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Is 'Vanguard LifeStrategy' enough in your portfolio? - Page 4

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Is 'Vanguard LifeStrategy' enough in your portfolio?

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  • ThrugelmirThrugelmir Forumite
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    Basically i was saying that based on what i've read, managed funds are consistently beaten by trackers over many many years.

    That's a very broad generalisation. Trackers are ideally suited to the larger liquid markets. When one discusses global equity funds for example. Bear in mind that 80% of all trades in 2018 were conducted in just 110 stocks. That leaves an awlfull lot of smaller under researched companies where it's possible for the smaller fund manager and private investor to plough their own furrow. Likewise you might need to invest for 5 years or more to see the results of a contrarian investment stance come to fruition.

    Chasing something because the price is rising (i.e. everybody else is buying the same stocks) isn't investing, just speculation.
    “Buy value, not market trends or the economic outlook. Individual stocks determine the market, not vica versa." - Sir John Templeton
  • edited 16 May 2019 at 9:05AM
    dunstonhdunstonh Forumite
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    edited 16 May 2019 at 9:05AM
    Is there a reason why the LifeStrategy funds seem to be the 'biggie'?

    The church of Vanguard has a devout following that is rather vocal.

    Vanguard was active in bringing the fund charges down. So, for a while, they were the driver. However, like many things in life, the first one to do it isn't necessarily the one to be with later on.

    Also, Vanguard also happened to be heavier in the sector which was the best performing in this cycle. Had the lifestrategy funds existed in the previous cycle, they would likely have underperformed with the same asset spread as that sector underperformed. So, they got a bit lucky with their timing. Plus, they launched after the credit crunch. So, their past performance charts so no significant loss period.

    There is nothing wrong with VLS. If you had VLS, L&GMI, HSBC GS or Architas MAP then you would pretty happy with any of them. It really is just fine tuning as they all have different weightings and approaches.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • edited 16 May 2019 at 2:10AM
    bostonerimusbostonerimus Forumite
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    edited 16 May 2019 at 2:10AM
    Many IFA's will themselves be buying their portfolio modelling and advice. There's a lot of hard work and maths that goes into portfolio development and management and also a lot of bias, assumptions, projections and guess work....garbage in, garbage out.

    I am not convinced of the utility of IFAs after the initial development of a plan. If you have big changes in your circumstances then you might want to use an IFA for one time strategic advice, but I don't think most people need to be paying them on an ongoing basis with the advent of multi-asset funds and diverse low cost equity and bond funds that can be assembled into a simple no fuss portfolio.
    Misanthrope in search of similar for mutual loathing
  • edited 16 May 2019 at 6:27AM
    LintonLinton Forumite
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    edited 16 May 2019 at 6:27AM
    Whether a single multi asset fund is either sufficient or optimal depends on your circumstances. For someone relatively young with a relatively small pot and little experience making long term contributions to a pension scheme they are probably your best option.

    At the other extreme if you were retired living off a pension pot of say £500K with complex objectives that come from requiring a secure and stable ongoing inflation matching income, providing an inheritance for your dependents etc then a single multi asset fund would not be your worst option. However someone with knowledge, experience and interest in doing so could construct a better portfolio designed for their particular circumstances.

    Whether Vanguard Life Strategy is the best multi asset product is another matter. VLS100 has consistently underperformed global indexes because of its high FTS100 allocation and the non-equity allocations in the other VLS funds are in my view not ideal given the high prices of very safe government bonds since the 2008 crash.
  • MK62MK62 Forumite
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    VLS100 is not a multi asset product though......:wink:

    As to whether multi-asset VLS products are the best.....that's pretty subjective imho. Going forward there is no way to know, and looking back they have performed on a par with some of their peers, and better than some others. What is clear though, at least imho, is that if someone was looking for a low cost multi-asset fund, then the VLS series is certainly not a bad place to start looking, but it's not the only game in town either.
  • LintonLinton Forumite
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    MK62 wrote: »
    VLS100 is not a multi asset product though......:wink:
    ...
    No, but it represents the equity portion of all the other
    VLSs.
  • JustAnotherSaverJustAnotherSaver Forumite
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    MK62 wrote: »
    VLS100 is not a multi asset product though......:wink:
    So 100 isn't, but the others are?


    Why?


    And so what is one then?

    Albermarle wrote: »
    Out of interest, how come the HSBC one gets mentioned here frequently but isn't on that link? Or did the HSBC one get released after 2017?

  • LintonLinton Forumite
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    So 100 isn't, but the others are?


    Why?


    And so what is one then?

    A multi asset fund holds different types of assets. Equity (shares) is one type of asset. In a global crash all your equity is likely to fall. Other types of asset, eg bonds, property, gold, bitcoins, Lego bricks etc could well behave differently, perhaps rising if equity falls. Multi asset funds holding several different types of asset will be less volatile than a fund which just holds one type. As it’s name suggests VLS100 is 100% equity so isn’t multi asset. VLS80 is 80% equity and 20% bonds and so is multi asset.

    Other multi asset funds may hold further types of asset such as property which the VLS funds do not.
  • JustAnotherSaverJustAnotherSaver Forumite
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    Linton wrote: »
    A multi asset fund holds different types of assets. Equity (shares) is one type of asset. In a global crash all your equity is likely to fall. Other types of asset, eg bonds, property, gold, bitcoins, Lego bricks etc could well behave differently, perhaps rising if equity falls. Multi asset funds holding several different types of asset will be less volatile than a fund which just holds one type. As it’s name suggests VLS100 is 100% equity so isn’t multi asset. VLS80 is 80% equity and 20% bonds and so is multi asset.

    Other multi asset funds may hold further types of asset such as property which the VLS funds do not.
    I actually figured that out about 20mins after my last post but i'd gone for a lay down. Obviously you guys can't see this but my head is like cotton wool at the moment as i'm pretty ill & (trying) to spend the time being productive. Problem is, it just makes reading about a topic i struggle with on a good day even harder :rotfl: but then i don't like to sit on the sofa and literally do nothing even though that's possibly what i should do.


    What funds are there of this type then so that i can try and look at them more.
    Obviously there's the ones on the link provided and i'm aware of HSBCs variety.

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