Vanguard or legal and general

Alexland

aroominyork wrote: »

VLS has a UK bias so why do you see that as OK if you are holding 60% or 80% equities but not if holding 100% equities? If you prefer a global approach with no UK bias, then surely instead of VLS60 you would put 60% of your funds into a global all cap and 40% into a bond fund.

Although I prefer a lower UK allocation it is unlikely to make a huge difference either way especially when investing in mixed assets where the impact of the equity asset allocation is diluted. Its hardly worth going with a 2 fund approach when first starting with investment and the values are low.

Alex

Shocking_Blue

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?

Sorry to hijack the thread, but I was also just about to go with Legal & General Global Technology Index Trust I Class Accumulation. Now I'm also not so sure. Is it really extremely high risk? The annualised returns going back 10 years look alright. I know about past performance etc, but the performance history graphs also don't look too erratic.
Thanks.

dunstonh

Is it really extremely high risk?

Yes.   It is up there amongst the higher risk UT/OEIC funds available.

 but the performance history graphs also don't look too erratic.

I'm guessing you are too young to remember the dot.com crash.   This fund launched just after the drops started but the L&G fund still managed to lose 74% of its value over a year.   Had it been available earlier, it would have lost 90% of its value.

After it hit bottom then went on to do nothing for almost 10 years.  It took until 2015 to get back to its value in 2000.

So, in some respect, you are right.  It has spent most of the last 20 years giving zero return but at one end you had a spectacular loss and the other end a spectacular gain.

Due to short history of the fund, here is a chart on the tech sector so you can get an idea of what happened during the last bubble.

Look at that spectacular gain between 1998 and 2000.  If you went in near the top of that, you would only have recovered your value in 2018.  Of course, in reality, you would have bottled out a long time ago and probably turned into one of those people that says they lost money on the stockmarket and would never invest on it again.

Niche, high risk funds give you all or nothing.  They tend to bubble and burst.    The P/E ratio of the stockmarket tends to float around 10-25.  When you get into the 20s, you start fearing the chances of a crash.    Amazon's P/E ratio is over100.    

You want part of the party.  However, the party started years ago.  You are not going to be part of that party.   You may get lucky and find the party lasts a bit longer.    However, you could be just arriving when everyone is going home and the clean up begins.

There is good reason why the bubble hasn't burst yet.   Although just a couple of weeks ago there was a bit of a sell off.  Tech boomed during lockdown but what happens in a year or two when the online meetings etc are not on the same scale and the recession has reduced the spend on mobile phones and other consumer electronic goods?

This is why you diversify and don't go heavy into high risk areas.   By all means include a few percentage points above normal weightings if you have the risk profile.   If you decide to go into it heavy, then just picture having £30,000 and then seeing it valued at £3,000.   Think about what you would do in that scenario.

kinger101

Shocking_Blue said:

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?

Sorry to hijack the thread, but I was also just about to go with Legal & General Global Technology Index Trust I Class Accumulation. Now I'm also not so sure. Is it really extremely high risk? The annualised returns going back 10 years look alright. I know about past performance etc, but the performance history graphs also don't look too erratic.
Thanks.

How do you propose to profit from those past gains?  They don't look erratic because we've had a bull market since 2008, in which tech funds (and US in general) have performed particularly well.   Given the current price of tech stocks, many people consider they're probably sufficiently exposed to tech even with an SP500 or global index tracker.  Personally, I still hold some tech funds, but I've sold off quite a bit recently because I was beginning to feel uncomfortable with the bias towards tech post-Covid.

Shocking_Blue

dunstonh said:

Is it really extremely high risk?

Yes.   It is up there amongst the higher risk UT/OEIC funds available.

 but the performance history graphs also don't look too erratic.

I'm guessing you are too young to remember the dot.com crash.   This fund launched just after the drops started but the L&G fund still managed to lose 74% of its value over a year.   Had it been available earlier, it would have lost 90% of its value.

After it hit bottom then went on to do nothing for almost 10 years.  It took until 2015 to get back to its value in 2000.

So, in some respect, you are right.  It has spent most of the last 20 years giving zero return but at one end you had a spectacular loss and the other end a spectacular gain.

Due to short history of the fund, here is a chart on the tech sector so you can get an idea of what happened during the last bubble.

Look at that spectacular gain between 1998 and 2000.  If you went in near the top of that, you would only have recovered your value in 2018.  Of course, in reality, you would have bottled out a long time ago and probably turned into one of those people that says they lost money on the stockmarket and would never invest on it again.

Niche, high risk funds give you all or nothing.  They tend to bubble and burst.    The P/E ratio of the stockmarket tends to float around 10-25.  When you get into the 20s, you start fearing the chances of a crash.    Amazon's P/E ratio is over100.    

You want part of the party.  However, the party started years ago.  You are not going to be part of that party.   You may get lucky and find the party lasts a bit longer.    However, you could be just arriving when everyone is going home and the clean up begins.

There is good reason why the bubble hasn't burst yet.   Although just a couple of weeks ago there was a bit of a sell off.  Tech boomed during lockdown but what happens in a year or two when the online meetings etc are not on the same scale and the recession has reduced the spend on mobile phones and other consumer electronic goods?

This is why you diversify and don't go heavy into high risk areas.   By all means include a few percentage points above normal weightings if you have the risk profile.   If you decide to go into it heavy, then just picture having £30,000 and then seeing it valued at £3,000.   Think about what you would do in that scenario.

Wow, that is indeed food for thought. Was aware of the dot.com crash (and wouldn't have gone anywhere near it investment-wise), but had just regarded this as a product of the huge technological/internet revolution. And yes, did have an eye on the changing nature of interaction and the massive surge in the use of online comms in all sectors. I know it's a bit unclear if - post Covid - this will continue, but I know from experience that so much work and effort has been shovelled into this in the past 6 months that I think personally it will not just be 'binned' (perhaps more of an integral part of the way we do things)?? That fund I mentioned has Apple, Microsoft, and Facebook as it's top holdings, and I was thinking that these were not liable to crash as such in the near future, but what you say about Amazon is really interesting, and has certainly made me have a re-think about this particular organization.
What do you think about that particular fund (it's region, sectors, holdings)? Certainly wouldn't have this as a core holding.
Thanks.

sebtomato

I used the have large investments in VLS60 and VLS80, but I didn't like the UK weight. Disproportionate and the FTSE100 has been performing poorly for years.

LHW99

Shocking_Blue said:

dunstonh said:

Is it really extremely high risk?

Yes.   It is up there amongst the higher risk UT/OEIC funds available.

 but the performance history graphs also don't look too erratic.

I'm guessing you are too young to remember the dot.com crash.   This fund launched just after the drops started but the L&G fund still managed to lose 74% of its value over a year.   Had it been available earlier, it would have lost 90% of its value.

After it hit bottom then went on to do nothing for almost 10 years.  It took until 2015 to get back to its value in 2000.

So, in some respect, you are right.  It has spent most of the last 20 years giving zero return but at one end you had a spectacular loss and the other end a spectacular gain.

Due to short history of the fund, here is a chart on the tech sector so you can get an idea of what happened during the last bubble.

Look at that spectacular gain between 1998 and 2000.  If you went in near the top of that, you would only have recovered your value in 2018.  Of course, in reality, you would have bottled out a long time ago and probably turned into one of those people that says they lost money on the stockmarket and would never invest on it again.

Niche, high risk funds give you all or nothing.  They tend to bubble and burst.    The P/E ratio of the stockmarket tends to float around 10-25.  When you get into the 20s, you start fearing the chances of a crash.    Amazon's P/E ratio is over100.    

You want part of the party.  However, the party started years ago.  You are not going to be part of that party.   You may get lucky and find the party lasts a bit longer.    However, you could be just arriving when everyone is going home and the clean up begins.

There is good reason why the bubble hasn't burst yet.   Although just a couple of weeks ago there was a bit of a sell off.  Tech boomed during lockdown but what happens in a year or two when the online meetings etc are not on the same scale and the recession has reduced the spend on mobile phones and other consumer electronic goods?

This is why you diversify and don't go heavy into high risk areas.   By all means include a few percentage points above normal weightings if you have the risk profile.   If you decide to go into it heavy, then just picture having £30,000 and then seeing it valued at £3,000.   Think about what you would do in that scenario.

Wow, that is indeed food for thought. Was aware of the dot.com crash (and wouldn't have gone anywhere near it investment-wise), but had just regarded this as a product of the huge technological/internet revolution. And yes, did have an eye on the changing nature of interaction and the massive surge in the use of online comms in all sectors. I know it's a bit unclear if - post Covid - this will continue, but I know from experience that so much work and effort has been shovelled into this in the past 6 months that I think personally it will not just be 'binned' (perhaps more of an integral part of the way we do things)?? That fund I mentioned has Apple, Microsoft, and Facebook as it's top holdings, and I was thinking that these were not liable to crash as such in the near future, but what you say about Amazon is really interesting, and has certainly made me have a re-think about this particular organization.
What do you think about that particular fund (it's region, sectors, holdings)? Certainly wouldn't have this as a core holding.
Thanks.

I have funds that include these tech shares in their top ten (eg BNKR) but although I am adding to some of my holdings this year when I feel there is opportunity, I am avoiding the ones that include these stocks for exactly the reason that I believe there will be an adjustment coming. I did live through the dot com era, and looking at the speed of industry changes, couldn't see longevity in most of the companies at that time.

Albermarle

sebtomato said:

I used the have large investments in VLS60 and VLS80, but I didn't like the UK weight. Disproportionate and the FTSE100 has been performing poorly for years.

Yes the Life strategy funds have not done so great during the Covid ups and downs this year . The Blackrock consensus competitors are even worse , as are some similar Standard Life funds ,  also due to the high UK weighting .
On the other hand I have a 45% equity multi asset Scottish widows fund ( ex Zurich) with a 70% UK weighting that has done OK .
Probably because the UK weighting is a lot more on the non equity side ?