Suggestion needed for VLS80

Yanling

Hi there, I am going to add money in VLS 80's each fund with the same proportion as the VLS80 itself, which is far less ongoing charge ( around 0.12% instead of 0.22%), i do not know if this could be the same fund performance, same outcome and an alternative way but less charge as if i add money to VLS80 directly? Thank you! 

Albermarle

Yes you gain 0.1% ( not what I would call 'far less' considering VLS80 could change in value by 100 times that in one day) but it is more work and probably will bring some trading charges when you have to rebalance.

Yanling

Albermarle said:

Yes you gain 0.1% ( not what I would call 'far less' considering VLS80 could change in value by 100 times that in one day) but it is more work and probably will bring some trading charges when you have to rebalance.

Hi there, I will just copy the VLS80 portfolio data (funds' names and investment money percentage), when it changes then i will follow the changes , instead of doing the rebalance as i do not know how to do it. eg, if they drop a fund then i will stop add money in it, but not sell; if they add a new fund i will add money to the new fund too. if it is ok? Many thanks!

GotPrincess

Myself Id just go for the one they do all that for you been making a easy 3% so far and none of the leg work (short term) 

bowlhead99

Yanling said:

Albermarle said:

Yes you gain 0.1% ( not what I would call 'far less' considering VLS80 could change in value by 100 times that in one day) but it is more work and probably will bring some trading charges when you have to rebalance.

Hi there, I will just copy the VLS80 portfolio data (funds' names and investment money percentage), when it changes then i will follow the changes , instead of doing the rebalance as i do not know how to do it. eg, if they drop a fund then i will stop add money in it, but not sell; if they add a new fund i will add money to the new fund too. if it is ok? Many thanks!

The holdings are not published in real time, as the factsheets are only published some time after the end of the month, so you will get different returns of course; they are going to make rebalancing adjustments on a daily or weekly or monthly basis to stick to their strategy of having 20% in bonds and whatever proportions between the bond fund types and between the UK equities and various international equity funds, and you will not see that until you get the next factsheet with a rolling delay.

And if they drop a fund because they are adding another one in its place, and you don't drop the old one but decide to keep it in your portfolio, and then you try to add the new one as well in the proportions that they added their new one, all your ratios will end up different to theirs.  To 'rebalance' means to sell and buy as necessary to keep your portfolio in line with your target allocations.  If you wanted to keep it tight to the allocation they are using, you would need to keep making little tweaks here and there, buying and selling the individual funds to keep to their ratios that you see on the factsheet.  That is a load of hassle for 0.1% per year, and your returns over the course of the year may differ from theirs by 0.1% anyway, causing it to have been a huge waste of effort, even if your platform doesn't charge you fees for every buy or sell transaction.

Of course, you might decide that you are not bothered about matching their allocation precisely and just want something similar to what they end up with. It is not hard to get 'something similar' and just rebalance it every so often whenever you can be bothered.  However, if you are coming at the 'portfolio construction and maintenance' game from a place of low knowledge, and 'don't know how to rebalance', I would very much doubt it is worth the hassle of maintaining a 15-fund portfolio to try to save a very small fraction of a percent of fees, over the more common course of action which is just buying the 1-fund portfolio off the shelf and have them do all the maintenance.

noclaf

Save yourself the hassle IMO.
I use the Vanguard platform, direct debit to the VLS each month...fire and forget,
no faffin about or need to overthink about trying to mimic the VLS fund. The value of saving my time is far more precious than the negligible saving you will make but each to their own. 

dunstonh

Hi there, I am going to add money in VLS 80's each fund with the same proportion as the VLS80 itself, which is far less ongoing charge ( around 0.12% instead of 0.22%)

Yes, it is a tiny difference in charges.  However, you will need to look at it each quarter to rebalance it.  

, i do not know if this could be the same fund performance, same outcome and an alternative way but less charge as if i add money to VLS80 directly? 

You will get different returns as its likely you won't rebalance at the same frequency or adjust the funds when Vanguard change the underlying funds. 

If you are going to mimic the asset allocation, then there are better funds to use than VLS80.  Using an unfettered fund of funds for example as you can go cheaper still and get better tracker funds (vanguard is not the best in every area).   However, in the event you are not going to make changes yourself as the underlying assets change then you should stick with the multi-asset fund.

Yanling

Thanks for all the suggestions, i will keep investing VLS80 itself

Albermarle

Or look at direct competitors for Vanguard . The charges will be similar but performance can vary . Not by a huge amount but a lot more than 0.1%.https://monevator.com/passive-fund-of-funds-the-rivals/

Yanling

Albermarle said:

Or look at direct competitors for Vanguard . The charges will be similar but performance can vary . Not by a huge amount but a lot more than 0.1%.https://monevator.com/passive-fund-of-funds-the-rivals/

Hi, i am not quite good at english,  the article shows that investing VLS is a good choice?

Albermarle

Yanling said:

Albermarle said:

Or look at direct competitors for Vanguard . The charges will be similar but performance can vary . Not by a huge amount but a lot more than 0.1%.https://monevator.com/passive-fund-of-funds-the-rivals/

Hi, i am not quite good at english,  the article shows that investing VLS is a good choice?

It shows that Vanguard is one of a few companies offering similar products . They are not a bad choice but some would say the alternatives could be better.