have outperformed other markets).

So, really do not look at those growth figures and consider them the norm. Be aware of what it can do in both directions.

johnlucas2018

Thanks dunstonh. I am looking to set up a SIPP to pay in around 3K per month and also look to start shifting some cash to stocks and shares ISAs. I am trying to work out the simplest way to buy the minimum no of funds for both SIPP and ISA. I was considering the VLS60 for ISA and I have picked up a number of options for SIPP from reading this forum and various other sources. I did consult an IFA but got the impression that I did not have enough to invest at this stage to make it worth their while which is why I am now going down the DIY route. May well consider IFA again. Thanks again for all your help

AnotherJoe

HappyHarry wrote: »

June 2016 was a very important month.

In June 2016 there was the Brexit referendum. The value of sterling fell dramatically against other currencies following the result, and so the value of overseas holdings rose in sterling. Most markets (priced in sterling) rose massively in the last week of June 2016.

Great spot !