L&G IIT vs VLS 80

matt1983

Looking at some performance charts i notice that over the last 5 years Legal&General International Index Trust has grown by roughly 100% compared to 5 year growth of about 70%.

Im not at all as educated on this stuff as many on here, so im just looking for some (not too complicated) explanations on the differences between these 2 funds and any obvious reasons for the growth difference. 

AlanP_2

The obvious differfence is that the L&G fund is 100% equities with no UK investments as it tracks the FTSE All World (ex UK) Index whilst VLS80 has 20% bonds and a spread of global trackers including a hefty chunk in the UK.

100% equities will have outperformed an 80/20 fund over 5 years and ex-UK has outperformed funds with a UK component.

underground99

Equities have done better than bonds over 5 years, and the international index trust only holds equities while the VLS80 has 80% equities and 20% bonds. 

Also in terms of how the equities are allocated, the International index trust doesn't have anything invested in emerging markets, and has less allocated to the UK stock markets (and more to USA which has done relatively well) than the VLS 80. 

dunstonh

Looking at some performance charts i notice that over the last 5 years Legal&General International Index Trust has grown by roughly 100% compared to 5 year growth of about 70%.

You would expect similar in most periods considering the differences between the two.

Im not at all as educated on this stuff as many on here, so im just looking for some (not too complicated) explanations on the differences between these 2 funds and any obvious reasons for the growth difference. 

They have different assets.   VLS80 only invests 80% in equities with 20% in fixed interest securities.   L&G invests 100% in equities.   Fixed interest securities are mostly used as risk reducers.  That means lower losses in negative periods but lower gains in positive periods.