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Vanguard LifeStrategy 60% Equity suitability?

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  • _pete_
    _pete_ Posts: 224 Forumite
    Part of the Furniture 100 Posts Name Dropper
    Re putting all your eggs in one basket, I went through a similar thought process when I took out my SIPP.

    Initially I had my plot split 50:50 between Vanguard LS60 (one half of the pot) and about 10 non-vanguard tracker funds (other half of the pot) which each tracked a different index in roughly the same proportions as the LS60.  The difference in performance between the two approaches, taking charges into account, was negligible but rebalancing the 10 trackers was a faff so I sold them all and bought the HSBC equivalent of LS60 which apparently has a slightly different philosophy and geographical weighting - but seems to have delivered similar performance over the period.

    I subsequently split my pot over two platforms (following the same eggs in one basket rationale), but made a bit of a mistake as it turns out the two platforms I chose share the same back office so if there was a massive IT problem I think both would be affected.

     basically wanted a sensible 'invest and forget about it ' approach and the performance of the two funds throughout the  events of the last 2 years has shown me they've behaved exactly as I'd hoped they would, given my level of risk tolerance.
  • Aged
    Aged Posts: 457 Forumite
    Part of the Furniture 100 Posts Name Dropper Photogenic
    _pete_ said:
    Re putting all your eggs in one basket, I went through a similar thought process when I took out my SIPP.

    Initially I had my plot split 50:50 between Vanguard LS60 (one half of the pot) and about 10 non-vanguard tracker funds (other half of the pot) which each tracked a different index in roughly the same proportions as the LS60.  The difference in performance between the two approaches, taking charges into account, was negligible but rebalancing the 10 trackers was a faff so I sold them all and bought the HSBC equivalent of LS60 which apparently has a slightly different philosophy and geographical weighting - but seems to have delivered similar performance over the period.

    I subsequently split my pot over two platforms (following the same eggs in one basket rationale), but made a bit of a mistake as it turns out the two platforms I chose share the same back office so if there was a massive IT problem I think both would be affected.

     basically wanted a sensible 'invest and forget about it ' approach and the performance of the two funds throughout the  events of the last 2 years has shown me they've behaved exactly as I'd hoped they would, given my level of risk tolerance.
    Hi Pete, looks like we're on the same wavelength, thanks for your input. I have an existing portfolio which is pretty messed up, and I'm trying to work from 'what I've got' to 'what I want'. I'm finding it all a bit confusing, but hopefully I'll get to where you are soon and stop having to worry about it all!
  • _pete_
    _pete_ Posts: 224 Forumite
    Part of the Furniture 100 Posts Name Dropper
    edited 16 January 2021 at 7:11PM
    You're welcome.  I should add that I paid a one-off fee of £800 to an IFA to set it all up at the start (when I knew virtually nothing about SIPPs or platforms). He researched and chose the various trackers, and what proportion of my portfolio should be in each one then did all the admin of setting them up. He also showed me how to buy and sell funds so I could do it independently going forward.  Looking back, it was money well spent.
  • BananaRepublic
    BananaRepublic Posts: 2,103 Forumite
    Fifth Anniversary 1,000 Posts Name Dropper Combo Breaker
    edited 17 January 2021 at 7:06PM
    ChilliBob said:
    I could yeah, but I think it'd fly in the face of all the reading I had done and intend to do! I really see any kind of deviation from the global index funds side of things (and their sensible counterparts) to be a pretty small bucket/pot. 
    A thematic portfolio doesn't mean not holding global equities, i.e. tech. Just a different means of allocating your money. Around 1% of global companies generate all the returns. The remaining 99% probably won't even outperform cash over the longer term. 
    What is the source for that claim? 
    No confusion. There's comprehensive research papers on the topic. In relation to the major cap stocks in the US and globally.  
    Do you have a link? And what is your figure for percentage returns? 
    Has nothing to do with returns. Research these papers by Hendrik Bessembinder for starters.

    Do stocks outperform Treasury bills?

    Wealth Creation in the U.S. Public Stock Markets 1926 to 2019

    It looks like you are referring to this paper:
    It's very interesting, and I'm not sure I understand what it means, except at the superficial level.

    From the abstract:

    "the majority, 56% of US stocks and 61% of non-US stocks, under perform one-month US Treasury bills over the full sample."

    "we find that the top-performing 1.3% of firms account for the $US 44.7 trillion in global stock market wealth creation from 1990 to 2018. Outside the US, less than one percent of firms account for the $US 16.0 trillion in net wealth creation."

    Unless I mistaken this statement applies to the entire time period studied. It's counter intuitive, but perhaps this is saying that most companies grow, with a few ups and down on the way, then fizzle out and die. Consequently they create no wealth where wealth is considered solely as the value of the stocks and any dividends. Only a few companies go on to be long term successes. 

    mark55man said:
    Thanks - will have a look.  That means by picking individual shares you have a 1 in a 100 chance of hitting the growth company (big enough to effect the global weighing machine, rather than a tiddler doubling), unless you have an edge - poor odds unless you use a tracker where you will pick up the growth through association
    You can't draw that conclusion unless you buy 100 companies at random and then hold them for several decades, in which case the study suggests that you would on average have one success. In truth people buy shares in companies with potential, and then sell them later on either to realise profits, or because they think they are no longer a good bet. Anyway, don't think that I'm advising you to buy shares, they are higher risk then buying into a fund.





  • 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.
    struggling to find an alternative to vanguard, as a second option... tried Blackrock, but they don't have a platform where I would be using like I have been using vanguard`s platform.. 
  • 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.
    struggling to find an alternative to vanguard, as a second option... tried Blackrock, but they don't have a platform where I would be using like I have been using vanguard`s platform.. 
    Possible option is Fidelity Multi Asset Allocator - invests in other peoples funds like Blackrock for example.
  • Alexland
    Alexland Posts: 10,183 Forumite
    Eighth Anniversary 10,000 Posts Photogenic Name Dropper
    edited 18 January 2021 at 8:52AM
    struggling to find an alternative to vanguard, as a second option... tried Blackrock, but they don't have a platform where I would be using like I have been using vanguard`s platform.. 
    Depends what you are investing in but for multi asset or passive then L&G and HSBC are both ISA managers. Once your account valuations get big enough it's better to be with whole market fixed or capped price platforms. Vanguard are hardly capped as £375 pa is obscenely high.
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