Vanguard or legal and general

lionel_hutz

I want to save each month into a stocks and shares ISA but am not sure whether to go with vanguard or legal and general?
Vanguard get a lot of good reviews on price and the funds bit are they really that good? Legal and general have a global technology index trust that seems appealing to me as I’d like to invest more in tech.
There is a lot of funds on vanguards site which is possibly over complicating it for me....too much choice!

Albermarle

Both are OK .
A Vanguard ISA will be marginally cheaper for equivalent funds but L&G rates have come down , partly due to pressure from Vanguard !
Typically 60/40 multi asset fund will cost 0.22% with Vanguard + 0.15% platform cost .
L&G have a one flat fee around 0.5%/0.6% I think , which is similar to other companies offerings.

dunstonh

Vanguard get a lot of good reviews on price and the funds bit are they really that good?

They are an internet favourite but it doesnt mean they are the best. Plus, the problem with the internet is things change but internet sites are often historic. VLS was one of the best options for that sort of thing years ago but it is now beaten in price and its lack of of risk targetting is an issue that needs consideration if you are at the lower end of the risk scale.

Legal and general have a global technology index trust that seems appealing to me as I’d like to invest more in tech.

An extremely high risk specialist niche fund that should really have no more than 5% of your overall value and Vanguard have nothing comparable. Can you really handle 90% loss potential?

lionel_hutz

dunstonh wrote: »

They are an internet favourite but it doesnt mean they are the best. Plus, the problem with the internet is things change but internet sites are often historic. VLS was one of the best options for that sort of thing years ago but it is now beaten in price and its lack of of risk targetting is an issue that needs consideration if you are at the lower end of the risk scale.



An extremely high risk specialist niche fund that should really have no more than 5% of your overall value and Vanguard have nothing comparable. Can you really handle 90% loss potential?

I was thinking of putting 60% of my investment into the technology fund as the 5 year growth was good plus technology whilst risky generally performs well over the medium term....not so sure now!!!

C_Mababejive

Have you looked at HSBC Global Strategy mixed asset funds??

bowlhead99

lionel_hutz wrote: »

I was thinking of putting 60% of my investment into the technology fund

I like risk and have individual company shares as well as various specialist funds/ trusts, but 60% in one sector is a heck of a lot.

as the 5 year growth was good plus technology whilst risky generally performs well over the medium term....not so sure now !!!

One of the more useful things you can do as a sanity check - when you see a fund that has done well over a short period like one or three or five years - is to calculate what your prospective investment would be worth if the value dropped back to where it was at the beginning of that short period.

If you're looking at the FTSE World technology index, it went up 170% in five years, so £1000 is now worth £2700. Or you could say it only took an initial investment of £370 to get to £1000. Nice.

But if you invest £1000 today and the index goes back to its level of five years ago, your £1000 is only worth £370 ; you've lost almost two thirds of your money and nobody can tell you how long it will take to recover. Maybe just a few years, maybe more than five.

Large falls are not at all far-fetched. E.g., if a company is being valued at 25 times annual earnings and has grown well so it's earning $800 million of profits a year, and it looks like the growth is continuing, then it's valued at $20 billion. But what about when we have a global stock market crash and comparable companies in that sector and region are only being valued at 15 times their forecast earnings instead of 25, and the company is going through a recessionary environment with profits forecast to fall to only $300 million? Now the company is only valued at $4.5 billion instead of $20.

Oh and sterling has appreciated after Brexit didn't turn out to be the worst case scenario that people were thinking, so when you sell the company you only get a pound for every $1.65, instead of a pound for every $1.30.

So the company is only worth £2.7 billion, instead of £15.4 billion today - and every £10 of value today is only worth £1.75.

Then from £1.75 you require 470% growth to recover your tenner. Good job tech firms can go up in value quickly...

Alexland

My view is VLS60 and VLS80 are both good funds to preserve spending power and deliver real growth (respectively) over the medium to long term (respectively).

If investing at a lower equity exposure than VLS60 it might be better to hold some cash alongside VLS60 rather than go too heavy on bonds right now.

If investing at 100% equities then there are better options than VLS100 such as the Vanguard FTSE All Cap fund or All World ETF.

Once your investments are large enough it can make sense to built a 2 fund portfolio pairing All Cap or All World with a low cost bond fund.

I wouldn't invest in a technology fund as a small exposure isn't going to make much difference and a big exposure is too much risk. Think ahead don't just buy into something that has recently done well as things change.

Alex

dunstonh

lionel_hutz wrote: »

I was thinking of putting 60% of my investment into the technology fund as the 5 year growth was good plus technology whilst risky generally performs well over the medium term....not so sure now!!!

I recommend you take a look at the late 90s/early 2000s. They performed really well in the early to mid 90s too. That 90% drop happened. Its not a hypothetical.

Today, there are tech companies that are over priced on potential. Potential that may not happen (and for many, won't happen).

Tech is not just high risk, it is very high risk. The top companies today can slide down very quickly.

bostonerimus

Don't go investing in risky niche areas; you are likely to get burned and that might discourage you from further investing.

Buy a multi-asset fund from one of the big fund houses on a good platform. If you go with Vanguard's VLS funds you can buy them directly on the Vanguard platform or on another platform where you can buy other things too or you can buy the multi-asset funds from L&G, GSBC Blackrock etc. Keep things simple and stay away from sector and geographic funds until you have done some serious research and fully understand all the risks. FYI I've been investing for 30 years and I know that I don't yet know enough to invest in things like "technology trusts"

Reed_Richards

lionel_hutz wrote: »

I was thinking of putting 60% of my investment into the technology fund as the 5 year growth was good plus technology whilst risky generally performs well over the medium term....not so sure now!!!

Have a read about the "dot.com bubble" when people got massively over-excited by the potential of internet-related companies and tech stocks in general. It wasn't that long ago. https://en.wikipedia.org/wiki/Dot-com_bubble . Around that time I worked for a telecommunications company that underwent a massive expansion because of the demand for internet-related infrastructure. When that demand was met after a few years the company could not cope with the huge shrinkage required and eventually went bankrupt.

chris1

dunstonh wrote: »

VLS …. its lack of of risk targetting is an issue that needs consideration if you are at the lower end of the risk scale.

Please could someone explain what this means?
In relation to VLS 20 or 40.