HSBC Global Strategy Vs Vanguard LifeStrategy

fronty

Something else, you'll find the HSBC GS funds in a different category called "Volatility Managed", so if you go looking for them in "Mixed Assets 40-85%" you won't find them. I guess that's a bit of a clue?

JohnWinder

Agree, one wouldn’t call it a closet indexer. I’d just lost track of the fee comparisons of the funds under discussion.
I hope my comment is useful to someone in some other circumstances.

cloud_dog

fronty wrote: »

Something else, you'll find the HSBC GS funds in a different category called "Volatility Managed", so if you go looking for them in "Mixed Assets 40-85%" you won't find them. I guess that's a bit of a clue?

Out of the usual MA type funds usually discussed (VLS, HSBC GS, BR Consensus) I prefer the HSBC GS but, that is me (or more accurately the OHs investments).

I am intrigued by the BR MyMap versions but they have only recently launched so I am monitoring them for the time being.

JustAnotherSaver

I remember seeing this thread midweek at work and meant to reply on it once i got home but forgot. I was hoping to see a reply from bowlhead99 as some of the responses on this were interesting.


I remember asking something similar-ish not all that long ago and the response was make your mind up, you either want to pick A or B when they're so alike, stop dilly-dallying.

And i could accept the point made.



Interesting then to see others not picking one but picking both.

ggmf

Interesting thread with 2 funds that I have been monitoring, would anybody have any thoughts about the Vanguard Target Retirement 2025 Fund?

Linton

ggmf wrote: »

Interesting thread with 2 funds that I have been monitoring, would anybody have any thoughts about the Vanguard Target Retirement 2025 Fund?

Reducing return and volatility as you approach 2025 only makes sense if you are planning on using a significant % of your money in 2025 or soon after. If you are starting drawdown then, more than half you money will probably stay invested for at least 15 years. So reducing returns early does not sound like a good idea. Better to stay highly invested in equity but build up a cash buffer of say 5 years that will tide you over a market crash.

Chickereeeee

SO both VLS and HSBC GS are OEIC funds, which incur additional charges on some platforms.


Is there any ETF or IT equivalent that could be used, or, if not, some fundamental reason why not?


C

JohnWinder

“So reducing returns early does not sound like a good idea. Better to stay highly invested in equity but build up a cash buffer of say 5 years that will tide you over a market crash.”
That has a ring of logic about it, but the research and modelling I’ve seen suggest the approach you suggest is not always ‘better’. Reducing higher returning volatile assets like shares early can give better protection against a sequence of bad returns risk (SoR risk), particularly as the SoR risk period is not just at retirement but for several years before. See Wade Pfau or Big ERN’s work.
Indeed, the idea of a ‘bond tent’ might be a better choice: increasing your % of bonds or cash leading up to retirement and the have the % fall as you proceed through retirement.
The best mix of assets and their variation over time for retirement income won’t be known until after the event and you’re about to croak.
Under different economic conditions some approaches will fail early, some will fail late, others will give you less spending.
There are spending ways to deal with the hand you’ve been dealt, but which is a better asset allocation will depend on the unknowable future.

green_man

Chickereeeee wrote: »

SO both VLS and HSBC GS are OEIC funds, which incur additional charges on some platforms.

Is there any ETF or IT equivalent that could be used, or, if not, some fundamental reason why not?
C

As far as I can tell the equivalent ETF doesn’t exist (I stand to be corrected). I researched this myself and couldn’t really find what I wanted in the ETF arena (I wanted to go with HL but too expensive on funds). What you can do is pick maybe 6-8 ETFs that would do a decent job of replicating VLS, but of course the rebalancing is something you would have to do yourself, HSBC GS is perhaps a bit more difficult to replicate as it required some subjective calls on how to mitigate volatility.

fronty

Ah, interesting, I had also been looking at the Vanguard Target Retirement funds. Initially I liked the idea of reducing the risk automatically, but I hadn't really thought about the consequences of this because you'd have to stay invested in order to drawdown. So maybe these types of funds are only really suitable for people that want to buy an annuity. I wonder how popular annuities are these days vs drawdown?