Vanguard Stocks and Shares ISA

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eskbanker said:

Mick70 said:

I was looking into the vanguard lifestyle funds online and it found argument that because they are a fixed allocation they may not be a good thing if crash happened and also high exposure to the US markets which have performed well in recent years but will dip at some point.  Whereas they offer retirement funds i.e a 2030 fund,  which will automatically change in allocation as you near that year , although it didn't specify if again a large proportion is invested in US?

Just to be clear, their target retirement funds are the lifestyle ones, as this is the generic term for funds whose allocation changes over time, such as towards retirement - the fixed allocation ones you were labelling as such were presumably the (different) LifeStrategy ones....

Vanguard have the 'LifeStrategy' series of funds, then they have a 'Target Retirement' series such as 'Target Retirement 2025', 'Target Retirement 2030' and so on. The TR funds move to progressively 'safer' asset allocations as the chosen retirement age is reached.

Mick70

Which do people prefer ?
the fixed allocation life strategy funds or the retirement funds where the bonds equity allocation changes over time ?

eskbanker

Mick70 said:

Which do people prefer ?
the fixed allocation life strategy funds or the retirement funds where the bonds equity allocation changes over time ?

Depends on what their requirements are - the retirement funds are structured on the basis that holders will largely be out of equities by the target date, which may be suitable for those needing access to a significant pile of cash on a specific date (e.g. to buy an annuity), but that's increasingly the exception rather than the rule, so for those planning to remain invested for the foreseeable future, the fixed allocation products are likely to be more appropriate.

There are other options too (beyond Vanguard), such as risk-targetted products, which vary allocations to fit a defined risk profile rather than dogmatically sticking to a fixed percentage of equities and bonds in all market conditions....

Costabit

Mick70 said:

Which do people prefer ?
the fixed allocation life strategy funds or the retirement funds where the bonds equity allocation changes over time ?

A fixed allocation for me.
The issue as I see it with the Target Retirement funds are that their ( in this case Vanguards ) timetable and mine will be different when it comes to reducing equity holdings.
Would prefer to alter risk levels etc. at my pace

dunstonh

I prefer fluid allocations which rules out both VLS and the TR.   However, if you really must restrict yourself to Vanguard (which I wouldn't - not because its Vanguard but I wont restrict to any one fund house), then it would be VLS for me.

Mick70

thank you for the replies

Mick70

when looking to start one up (lifestrategy) it asks if lump sum or monthly regular payments ?
can you open with a lump sum and then start monthly payments In April ? 

Mick70

also, as get closer to retirement , if start off with say 60:40  equity:bonds,  once reach retirement could you change it to 20:80 , is that easy to do ?  or do you cash it in then ?
thanks again

Thrugelmir

Mick70 said:

Which do people prefer ?
the fixed allocation life strategy funds or the retirement funds where the bonds equity allocation changes over time ?

Retirement funds are bettered suited to those who wish to invest and forget.  Unsurprising given the exceptional returns over the past few years there's been an increasing level of complacency towards high equity content portfolios. 

Mick70

i noticed you can open it with a lump sum and/or a monthly direct debit .
Is it then set in stone ?    Or could i open one with a lump sum and then pay in a monthly direct debit from april onwards ?