Vanguard LifeStrategy 60% Equity suitability?

Aged

I've done lots of reading and research and decided that VLS 60% seems right and suitable for my situation, but having said that, I don't feel comfortable with a 'one basket' scenario (portfolio size is between 250 - 500K). Perhaps this means that it isn't right for me? I can't see a way to incorporate it into a portfolio, it seems to be a complete solution. 

dunstonh

but having said that, I don't feel comfortable with a 'one basket' scenario 

It isn't really one basket as it is a fettered fund of funds.   However, alternatively, you could go with an unfettered fund of funds if you wish more variety with fund houses.  or build your own portfolio of single sector funds and vary the fund houses.

Aged

dunstonh said:

but having said that, I don't feel comfortable with a 'one basket' scenario 

It isn't really one basket as it is a fettered fund of funds.   However, alternatively, you could go with an unfettered fund of funds if you wish more variety with fund houses.  or build your own portfolio of single sector funds and vary the fund houses.

Hi dunstonh, happy new year to you. Yes, I understand what you are saying. In the past it has been suggested to me that it was best to consolidate everything and work across the board, but if I use the natural split (ie pot 1 and pot 2) and make pot 2 my 'longer term' investment/source of income, it might make it easier for me to understand and manage. 

Thrugelmir

Portfolios are best viewed as a whole. However they are invested. With one basket. The remainder will remain balanced as you draw the funds down. If pot 1 were to be VLS60.  What investments do envisage being in pot 2 ?  

Alexland

It's worth considering splitting your investments across at least 2 unrelated platforms and fund managers eg one for ISAs and another for pensions.
Rather than hold VLS60 at that valuation you would likely find it cheaper to at least run a 2 fund portfolio with 60% in an equity fund and 40% in a bond fund with a fixed/capped price platform. However the long term outlook for bonds isn't very attractive so it might be better going for a more defensive tilt on a slightly higher ratio of equities and a broader range of non-equity assets which might achieve the same volatility profile as VLS60 but with better growth potential.

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Thrugelmir said:

Portfolios are best viewed as a whole. However they are invested. With one basket. The remainder will remain balanced as you draw the funds down. If pot 1 were to be VLS60.  What investments do envisage being in pot 2 ?  

That remains to be seen! At present, it's roughly 60/40 also I believe, but some of the funds are duds so they need to be looked at too.

Thrugelmir

Aged said:

Thrugelmir said:

Portfolios are best viewed as a whole. However they are invested. With one basket. The remainder will remain balanced as you draw the funds down. If pot 1 were to be VLS60.  What investments do envisage being in pot 2 ?  

That remains to be seen! At present, it's roughly 60/40 also I believe, but some of the funds are duds so they need to be looked at too.

Yesterdays duds maybe tomorrow's heroes. 

Aged

Alexland said:

It's worth considering splitting your investments across at least 2 unrelated platforms and fund managers eg one for ISAs and another for pensions.
Rather than hold VLS60 at that valuation you would likely find it cheaper to at least run a 2 fund portfolio with 60% in an equity fund and 40% in a bond fund with a fixed/capped price platform. However the long term outlook for bonds isn't very attractive so it might be better going for a more defensive tilt on a slightly higher ratio of equities and a broader range of non-equity assets which might achieve the same volatility profile as VLS60 but with better growth potential.

Hi Alex, it's only pensions, no ISAs. I'm a novice at this, so just taking it step by step and trying to find the way forward. 
PS at the moment I'm not able to change platforms because some funds in my portfolio are suspended.

Aged

Thrugelmir said:

Aged said:

Thrugelmir said:

Portfolios are best viewed as a whole. However they are invested. With one basket. The remainder will remain balanced as you draw the funds down. If pot 1 were to be VLS60.  What investments do envisage being in pot 2 ?  

That remains to be seen! At present, it's roughly 60/40 also I believe, but some of the funds are duds so they need to be looked at too.

Yesterdays duds maybe tomorrow's heroes. 

Invesco High Income? Ninety One Cautious Managed/Special Sits? ASI ARS?

Albermarle

You could consider having VLS 60 alongside a similar offering from a Vanguard competitor. Although similar they are all a bit different, and relative performance can vary from year to year . Some have a fixed 60/40 split whilst some are 'risk targeted ' with a flexible split. Also some like VLS as it has a UK bias, and some prefer multi asset funds with no home bias.
Normally there would be no extra cost involved for having two similar multi asset finds rather than one .
https://monevator.com/passive-fund-of-funds-the-rivals/

El_Torro

I would say that yes, VLS60 is diversified enough for you to consider having at as your only fund in your pension. Even a pension of £500k size.

You could invest in more multi asset funds, for example HSBC Global Strategy or FIdelity Multi Asset Allocator. However you're not really adding to your diversification with these funds. You're still investing in roughly the same geographical locations, in roughly the same companies. So while it might feel more diversified it isn't really.

You could also invest in a Smaller Companies fund, or commodities, or gold, or have a stronger focus on Emerging Markets or Frontier Markets. Or even invest in specific industries. While this will make your fund more diverse it's arguable that you shouldn't be investing too much in these types of sattelite funds.

Not using a multi asset fund at all might be an option, especially if your investment size is £500k. You could save 0.10% or so in fund charges by doing this, and choosing your own geographical allocation. Is a saving of £500 per year worth it though, for the extra hassle? Bearing in mind that your £500k portfolio could lose or gain a lot more than £500 in less than a day's worth of trading.