Vanguard LifeStrategy® 60% Equity Fund - Accumulation

Snot-nosed_little_punk

Hi,

I'm a complete newb to intesting etc. I've seen Vanguard mentioned quite a few times on the forum as a means of investment. Someone with a decent track record who will do everything for you.

I've approx 10k I was thinking of investing in the LifeStrategy 60% fund for approx 10+ years. I would also hope to add £100 per month to this initial deposit. I'd like the MAX poss return with the least poss risk. So with that all in mind,

1) Is this a terrible idea ?

2) Is this a terrible idea atm in the middle of a global pandemic ?

3) Do I have better options ?

Many thanks

eskbanker

Investing in a global multi-asset fund is a good starting point for many investment journeys, but Vanguard does seem to receive disproportionate airtime, when its LifeStrategy offerings are no better than their competitors, and by some measures worse.

https://monevator.com/passive-fund-of-funds-the-rivals/ summarises the main players, although hasn't been updated for a couple of years, during which time the Blackrock MyMap series, for example, have been launched.

In terms of maximum return for minimum risk, this is pretty much the holy grail of investing, but it looks like you're aiming at the middle ground of medium(ish) risk and medium return, and could go either way from there, as it's always a trade-off....

In terms of timing, many think a correction or crash isn't far away, but people have been saying that for many years, so best be guided by the adage of 'time in the market rather than timing the market', i.e. just get on with it rather than waiting for what you feel may be better times to buy, as attempting the latter is notoriously difficult.

Ceme3000

The important thing is if there is a market crash that you don't panic and sell.  Think of it as a 'sale' and buy more if you can afford to, although from a psychological view that is hard to do. 10 years is a long time and any market correction in the near future will be long forgotten. 

george4064

Everyone wants max possible return with the least amount of risk as possible, however investing (and life in general) doesn’t work like that.

Higher risk = higher potential returns (and higher potential losses).

Lower risk = lower potential returns (but lower potential losses than higher risk investments).

Whether you go higher or lower risk, make sure you are investing in globally diversified multi-asset funds.

Albermarle

Snot-nosed_little_punk said:

Hi,

I'm a complete newb to intesting etc. I've seen Vanguard mentioned quite a few times on the forum as a means of investment. Someone with a decent track record who will do everything for you.

I've approx 10k I was thinking of investing in the LifeStrategy 60% fund for approx 10+ years. I would also hope to add £100 per month to this initial deposit. I'd like the MAX poss return with the least poss risk. So with that all in mind,

1) Is this a terrible idea ?

2) Is this a terrible idea atm in the middle of a global pandemic ?

3) Do I have better options ?

Many thanks

It is not a terrible idea but sometimes it is better to invest via a pension rather than outside a pension ( in a stocks and shares isa for example ) . What is your current pension provision and age ?

threlkeld53

To answer your questions....

1) It's not a terrible thing at all.
2) Don't be too pre-occupied about the global pandemic. There's always something happening anyway. Wars, earthquakes, countries falling out over trade deals, etc etc. Just get on with investing as soon as possible.
3) Put it this way, you say that you have £10k available. How else would you save it? Putting it in a building society/bank would generate approx £50-£100 a year.  Sticking it in Vanguard's LS60 for approx 10 years should earn you much more. I say 'should' because I'm stopping short at saying 'probably'. There's no guarantee obviously, but will Chelsea or Liverpool be relegated in the next 10 years? Probably not, but for the sake of disclaimers, people will add the phrase 'there's no guarantee they'll stay up'.

If you're considering Vanguard LifeStrategy 60, which is a multi-asset fund comprising 60% invested in assets, 40% bonds then it's worth also looking at:-
Blackrock's mymap5.
Legal & General Multi Index 5 and 6.
HSBC Global Strategy Balanced.

bostonerimus

Albermarle said:

Snot-nosed_little_punk said:

Hi,

I'm a complete newb to intesting etc. I've seen Vanguard mentioned quite a few times on the forum as a means of investment. Someone with a decent track record who will do everything for you.

I've approx 10k I was thinking of investing in the LifeStrategy 60% fund for approx 10+ years. I would also hope to add £100 per month to this initial deposit. I'd like the MAX poss return with the least poss risk. So with that all in mind,

1) Is this a terrible idea ?

2) Is this a terrible idea atm in the middle of a global pandemic ?

3) Do I have better options ?

Many thanks

It is not a terrible idea but sometimes it is better to invest via a pension rather than outside a pension ( in a stocks and shares isa for example ) . What is your current pension provision and age ?

Agreed. Vanguard Life Strategy funds are good, but the OP should take the time to compare them with similar funds from Blackrock, HSBC etc just to understand what they are buying. VLS has a bias towards UK stocks.

It is probably a good idea to use the money to make extra pension payments into a fund similar to VLS unless the OP has a particular reason for the ISA like having immediate access to the money.

Eco_Miser

1) No

2) No

3) Yes

MAX return is probably winning the Euromillions on a triple roll-over week.

Minimum risk is an FSCS guaranteed bank account.

Neither are a good idea for a 10 year investment.

If you do invest in VLS60 or any of the alternatives mentioned above, do so in a tax-advantaged account, either ISA or pension.

Pension has better tax relief, but you can't touch the money until you're 55, rising to 57 or more.

If you need the money in about 10 year's time, then you need to be aware that the long forecast stock market crash could come just before you want to withdraw the money, so maybe withdraw it earlier (if the crash hasn't happened - if it has, wait for the recovery) and keep it somewhere safer.

ColdIron

Snot-nosed_little_punk said:

I'd like the MAX poss return with the least poss risk

You can't have both, you're going to have to compromise somewhere, probably at both ends

eastmidsaver

personally i like the lifestrategy funds. they are simple, they will always ensure the relevant split is maintained (60% shares and 40% bonds in this example), and reasonable charges too.

Snot-nosed_little_punk

Albermarle - What is your current pension provision and age ?

50 y/o Civil Servant with 30+ years in Civil Service Pension