Fund and broker advice please

eskbanker

dunstonh wrote: »

Personally, I would use Vanguard even though its cheaper because you are forcing yourself to use one fund house. If you are cautious (VLS40 end) then the risk targetted alternatives may well be better.

Isn't that first sentence missing a rather important 'not', reversing the meaning?!

dunstonh

I thought that VLS was risk targeted by selecting VLS over 80 for example?

No. VLS is returns focussed. Not risk targetted. Risk targetted funds aim to keep the fund within a certain volatility range. They adjust their weightings in the different assets, regions etc to meet that. VLS has rigid allocations.

Is HSBC Global Strategy a good alternative?

Depends on which risk version you are looking at. However, they are risk targetted. Sorry, I am not coming straight out with it but I am regulated and cannot give you the answer you want to hear. The FCA treats forum posts the same as advice. So, if I said to you that you should use xyz, the FCA would consider that regulated advice. Other forum posters who are not regulated can say what they like without that constraint.

Now I am stumped. I thought VLS was a good buy for the novice investor?

It meets that criteria. However, it's not the only option and in choosing your variety of tomato, you may prefer a different shade of red or slight variation of flavour.

bostonerimus

dunstonh wrote: »

It meets that criteria. However, it's not the only option and in choosing your variety of tomato, you may prefer a different shade of red or slight variation of flavour.

I can see people starting to be paralyzed by choice here......when we are looking at multi-asset funds from the likes of Vanguard, HSBC etc it's more important that you invest than the exact fund you end up buying. The financial pundits push choosing the "right fund" as they make money that way.

I would advocate that you buy VLSxx (depending on your risk tolerance) directly from Vanguard. As a novice having a reduced selection of funds is useful as it stops you from getting confused; Vanguard has more than enough choice. If you ever want to adjust your asset allocation you can but a Vanguard fund with either more bonds or equities...it really is quite simple.

Stirfry

As a new investor I hold VLS60 and HSBC Life Strategy Balanced as part of my Portfolio. In my experience when one moves up slightly the other moves down, so not a lot in it except if you have an opinion on how much should be invested in the UK.
I invested 50k in HSBC in one go but with hindsight wish I had spread it in 10k lumps over a few weeks. You do not know the price you will get when you place the order.
They are the most stable part of my portfolio. I also intend to leave the HSBC fund for 10 years before I draw on it.
I have started investing late and am still discovering my risk appetite as I think it changes with experience good and bad.
Im with IWeb.
This is not a recommendation justly personal experience but I hope it encourages you to take the plunge. Good luck.

bowlhead99

havingaball74 wrote: »

I thought that VLS was risk targeted by selecting VLS over 80 for example?

Not quite.

With VLS it's performance targeted, you decide whether you would like to get the performance of 80% equities or 60% equities or 40% equities in a fixed ratio with bonds, and accept their standard split of having a quarter of the equities being UK stock market and three quarters international. And as markets go up and down they will continue to rebalance the fund to go back to the advertised split, to keep delivering the performance of 40% equities or 80% equities or whatever you signed up for.

With HSBC Global Strategy Portfolios they target a particular level of 'risk', eg their Balanced equates to a long term volatility of 9.5%, and falling into the '5' a range on Distribution Technology's risk scale (long term - short term may differ s bit). They will make an overall general allocation and then periodic tactical decisions, and keep re running the portfolio analysis periodically to stay in the DT risk bracket. A rival fund, L&G Multi Index 5, does the same thing (i.e. aiming for 5 on DT's scale).

So you could say Lifestrategy is performance targeted and HSBC GSP or L&G MI are risk targeted.

You are right that more equities correlates to more risk, so if you want to step up and down the risk scale with Vanguard, you can (by going 40 to 60 or 80 our the other way), and it is simple to think about risk as being how much equities you have compared to bonds. But there are some nuances to it, and 60% bonds today won't necessarily have the same risk profile as 60% bonds at a different part of the economic cycle, and there are different types of bonds available of course. And what about things that aren't equities but aren't bonds either, like property or infrastructure?

So if you were a newbie looking to limit your risk you might prefer a fund branded Cautious or Balanced, to a fund which promises you whatever the performance of 20% or 40% or 60% equities and 80, 60, 40 bonds, happens to be.

Still, as Dunstonh mentions, the different fund ranges can give broadly similar results for the amount of risk you take, so it's more like comparing varieties of tomatoes. Or at least, comparing some sort of fruit/veg to another type of fruit/veg in that part of the supermarket ; it's not like going into a shop and tossing up between a tomato and a fish, or a tomato and an ironing board.

Are iWeb and Halifax whole of market platforms?

Whether or not they are literally the whole market, they allow you a decent range from most of the big fund houses you might want (including the HSBC and Vanguard funds you mention). Whereas if you use Vanguard's own platform you can't then buy an HSBC fund in their ISA wrapper, and vice versa.

Both of them allow you to access HSBC and Vanguard products

Now I am stumped. I thought VLS was a good buy for the novice investor?

It's not a bad buy. You just have to understand what you want and compare that to what you are buying. As Boston said, buying Vanguard via Vanguard can be fine. Though if you have a large value and are not trading frequently, you may prefer a fixed fee provider with the odd transaction fee, to paying 0 15% on your overall value.

BLB53

Personally I like the VLS range and hold most of my portfolio in the VLS 60 which is a good 'middle of the road' option. I also hold a few investment trusts but if I had to choose just one investment it would be the Lifestrategy.

If I also opened a HSBC Global Strategy, is there much difference between the conservative and balanced portfolio?

Here's an article on the DIY investor site comparing the two funds
http://diyinvestoruk.blogspot.com/2017/06/a-look-at-hsbc-global-strategy-fund.html

cloud_dog

OP, the more information provided the more, hopefully better opinions can be provided.

kidmugsy wrote: »

If you hope to retire early can you explain why you are investing in an S&S ISA rather than a personal pension of some sort?

Can you provide some feedback on this post.

schiff

In terms of 'risk' for someone who in theory should take less risk (age) how does the Schroder Sterling Corporate Bond C Inc stack up?

Computer_Beginner

AnotherJoe wrote: »

Unless you plan to buy an annuity immediately you retire (very unlikely these days)
ion.

My understanding is that the change is due to low annuity rates, due to low interest rates.
But the times we live in now are historically very unusual.
The situation could have reverted to more normal rates in 15-20 years.

But then again, it may not.

havingaball74

kidmugsy wrote: »

If you hope to retire early can you explain why you are investing in an S&S ISA rather than a personal pension of some sort?

That is a really good question which I hadn’t thought about. I just assumed I would take the reduced pension at 57 and fund it, if necessary, with money from the stocks ans shares ISA. I may not retire before 60 but it would be nice if the investments stack up. Is it worth opening a SIPP then just in case or stick to the teacher pension and investments/savings?