SIPP Flexi access drawdown based on Vanguard Lifestrategy x% equities

BPL

Audaxer said:

BPL said:

I was thinking of 20% equities perhaps alongside 100% or 80% so i can result adjust the equity / bond allocation. I'm trying to keep it simple as I'm stupid ;-) what are you using due your barbell?

If trying to keep it simple, why not just have one VLS fund - a VLS60 rather than both a VLS20 and a VLS100?

Just to be able to adjust the equity bond ratio. I'm just with 20 atm but I'm aware that may be too low for the long term even for a cautious approach

shinytop

Audaxer said:

shinytop said:

BPL said:

Has anyone considered or done this? I loved the low cost of 0.22pc plus platform fee 0.2pc and the fact these funds are rebalanced without having to pay an ifa or diy effort. I'm thinking accumulation and sell units for income rather than natural yield from distribution. 

I do something similar; my main holdings are VLS60 and HSBC Balanced.  No real reason for splitting other than hedging/curiosity.  I'm thinking about replacing one of them (probably VLS) with a managed wealth preservation fund but I'm not convinced.  I also have a few years of cash and a small amount (10%) in more specialist managed equity funds.   

I think splitting between VLS60 and HSBC Global Strategy is a good choice. I have just compared the performance of them to two popular Wealth Preservation ITs - Capital Gearing Trust and Personal Assets Trust. They are perfectly good ITs but their returns over the last 5 years are lower than both multi asset funds. I have also considered these ITs, but to be part of a portfolio of active funds rather than to replace VLS60 or HSBC Global Strategy which I also hold.

Funnily enough, so have I. What I'm pondering is whether they might do better through really bad times.  But my 3 or so years of cash will help with that.  I've gone the other way with my active funds; more risk and more potential growth and 100% equities to keep my equities over 50%.

Albermarle

Audaxer said:

shinytop said:

BPL said:

Has anyone considered or done this? I loved the low cost of 0.22pc plus platform fee 0.2pc and the fact these funds are rebalanced without having to pay an ifa or diy effort. I'm thinking accumulation and sell units for income rather than natural yield from distribution. 

I do something similar; my main holdings are VLS60 and HSBC Balanced.  No real reason for splitting other than hedging/curiosity.  I'm thinking about replacing one of them (probably VLS) with a managed wealth preservation fund but I'm not convinced.  I also have a few years of cash and a small amount (10%) in more specialist managed equity funds.   

I think splitting between VLS60 and HSBC Global Strategy is a good choice. I have just compared the performance of them to two popular Wealth Preservation ITs - Capital Gearing Trust and Personal Assets Trust. They are perfectly good ITs but their returns over the last 5 years are lower than both multi asset funds. I have also considered these ITs, but to be part of a portfolio of active funds rather than to replace VLS60 or HSBC Global Strategy which I also hold.

I think it is better to compare the WP IT's with the lower risk multi asset funds , as the IT's hold around 40% equity and the 60% equity funds are more aiming for growth. I did this a few weeks ago with PNL , VLS 40 , HSBC GS Conservative, Fidelity allocator strategic. They are all very close on 3 year ( +/- 0.5%) Over one year PNL is better followed by HSBC. Over three months VLS 40 is lagging a bit over the other three.

[Deleted User]

Thrugelmir said:

Not just the fees to be considered. Also the funds performance. 

But of these two variables only the fees are known. Performance could go either way. Portfolios based on Vanguard’s plain vanilla indices regularly outperform complex portfolios with active funds which use the same asset allocation. 

Linton

Deleted_User said:

Thrugelmir said:

Not just the fees to be considered. Also the funds performance. 

But of these two variables only the fees are known. Performance could go either way. Portfolios based on Vanguard’s plain vanilla indices regularly outperform complex portfolios with active funds which use the same asset allocation. 

Possibly, however duplicating a passive fund's asset allocation with a carefully chosen set of active funds seems a somewhat bizarre strategy.  There is more to asset allocation than the equity/bond ratio.

Linton

Albermarle said:

Audaxer said:

shinytop said:

BPL said:

Has anyone considered or done this? I loved the low cost of 0.22pc plus platform fee 0.2pc and the fact these funds are rebalanced without having to pay an ifa or diy effort. I'm thinking accumulation and sell units for income rather than natural yield from distribution. 

I do something similar; my main holdings are VLS60 and HSBC Balanced.  No real reason for splitting other than hedging/curiosity.  I'm thinking about replacing one of them (probably VLS) with a managed wealth preservation fund but I'm not convinced.  I also have a few years of cash and a small amount (10%) in more specialist managed equity funds.   

I think splitting between VLS60 and HSBC Global Strategy is a good choice. I have just compared the performance of them to two popular Wealth Preservation ITs - Capital Gearing Trust and Personal Assets Trust. They are perfectly good ITs but their returns over the last 5 years are lower than both multi asset funds. I have also considered these ITs, but to be part of a portfolio of active funds rather than to replace VLS60 or HSBC Global Strategy which I also hold.

I think it is better to compare the WP IT's with the lower risk multi asset funds , as the IT's hold around 40% equity and the 60% equity funds are more aiming for growth. I did this a few weeks ago with PNL , VLS 40 , HSBC GS Conservative, Fidelity allocator strategic. They are all very close on 3 year ( +/- 0.5%) Over one year PNL is better followed by HSBC. Over three months VLS 40 is lagging a bit over the other three.

CGT is about 25% equity.  PNL always was a bit adventurous. In any case choosing one's wealth preservation assets on the basis of performance in the good times does not seem very appropriate to me.

BPL

Is that performance after all costs? I wonder why Scottish mortgage has done so well over covid period? 

garmeg

BPL said:

Is that performance after all costs? I wonder why Scottish mortgage has done so well over covid period? 

Tesla probably.

Prism

BPL said:

Is that performance after all costs? I wonder why Scottish mortgage has done so well over covid period? 

Tesla, Amazon, Alibaba, Tencent, Meituan Dianping, Nio... All had an amazing year so far

[Deleted User]

Linton said:

Deleted_User said:

Thrugelmir said:

Not just the fees to be considered. Also the funds performance. 

But of these two variables only the fees are known. Performance could go either way. Portfolios based on Vanguard’s plain vanilla indices regularly outperform complex portfolios with active funds which use the same asset allocation. 

Possibly, however duplicating a passive fund's asset allocation with a carefully chosen set of active funds seems a somewhat bizarre strategy.  There is more to asset allocation than the equity/bond ratio.

Does not matter how complex you go, future performance isn’t known and most active funds underperformed in the past. Eg https://www.marketwatch.com/story/more-evidence-that-passive-fund-management-beats-active-2019-09-12