Vanguard Lifestrategy Funds

jim8888

I have most of my DC pension sitting in a Vanguard 80/20 Lifestrategy Fund. I'm 55, not drawing down any yet and the fund totals just over £500k (I also have another DB pension that I've not yet taken, so I'm not totally reliant on the DC one.)
I read on an investment thread that having this amount of cash sitting in the one fund isn't particularly "wise". I used to have the cash spread across about 10 funds (picked DIY) but increasingly felt that I had no idea why I'd picked them and clueless as to how they might perform going forward. I was too tight to ask an IFA for an opinion on reallocation, so I stuck it all in the Vanguard fund.
Given that I'm not the swashbuckling trader that I once suspected I might be, and want a bit of security, is the Vanguard choice a good one?

KonkyWonky

If security is a concern then VLS 80 may be a little high for your tolerance levels. It will perform better than VLS 20, VLS 40, VLS 60 in good times but when the inevitable correction or crash hits it will lose significantly more value. It's not beyond the realms of possibility you could lose 30% of your total pot overnight in the event of a crash.

Clive_Woody

jim8888 wrote: »

I have most of my DC pension sitting in a Vanguard 80/20 Lifestrategy Fund. I'm 55, not drawing down any yet and the fund totals just over £500k (I also have another DB pension that I've not yet taken, so I'm not totally reliant on the DC one.)
I read on an investment thread that having this amount of cash sitting in the one fund isn't particularly "wise". I used to have the cash spread across about 10 funds (picked DIY) but increasingly felt that I had no idea why I'd picked them and clueless as to how they might perform going forward. I was too tight to ask an IFA for an opinion on reallocation, so I stuck it all in the Vanguard fund.
Given that I'm not the swashbuckling trader that I once suspected I might be, and want a bit of security, is the Vanguard choice a good one?

I am no expert either, but you could potentially shift some of you fund into a VLS 40 or VLS 20 fund to safeguard it a bit from significant changes, with the intention of using this first when you retire and leaving the rest to continue growing.

VG do also offer a Target Retirement Fund that will effectively do this kind of thing for you reducing risk as you approach retirement age.

Your decision should be influenced by how you plan to fund your retirement - i.e. cash in your DC pot and buy an annuity (not what I would do, but I am in no way qualified to offer advice) or take a draw down approach to support your DB pot.

If the later of the two options you may want to keep a decent chunk of your investments invested to continue growing.

dunstonh

I read on an investment thread that having this amount of cash sitting in the one fund isn't particularly "wise".

It depends on the context. I mentioned it in a currently active thread and that was because of capital gains tax reasons. Pensions do not have capital gains tax concerns.

NoMore

If you have it invested in a fund like VLS80 then it's not in cash.

enthusiasticsaver

Technically the Vanguard LS is not one fund. It is a basket of index tracker funds so more than one fund in there. I am not sure why you would move it into the VLS 20 or VLS40 except to get more exposure to bonds as they all invest in the same tracker funds.


If you are uncomfortable having that much in Vanguard then explore the Legal and General multi index funds or Blackrock Consensus which are similarly low charges and multi asset like the Vanguard.

cloud_dog

jim8888 wrote: »

I have most of my DC pension sitting in a Vanguard 80/20 Lifestrategy Fund. I'm 55, not drawing down any yet and the fund totals just over £500k (I also have another DB pension that I've not yet taken, so I'm not totally reliant on the DC one.)
I read on an investment thread that having this amount of cash sitting in the one fund isn't particularly "wise". I used to have the cash spread across about 10 funds (picked DIY) but increasingly felt that I had no idea why I'd picked them and clueless as to how they might perform going forward. I was too tight to ask an IFA for an opinion on reallocation, so I stuck it all in the Vanguard fund.
Given that I'm not the swashbuckling trader that I once suspected I might be, and want a bit of security, is the Vanguard choice a good one?

Hi

I think you are missing a bit of context. Re the above do you mean with regards to your risk profile or do you really mean in relation to financial protection (£50k or £85k) for fraud?