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Is 'Vanguard LifeStrategy' enough in your portfolio?
edited 30 November -1 at 1:00AM
in Pensions, Annuities & Retirement Planning
100 replies
10.9K views
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But you don't need to educate yourself. Thats what an IFA is for
Tim Hale's "Smarter Investing" is also popular although I haven;t read that one.
I only have one multi asset fund in my portfolio at the moment. Vanguard Lifestrategy 60 and my SIPP, ISA and husbands ISA are all in the same fund. I started investing in it about 5 years ago, older than you and initially it was a monthly amount then a few lump sums then transferring old cash isas across. I chose it because there was a lot of information about it especially on here, the multi asset nature appealed to me as it was essentially a broadly diversified fund less volatile than 100% equities and cheap. I don't have the knowledge to pick managed funds or suss out the good performers from the duds. I can understand the performance charts from trustnet or morning star but as far as I could see the Vanguard lifestrategy funds performed well but it looked like the managed ones sometimes did well but then languished and the charges seemed steep. I feel that I would have to keep more of an eye on managed investments whereas I feel confident to just invest and forget with the Vanguard LS60 and in all honesty that is what I would rather do. I don't have the will to spend a lot of time trying to work out where to invest in the thousands of funds there are out there.
However our investments are now over £200k and all in Vanguard life strategy 60. We had a review with an IFA just before my DH retired two years ago and were not impressed. He did a review of our pensions and investments and made a fairly obvious mistake so I had no confidence in him after that. He based his whole report on false information given to him by my husbands company pension administrator (wrong retirement year quoted) and whilst they made the mistake he did not spot it or wonder why the calculations were so far off the figures we got 6 months earlier. Anyone who misses such a glaring error does not fill me with confidence so we carried on with me managing our investments as before and the pot was growing as we sold a property and then I retired. We are in the process of another review now with a different IFA so will see what he says.
So the answer to your second question in my view is when the pot is over £100k or you no longer feel confident you are going down the right road. Our investments have grown since I started self investing but whether they would have grown more under an IFA after their charges I don't know. For us it is not too much of an issue as we are already early retired and comfortable financially with a mix of the Vanguard LS 60, DB pensions covering our living expenses, cash and a mortgage free property. Whether an IFA can add value to what we have already will depend on how we perceive the 2nd IFA's report.
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You sound as if you have organized things well on your own. I’m not sure it’s worth paying someone 1% to do what you seem to be doing perfectly well yourself. People too often believe, or are told by the financial industry, that there is some special sauce. The “sauce” isn’t that special, just common sense and time as I think you have found our.
How much do Vanguard's executive's and management team earn? The matter is clouded in secrecy. If as you say that operate for the benefit of their investors as a mutual organisation. Why the need.
Equitable Life was a mutual organisation. Once the lid was lifted. Not all as it seemed.
PS. Not suggesting that Vanguard is "bad". Just don't wear RTG's when dealing with US Corporate organisations.
BlackRock, Fidelity and HSBC also have well compensated executives. They pay out shareholder dividends on top of that.
Vanguard have been very consistent in driving the costs down for investors and offering innovative quality products over many years and providing an alternative to overpriced funds and expensive IFAs.
Not to say that other providers don’t have competitively priced products. I own Vanguard ETFs as well as ETFs managed by BlackRock and a couple of other providers. Vanguard upends the market which forces others to offer competitive products.
Price isn't everything. There's room for both passive and active fund management in everyone's portfolio. Investing is a broad church. Not restricted to any one belief. Having a single belief is likely going to result in disappointment in the longer term.
Likewise as Vanguards range of products widens. Who is going to advise investors the best option to choose. May work for the US markets. Where market analysis (paid for by others) results in efficient market pricing. Not so sure that investing in China, for example, on a passive basis is such a good idea. As is so very different for a whole variety of reasons.
I haven't been disappointed, but then I think I have sensible expectations and never set out with the idea that I would get the highest possible returns. In the end I've settles for around a 30 year average annual return of 8.5% using index funds.