Vanguard lifestrstegy 80

Aminatidi

Stargunner said:

The LS 80 is 80% equity and 20% bonds and the equity part is invested globally, although with a higher bias to the UK than most global funds.  I was just considering investing 80% of my pension fund in one or two global funds and the remaining 20% in less risks funds like bonds.
Here are some examples of some global funds
Edinburgh Worldwide Inv Trust  3yr return 101% 5yr 163%
Fundsmith Equity 3yr return 60% 5yr 139%
Rathbone Global Opportunities 3yr return 55% 5yr 118%
LS80 3yr return 26% 5yr 57%

We all know that past performance is no guarantee of future performance but I| thought that the idea of a sipp is that you can monitor it and if things change you can easily switch to alternative funds.
Aminatidi said previously  

LifeStrategy are intended to be pretty much "set and forget" rather than having to wake up and think "Is now a good time for tech stocks?" or "Is now a good time for UK small caps?" and so on.

Lots of people on here are constantly going on about ways to get another 1 or 2% on a regular saver which will earn them another £40 or £50 a year rather than leaving the money in a Marcus account. Yet they don't bother looking at ways of maybe earning thousands and thousands of pounds more by regularly monitoring their pension account. 

What are peoples views on this? 
 

Saving accounts tell you up front what the rate of return is so you know what you'll make.

Funds and Investment Trusts don't do this because obviously they can't.

If you think you can time the market by hopping in and out of the better performing ones that's an absolutely valid approach.

But many people don't want to take the time and effort involved to try and keep on top of that.

bostonerimus

Comparing funds and portfolios is always a moving target. It's difficult because you need to adjust for risk and differences in assets. VLSxx, or any other multi-asset fund made up of index trackers, will be beaten by many funds and will also beat many other funds. Remember you are not looking to maximize potential returns, you are trying to maximize the chances that you will invest successfully and meet your financial goals and something like VLSxx is a good way to do that. I essentially used a portfolio similar to VLS60 for the 25 years I was working and I got around 8.5% average annual return and became financially independent in my early 50s. Looking back I can easily construct higher returning portfolios, but as my portfolio did what I wanted it to it was perfectly fine.

When constructing a portfolio don't just look at returns also consider things like risk and standard deviation of the returns and the diversity of the fund

Stargunner

Thanks for your replies. I will probably invest the bulk of my pension in the LS 80, but also invest a small amount in 1 or 2 other global funds and monitor how they perform, as I can easily switch it to 100% LS80. 
I know that you can’t go on past performance because things change a lot in the markets, especially over 5 years.

AnotherJoe

Stargunner said:

I imagine that a lot of the other global funds have benefitted from the strong US stock market performance over the last few years, because most of them are about 65% invested in the US, whereas Lifestrategy is only around 40% invested in the US, but much higher invested in the UK which hasn’t  performed so well over the last few years. If only we had a crystal ball to help us make the right choices.

LS isn't really invested 25% in the U.K.  the "U.K." funds it invests in are massive global companies which in the main do little U.K. business. But this 25% "uk" investment skews it to the top of the ftse100 which is financial pharma and extraction companies by and large. 

And those haven't done as well as the FAANGS that have driven US / global stock market 
Re the funds that have done double you've just arbitrarily picked out ones that did well not the poor ones ! Why didn't you choose them 5 years ago?

Perhaps because is very easy to do in hindsight and less so looking forward.  

AnotherJoe

P.s since I can't edit my post, I am not a fan of the LS funds because of the skew to a few industries it arbitrarily picks due to the "U.K." weighting .
The index funds (or ETFs etc)  I  hold are global, and once you invest in a global index  you have to understand you are really investing in the global economy and not the fund itself. Its performance simply reflects the world economy minus charges.
The non index investments I hold are there because I selected them because of their aims, generally a focus on a specific area or idea or company that I think is worth focusing on. 

DairyQueen

Stargunner said:

Thanks for your replies. I will probably invest the bulk of my pension in the LS 80, but also invest a small amount in 1 or 2 other global funds and monitor how they perform, as I can easily switch it to 100% LS80. 
I know that you can’t go on past performance because things change a lot in the markets, especially over 5 years.

This approach suggests you've missed the salient points made by the experienced investors who have posted. Other global funds will perform differently depending on the objective of the fund and how the assets are allocated. You will be comparing apples with oranges.

What are your aims? Over what timescale are you investing? What is your appetite for risk? What is your strategy? If, for example, you have a timescale of 10+ years, a high appetite for risk and are seeking all-out growth regardless of market volatility, why choose a 80/20 allocation? Why choose VLS with its home market bias? Why dilute the particularity of its auto-balanced allocation by the addition of other global equity funds?

A fund's relative performance is meaningless unless you understand its objectives, asset allocation and charges and how it fits with your aims, timescales, attitude to risk and strategy.  Can you articulate this? Choosing a specific fund is a later investment stage and past performance is only one criteria on the assessment list.

Stargunner

I am not looking to touch it for 10 years when I get to state retirement age.
my attitude to risk is quite high as I could afford to retire now if I wanted to, but I am going to work for maybe another couple of years as feel far too young to retire yet and my wife is quite a few years younger than me and it will allow her to retire younger. When I do retire I have enough cash in isa’s/ fixed savings accounts to get me through until I get the state pension along with my sipp.

eskbanker

DairyQueen said:

Stargunner said:

Thanks for your replies. I will probably invest the bulk of my pension in the LS 80, but also invest a small amount in 1 or 2 other global funds and monitor how they perform, as I can easily switch it to 100% LS80. 
I know that you can’t go on past performance because things change a lot in the markets, especially over 5 years.

You will be comparing apples with oranges.

Or to stretch the analogy somewhat, the approach is a bit like comparing Apple with Orange, and, seeing that the performance of a US tech giant has been way more impressive than a stagnant French telco, convincing yourself that you'd have had the foresight to invest in the former rather than the latter!

AnotherJoe

Stargunner said:

Thanks for your replies. I will probably invest the bulk of my pension in the LS 80, but also invest a small amount in 1 or 2 other global funds and monitor how they perform, as I can easily switch it to 100% LS80. 
I know that you can’t go on past performance because things change a lot in the markets, especially over 5 years.

Why global funds if by that you mean indexes? Dont expect to see any difference. 3 different global funds below.

By all means pick an area, say healthcare or renewable energy, or a fund* that focuses on say high tech like SMT or even one company.  But if by "global fund" you mean another index, waste of time.

* as shorthand for fund, ETF, IT etc.

kinger101

Stargunner said:

The LS 80 is 80% equity and 20% bonds and the equity part is invested globally, although with a higher bias to the UK than most global funds.  I was just considering investing 80% of my pension fund in one or two global funds and the remaining 20% in less risks funds like bonds.
Here are some examples of some global funds
Edinburgh Worldwide Inv Trust  3yr return 101% 5yr 163%
Fundsmith Equity 3yr return 60% 5yr 139%
Rathbone Global Opportunities 3yr return 55% 5yr 118%
LS80 3yr return 26% 5yr 57%

We all know that past performance is no guarantee of future performance but I| thought that the idea of a sipp is that you can monitor it and if things change you can easily switch to alternative funds.
Aminatidi said previously  

LifeStrategy are intended to be pretty much "set and forget" rather than having to wake up and think "Is now a good time for tech stocks?" or "Is now a good time for UK small caps?" and so on.

Lots of people on here are constantly going on about ways to get another 1 or 2% on a regular saver which will earn them another £40 or £50 a year rather than leaving the money in a Marcus account. Yet they don't bother looking at ways of maybe earning thousands and thousands of pounds more by regularly monitoring their pension account. 

What are peoples views on this? 
 

If you know that past performance is not a guarantee of future performance (it's not even a reliable predictor), then why come up with a strategy that looks at past performance?  You''re not even comparing apples with oranges.  The equities portion of VLS80 is a pool of trackers.  You're comparing against stock pickers.  It's inevitable some of these will beat trackers, as by definition, trackers should be very average.  

But if you are going actively managed, then yes, bond funds are good for diversification, and might actually improve your long-term return.  Provided you remember to rebalance.