Switch to VLS 80?

chelseablue

I have a S&S ISA with Hargreaves Lansdown

I currently have £6,000 in there and add at least £100 a month to it, the money is for my 4 year old son (when he's older so could be looking at in 20 years time)

Its all in the Vanguard Life Strategy 100% equities at the moment.

I've been doing a bit of reading and it seems I might be better off having it in the VLS 80% Equities 20% Bonds

I suppose my question is would you stick with the 100% or move the money to the 80%?

A_T

chelseablue wrote: »

I have a S&S ISA with Hargreaves Lansdown

I currently have £6,000 in there and add at least £100 a month to it, the money is for my 4 year old son (when he's older so could be looking at in 20 years time)

Its all in the Vanguard Life Strategy 100% equities at the moment.

I've been doing a bit of reading and it seems I might be better off having it in the VLS 80% Equities 20% Bonds

I suppose my question is would you stick with the 100% or move the money to the 80%?

I think 100% equities is fine for a 20 year timeline. If you're with Hargreaves Lansdown I would use HSBC FTSE All World Index fund or Legal and General International which are cheaper than Lifestrategy.

dunstonh

I've been doing a bit of reading and it seems I might be better off having it in the VLS 80% Equities 20% Bonds

In what way do you think it is better?

I suppose my question is would you stick with the 100% or move the money to the 80%?

Does it matter what other people would do?
Some of those people are clueless. So, following a lemming off a cliff is not wise.
The rest will have objectives and a risk profile different to you.

What you need to do is what is right for you.

Johnnyboy11

chelseablue wrote: »

I have a S&S ISA with Hargreaves Lansdown

I currently have £6,000 in there and add at least £100 a month to it, the money is for my 4 year old son (when he's older so could be looking at in 20 years time)

Its all in the Vanguard Life Strategy 100% equities at the moment.

I've been doing a bit of reading and it seems I might be better off having it in the VLS 80% Equities 20% Bonds

I suppose my question is would you stick with the 100% or move the money to the 80%?

You could save yourself the 0.45% HL platform fee by transferring your S&S ISA to Vanguard UK. Will make a big difference over the 20 years.

AnotherJoe

I am investing for my grandkids. 100% equities.
For two reasons,

1. Its over a long period, around 20 years, so they dont need the cushion of bonds (and if I thought they did I'd drop to 60% equity because i think 80% is neither here nor there)
2. It's in my name so if at the time I think they woudl do with dropping back to lock in gains I'd do it nearer the time, or if i think it warrants leaving for a while to recover I can do that as well, they wil have no expectation or legal right to get it at a particular age.

Alexland

You would do better switching from HL to Vanguard Investor even after paying the exit fee.

Over the long term across the whole market cycle there isn't much difference between the performance of an 80% or 100% fund. Obviously the 100% funds have done better in recent years but given current market valuations and exchange rates my view is the 80% currently looks more attractive. Still there is no right or wrong answer about what might happen in future and you need to consider your own volatility tollerance.

Also consider a fund which gradually reduces market exposure as the likely withdrawal date aproaches such as the Vangaurd Target Retirement 2035 (currently 72% equties) or 2040 (currently 76% equties) funds.

Alex

Thrugelmir

chelseablue wrote: »

I've been doing a bit of reading and it seems I might be better off having it in the VLS 80% Equities 20% Bonds

On what grounds?

Aylesbury_Duck

I put a sum a month into Vanguard funds, split two-thirds into VLS100 and one-third into VLS40. My reasoning being that if I need to access any of it in the medium term (say 5-10 years), the VLS40 will have been less volatile and if the prices are poor at the time of withdrawal, I limit my losses. If things have gone well at that point, I could withdraw it from the VLS100.

I prefer to achieve what is effectively VLS80 this way, by giving myself two pots to work with.

My son has started saving into VLS100 because it's a sum of money his grandparents have given him and that he doesn't think he'll need to touch for many years.

Alexland

Aylesbury_Duck wrote: »

I prefer to achieve what is effectively VLS80 this way, by giving myself two pots to work with.

Rather than mix two VLS funds wouldn't it be cleaner to just go 80% Vanguard FTSE All Cap fund at 0.25% (or All World ETF at 0.24%, or VLS100 at 0.22%) and 20% Vanguard Global Bond Hedged at 0.15%? The total fund fees would be a similar weighted average and you would have more control on the allocation and what asset class you are selling if you chose to withdraw?

Alex

Thrugelmir

Aylesbury_Duck wrote: »

My reasoning being that if I need to access any of it in the medium term (say 5-10 years), the VLS40 will have been less volatile and if the prices are poor at the time of withdrawal, I limit my losses.

With bonds trading above nominal par value. Then could be as volatile as equities. More so if interest rates were to rise.

chelseablue

Thank you all

I think I thought it wise to move it so I'd have a mix of bonds and equities so I don't 'have all my eggs in one basket' but this is my first time with a S&S Isa so I'm not an expert. As you can all probably tell :rotfl: