We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
VLS100 and 60
Options
Comments
-
Linton said:DairyQueen said:Audaxer said:
< 5 years = all cash
5-7 years = VLS20 (low risk)
7-10 years = VLS80 (high risk)
10+ years = VLS100 (highest risk).
I am front loading drawdown so current allocation of pension portfolio reflects that. As at today:
< 5 years = all cash (21.1%)
5-7 years = VLS20 (6.6%)
7-10 years = VLS80 (28.4%)
10+ years = VLS100 (43.9%).
The drawdown rate will drop to <2% of the balance in 2027 so these allocations will change over time. I also have the option to suspend drawdown if required. Belt and braces
And my holdings mentioned earlier are aligned with this strategy0 -
DairyQueen said:AnotherJoe said:
Interesting. I've short circuited your approach. <5 years, cash, > 5 years equities
More difficult to establish risk timeframes when you are decades from retirement as, tbh, it's tough to determine how much you may need to access within a medium-term timeframe. With decades to go to retirement we adopted the same bucket approach as you.I'm retired. But high risk / sanguine attitude so big drops dont phase me. Probably not many people with my attitude, the money i have will outlast me unless i deliberately bought stuff i dont need and more importantly dont want, since its always possible to justify buying something you dont need if you want it. I dont need a £3k new Mac but I'll be getting one. OTOH i dont need a £4k new bike though I'd like one, but i cant justify it to myself so i haven't bought it ...... yet.Indeed i probably should spend more than i do, "no pockets in a shroud" etc2 -
Deleted_User said:Linton said:DairyQueen said:< 5 years = all cash (21.1%)
5-7 years = VLS20 (6.6%)
7-10 years = VLS80 (28.4%)
10+ years = VLS100 (43.9%).
The drawdown rate will drop to <2% of the balance in 2027 so these allocations will change over time. I also have the option to suspend drawdown if required. Belt and braces
And my holdings mentioned earlier are aligned with this strategy
The 79% of it which represents 'not to be used in the next few years' money has been split 7:28:44 across 20% equity, 80% equity, 100% equity to achieve some 'buckets' but that mix of the three funds is effectively giving you a 'VLS 86' which could be achieved with fewer Vanguard funds, or a single product from another provider with that sort of mix; or ignoring the 5-7 year bucket the two most equity-heavy categories are in aggregate representing a 'VLS 92' or equivalent product. DQ is going to take some future judgement call on what proportions should go in what bucket in future based on looking at the market and performance and spending patterns, so the carefully constructed structure doesn't have permanance anyway.
It may look on paper like it is a clever set of buckets but overlaying the buckets is really just one way of looking at the underlying holdings - when you strip out the buckets and look through, you simply see x% in vanguard US index, y% in vanguard UK index, z% in Euro index, a% in corporate bond index, etc etc . As an outsider, the buckets begin to seem like they are just some artificial construct to make you feel like you have paid lipservice to what you saw in a video or blog or forum about buckets being nice.
It does not strike me as doing things the same way as (e.g.) Linton's bucket approach where he has some cash/wealth preservation stuff, some income topping up the cash, and some growth ticking up in the background, each using fundamentally different strategies and asset classes (infrastructure, bonds, managed wealth preservation, global smaller companies etc)6 -
Audaxer said:Linton said:DairyQueen said:Audaxer said:
< 5 years = all cash
5-7 years = VLS20 (low risk)
7-10 years = VLS80 (high risk)
10+ years = VLS100 (highest risk).
I am front loading drawdown so current allocation of pension portfolio reflects that. As at today:
< 5 years = all cash (21.1%)
5-7 years = VLS20 (6.6%)
7-10 years = VLS80 (28.4%)
10+ years = VLS100 (43.9%).
The drawdown rate will drop to <2% of the balance in 2027 so these allocations will change over time. I also have the option to suspend drawdown if required. Belt and braces
In my case I hold VLS40 and VLS60. I have more in VLS60 which effectively give me roughly 53% equities between the two funds. My thinking is that if I do need to withdraw from my VLS funds during a downturn, I would be better to draw from the VLS40 as it would have suffered a smaller loss that the VLS60.
Audaxer is correct. My portfolio is invested using timeframe buckets because I have different risk tolerances over different timescales and wish to avoid selling equities into a downturn anytime, and definitely within the next 5-7 years.
I would rather take the inflation hit on cash than risk any reduction in the value of the amount that I intend withdrawing over this period. I have a very low tolerance to risk for this part of the portfolio. The cash forms a fundamental part of our income throughout this period and each year's withdrawal has been calculated with variation dependant only on changes in tax allowances.
If it was IHT-optimum to withdraw five years of income upfront (as a TF lump sum) then I would do so but I have reduced life expectancy so keeping the IHT-protection provided by the pension wrapper is a consideration.
Around 72% of the portfolio ( >7 year timeframe) is currently invested in the equivalent of 'VLS90'. Taking such a high risk on this part of the portfolio is possible as drawdown will be optional in the future. I could suspend selling those funds indefinitely if necessary.
Tbh, the decision to split between VLS80 and VLS100 or, indeed, to invest this chunk with Vanguard rather than another provider, was mostly the outcome of balancing asset classes, regions and sectors across a combined portfolio that includes Mr DQ's investments. I manage both as a single portfolio. I could have chosen to invest 90% in a 100% equity fund and the other 10% in a bond fund. The only reason I am not 100% equities for the >7 year bucket is to slightly reduce volatility. Not that a 45% rather than 50% drop makes much difference. I guess that I am slightly beyond my comfort zone to go all out equities.
Mr DQ's portfolio is structured more conventionally. HRT and a LTA breach are both considerations for him so how much he will withdraw annually is a function of his other income (some very variable), tax and portfolio performance. He has the luxury of being able to suspend withdrawals throughout a bear market.
His portfolio is high equities and all funds are targeted at a specific asset class and/or region. Core global passives (Vanguard FTSE Global All Cap and L&G International Trust ex UK) plus actively managed peripherals. He has small %ages in bonds and WP and is currently overweight cash as a hedge against an unexpected, short-term drop in his other income. He is self-employed so this was a possibility even before the virus struck. All first world problems.
Given the complexities of our circumstances I feel comfortable with the approach I have taken with the sub and combined portfolios. My portfolio is split firstly by investment timeframe. Each timeframe has a specific risk and asset allocation. Over time, and as circumstances change, this strategy will likely be revised but, for now, it is meeting our aims I am sleeping comfortably regardless of the market shenanigans.2 -
DairyQueen said:Audaxer said:Linton said:DairyQueen said:Audaxer said:
< 5 years = all cash
5-7 years = VLS20 (low risk)
7-10 years = VLS80 (high risk)
10+ years = VLS100 (highest risk).
I am front loading drawdown so current allocation of pension portfolio reflects that. As at today:
< 5 years = all cash (21.1%)
5-7 years = VLS20 (6.6%)
7-10 years = VLS80 (28.4%)
10+ years = VLS100 (43.9%).
The drawdown rate will drop to <2% of the balance in 2027 so these allocations will change over time. I also have the option to suspend drawdown if required. Belt and braces
In my case I hold VLS40 and VLS60. I have more in VLS60 which effectively give me roughly 53% equities between the two funds. My thinking is that if I do need to withdraw from my VLS funds during a downturn, I would be better to draw from the VLS40 as it would have suffered a smaller loss that the VLS60.
1 -
Audaxer said:DairyQueen said:Audaxer said:Linton said:DairyQueen said:Audaxer said:
< 5 years = all cash
5-7 years = VLS20 (low risk)
7-10 years = VLS80 (high risk)
10+ years = VLS100 (highest risk).
I am front loading drawdown so current allocation of pension portfolio reflects that. As at today:
< 5 years = all cash (21.1%)
5-7 years = VLS20 (6.6%)
7-10 years = VLS80 (28.4%)
10+ years = VLS100 (43.9%).
The drawdown rate will drop to <2% of the balance in 2027 so these allocations will change over time. I also have the option to suspend drawdown if required. Belt and braces
In my case I hold VLS40 and VLS60. I have more in VLS60 which effectively give me roughly 53% equities between the two funds. My thinking is that if I do need to withdraw from my VLS funds during a downturn, I would be better to draw from the VLS40 as it would have suffered a smaller loss that the VLS60.1 -
Linton said:DairyQueen said:Audaxer said:
< 5 years = all cash
5-7 years = VLS20 (low risk)
7-10 years = VLS80 (high risk)
10+ years = VLS100 (highest risk).
I am front loading drawdown so current allocation of pension portfolio reflects that. As at today:
< 5 years = all cash (21.1%)
5-7 years = VLS20 (6.6%)
7-10 years = VLS80 (28.4%)
10+ years = VLS100 (43.9%).
The drawdown rate will drop to <2% of the balance in 2027 so these allocations will change over time. I also have the option to suspend drawdown if required. Belt and braces
I think....1 -
This is an interesting thread. I've got a similar strategy with different buckets in VLS20 (£10k), VLS40 (£14k), and VLS80 (£14k) on Vanguard platform, plus VLS60 (£32k) and Capital Gearing Trust (£40k) on iweb. The intention is to have 'lower-risk' investments in case I need earlier access to funds, but I can't help thinking I've got myself into a right mixup.Any ideas on how to implement a 'bucket' strategy across different platforms? considering the 85k FSCS limit at each. Or is it more optimal to consider the overall asset allocation and possibly drawdown from that if needed?I was thinking of consolidating to VLS60 on iweb for lower flat fees. Also, maybe having CGT on x-o platform.Would rather not pay 0.25% platform fees plus fund costs. Hargreaves and AJ Bell both seem to have quite high transaction fees.0
-
I wouldn't worry about the 85K limit if your money is invested
0 -
lescarp88 said:This is an interesting thread. I've got a similar strategy with different buckets in VLS20 (£10k), VLS40 (£14k), and VLS80 (£14k) on Vanguard platform, plus VLS60 (£32k) and Capital Gearing Trust (£40k) on iweb. The intention is to have 'lower-risk' investments in case I need earlier access to funds, but I can't help thinking I've got myself into a right mixup.Any ideas on how to implement a 'bucket' strategy across different platforms? considering the 85k FSCS limit at each. Or is it more optimal to consider the overall asset allocation and possibly drawdown from that if needed?I was thinking of consolidating to VLS60 on iweb for lower flat fees. Also, maybe having CGT on x-o platform.Would rather not pay 0.25% platform fees plus fund costs. Hargreaves and AJ Bell both seem to have quite high transaction fees.Think first of your goal, then make it happen!0
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 351K Banking & Borrowing
- 253.1K Reduce Debt & Boost Income
- 453.6K Spending & Discounts
- 244K Work, Benefits & Business
- 599K Mortgages, Homes & Bills
- 177K Life & Family
- 257.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards