Vanguard LS 60 fund - performance going forward

MaxiRobriguez

longleggings said:

Thanks again for the  comments. In response to grumio the 0.6% was the Vanguard growth performance for the year on year ended July 20. It appears to have risen to 2.57% in August. I am looking for income not investment growth. Do I assume that the figure of 2.57% is growth and will not necessarily equal income?
Maxi - thanks for your input - looks like VLS could lose money over next 5 years which is worrying. Maybe grumio's suggestion of locking money away in a fixed rate for 3 or 5yrs would be a better short term option.

Not sure why you're bothered about income or growth given you're planning not to touch the investment for a number of years. You should think of income as part of overall growth.

And yes the VLS could lose money. Ultimately it's a capital at risk product so you have to be accepting that you may not get what you put in. It is the same for any other capital at risk product, which is just about everything apart from savings account and premium bonds. We've had a period of exceptional growth in both equity and bond markets and equities have broadly recovered most of their COVID losses (surpassed in the US markets), so if you believe in reversion to the mean then opportunity for growth is likely to be limited over the next few years. Not saying you will lose money, but that it's a possibility. 

Bobziz

Locking it away would be the sensible option, but be clear that the rate of interest that you get may not keep up with inflation. Do you need to access all of the £200k in 5 years ? 

Albermarle

Maxi - thanks for your input - looks like VLS could lose money over next 5 years which is worrying

You should be very aware that comments made in this forum, and about investment trends in general, are people's individual opinions and not fact . The next poster could just  as easily say that you should be sitting on a nice profit with VLS60 in 5 years time and their opinion would be just as valid as Maxi's.

Having said that there  is a kind of consensus that the next 5 years will not be as good as the previous  5 . Probably.....

eskbanker

Albermarle said:

Maxi - thanks for your input - looks like VLS could lose money over next 5 years which is worrying

You should be very aware that comments made in this forum, and about investment trends in general, are people's individual opinions and not fact . The next poster could just  as easily say that you should be sitting on a nice profit with VLS60 in 5 years time and their opinion would be just as valid as Maxi's.

I'd go one step further and say that I agree with both opinions!  VLS60 could lose money over the next five years but should be in profit, even though the odds of being ahead improve when considering a longer period, so, without having accurate stats to hand, it may be that, say, there's a 75% chance of being ahead after five years but 95% after ten years....

[Deleted User]

I'd go one step further and suggest that now is probably a good time time to invest in VL60. The corollary of no deal Brexit is £ losing value. If it does play out that way, it will make VL60's underlying funds more valuable in sterling terms. 

Last July, the rate was c$1.21, this c $1.31 - impacting on what looks to be unusually underwhelming VL performance over that 12 months.

Don't use funds myself but, if you're investing for ten years, it's a solid and popular choice.

Thrugelmir

As a passive investor you’d be very dependent on Vanguard getting their fund allocations right. There’s real passive and what Vanguard happily allow people believe to be passive. Marketing at its worst. Trading on an image rather than fact.

Sailtheworld

Thrugelmir said:

As a passive investor you’d be very dependent on Vanguard getting their fund allocations right. There’s real passive and what Vanguard happily allow people believe to be passive. Marketing at its worst. Trading on an image rather than fact.

The fund documents quite clearly state the fund is actively managed and the manager has discretion to adjust the allocations of the underlying funds (90% passive) to meet the fund objectives. Within the second paragraph of the fund objective statement so hardly hidden in the small print either.

longleggings

Thanks guys for the informative and tolerant comments. What i take from this is that LS 60 will not necessarily perform well in the next 5 years. The consensus seems to be that it is more of a 10yr + investment. Events may still make fools of us all and i will probably lock this away (at low interest rate, but guaranteed) until xmas when i believe i will have a better idea which way the wind is blowing. Hopefully make a more informed decision at that point.
I'm not sure any of us can really second guess the markets at this point in time though obviously some on here are more experienced than others. It's surely all about confidence, something we seem to lack in our leaders at this point, also hard to be confident on covid, recession, Brexit etc. Time to be patient ?
LL

A_T

I don't see the harm of putting at least some of it into shares - maybe a global index tracker. You could wait a lifetime for the perceived perfect time to invest.

Albermarle

I'm not sure any of us can really second guess the markets at this point in time though obviously some on here are more experienced than others. It's surely all about confidence, something we seem to lack in our leaders at this point, also hard to be confident on covid, recession, Brexit etc. Time to be patient ?

You can not second guess the market today, or at any time , however experienced you are .

All we know is that historically in the long term , the markets grow above inflation and we all plan around that happening in future.

Personally I would suggest you hedge your bets by investing some and saving some . Then review in 6 months .