Vanguard Life strategy 50/50 allocation

MaterialGirl*

I want to achieve a 50/50 split  of bonds and equities in my S&S Isa. Currently I invest only in LS60.

Am I right in thinking that an equal split of my monthly contribution between LS60 and LS40 will result in a 50/50 split? Many thanks.

bowlhead99

Yes, assuming you transfer half of your existing LS60 into LS40 and then add equally to each going forward, you will be at 'LS50', because you'll have 60:40 bonds:equity and 40:60 bonds:equity which in total is 100:100 or 50:50 or 1:1.

But practically, the two funds will grow or shrink at different rates and throw off your proportions, so if for some reason you needed an exact 50%, you would need to tinker with it every month to get there.

You could achieve similar with keeping three quarters of your money in VLS60 and putting a quarter into VLS20.     As the 20, 40 and 60 products will have slightly different allocations for their bond components you might have a preference which mix to use, if the goal is not just to hit an arbitrary percentage but to hold particular types of bonds within the bonds that you have. 

Or if Vanguard doesn't offer a single product that does what you want and you don't want to juggle multiple funds, it may make more sense to look to other product providers.

Albermarle

Or have VLS 60 and enough cash to dilute the equity holding to 50% 

dunstonh

What benefit is there trying to create a 50% equity allocation when there is a perfectly good 60% equity fund available.  Or one of the other multi-asset funds that is closer to 50%?
You do realise that the difference between 50 and 60 is so minimal that its  barely worth the effort?  Plus, you will need to rebalance it periodically as it will only be 50/50 on one day.

MaterialGirl*

Thank you All.  I think it seems easiest to just stick with my LS60. I don’t want to tinker with it every month and if there’s only a minimal benefit to it, I’ll just leave it as it is.