Vanguard Lifestrategy - UK bias issue

MaxiRobriguez

talexuser said:

Unfortunately I don't see much evidence of the great trade deals and investment available with the pandemic debt, just lots or words of sunny uplands and few actions. 

Doesn't matter for a lot of companies with global footprint.

UK market has been ignored for a long time, some companies still offer attractive valuations and high div yields.

Thrugelmir

aroominyork said:

Thrugelmir said:

talexuser said:

 The hype at the moment is a bounce in UK because of poor valuations and low values and the success of the vaccines. 

That trade has been and gone. Rerating started last November as investors bought in. Now it's question of finding companies with potential for real growth and identifying those that flatter to deceive. 

The UK may have performed a few points better than Global averages since November but that does not constitute a re-rating. Below are one year (top) and three year (bottom) views of UK All Companies against Global - see also the five year and ten year cumulative performance stats. There is still a lot of catching up to do, and P/E ratings support the UK market still being 'cheap'.

Take a look at RMMC. On top of the share price return add the capital distributions.  

Or MTU. 

aroominyork

Thrugelmir said:

aroominyork said:

Thrugelmir said:

talexuser said:

 The hype at the moment is a bounce in UK because of poor valuations and low values and the success of the vaccines. 

That trade has been and gone. Rerating started last November as investors bought in. Now it's question of finding companies with potential for real growth and identifying those that flatter to deceive. 

The UK may have performed a few points better than Global averages since November but that does not constitute a re-rating. Below are one year (top) and three year (bottom) views of UK All Companies against Global - see also the five year and ten year cumulative performance stats. There is still a lot of catching up to do, and P/E ratings support the UK market still being 'cheap'.

Take a look at RMMC. On top of the share price return add the capital distributions.  

Or MTU. 

Are picking out a couple of small/micro cap investment trusts (including the crazily volatile RMMC, FE149 with only £54m AUM) and saying that shows the UK has been re-rated?

Thrugelmir

aroominyork said:

Thrugelmir said:

aroominyork said:

Thrugelmir said:

talexuser said:

 The hype at the moment is a bounce in UK because of poor valuations and low values and the success of the vaccines. 

That trade has been and gone. Rerating started last November as investors bought in. Now it's question of finding companies with potential for real growth and identifying those that flatter to deceive. 

The UK may have performed a few points better than Global averages since November but that does not constitute a re-rating. Below are one year (top) and three year (bottom) views of UK All Companies against Global - see also the five year and ten year cumulative performance stats. There is still a lot of catching up to do, and P/E ratings support the UK market still being 'cheap'.

Take a look at RMMC. On top of the share price return add the capital distributions.  

Or MTU. 

Are picking out a couple of small/micro cap investment trusts (including the crazily volatile RMMC, FE149 with only £54m AUM) and saying that shows the UK has been re-rated?

Merely illustrating the point that's plenty of excellent UK companies in the wider market if one spends the time researching.  Macro views of broad indexes are of no interest to me. Never have been. That's how noise gets generated. 

aroominyork

Thrugelmir said:

aroominyork said:

Thrugelmir said:

aroominyork said:

Thrugelmir said:

talexuser said:

 The hype at the moment is a bounce in UK because of poor valuations and low values and the success of the vaccines. 

That trade has been and gone. Rerating started last November as investors bought in. Now it's question of finding companies with potential for real growth and identifying those that flatter to deceive. 

The UK may have performed a few points better than Global averages since November but that does not constitute a re-rating. Below are one year (top) and three year (bottom) views of UK All Companies against Global - see also the five year and ten year cumulative performance stats. There is still a lot of catching up to do, and P/E ratings support the UK market still being 'cheap'.

Take a look at RMMC. On top of the share price return add the capital distributions.  

Or MTU. 

Are picking out a couple of small/micro cap investment trusts (including the crazily volatile RMMC, FE149 with only £54m AUM) and saying that shows the UK has been re-rated?

Merely illustrating the point that's plenty of excellent UK companies in the wider market if one spends the time researching.  Macro views of broad indexes are of no interest to me. Never have been. That's how noise gets generated. 

You said nothing of the kind. You said “[a bounce in UK because of poor valuations and low values and the success of the vaccines] has been and gone. Rerating started last November as investors bought in.” And then “Now it's question of finding companies with potential for real growth…”. It is clear you said the UK market is no longer undervalued and today you have to hunt for value, which implies that buying the market would have been a good strategy before the “rerating [which] started last November” but is no longer a sound strategy. 

First, I have explained there was no meaningful rerating of the UK market, just a bounce of a few points. Second, you are saying you do not actually look at the UK market, “Macro views of broad indexes are of no interest to me” and all you care about is picking shares/funds/ITs, but that is totally inconsistent with “a bounce in UK” which is not a meaningful statement if it is just about a couple of carefully selected ITs. Third, noise is not generated so much by broad market moves as by people bigging up a ridiculously volatile fund or IT. So here is your RMMC since launch, charted against UK smaller companies. Buy it at the wrong time and it could be painful, and right now might well be one of those times.

Thrugelmir

Just for the record the "carefully selected" IT's were actual investments made last year and realised this. Some of us do actively invest in sizable amounts. While leaving global equity markets to look after themselves. There's many constituents on the FTSE that I wouldn't touch with a barge pole. My UK bias can be seen in the thread Actives vs Passives

https://forums.moneysavingexpert.com/discussion/5719522/great-british-invest-off-or-passive-v-active-portfolios#latest

Which is representative of part of my actively managed portfolio. I publish this so there's no accusations of falsifying the figures. 

aroominyork

Thrug, I said nothing about what you own. I made the point that your argument about UK valuations was both incorrect and not logically made, and I stand by that view.

Thrugelmir

aroominyork said:

Thrug, I said nothing about what you own. I made the point that your argument about UK valuations was both incorrect and not logically made, and I stand by that view.

Without differing opinions there'd be no markets. 

adindas

eastmidsaver said:

hello.   so i am a fan of this fund,   and have been investing in it since around January every month in my SIPP.
however,   i have only just realised how big the UK bias is on it  (i think around 22% equity),  and this clearly impacts the overall performance.
VG state in on the KID that the UK bias is because that is what the customers want (i fund that hard to believe).
i am just wondering,  is there a simple way i can just buy 2 or 3 trackers to almost replicate this?   
for instance would a global all index, global bond index, and emerging markets index the cover the majority of it?
i appreciate this way means i need to rebalance myself every now and then,  which is why i;d only consider if can do it with a smaller number of funds.
thanks.

From your post I believe you are talking about VLs . VLS100 available on vanguardinvestor.co.uk is more UK Biased as it is generally intended for UK investors. Also because it is priced in GBP.

I do not think with such allocation it is "big the UK bias".

As you would expect UK investors will be more familiar with UK market and therefore will likely to buy UK companies and index. VLS100 provides reasonable coverage on UK stocks FTSE index to avoid the need for people to buy separate FTSE index and UK Individual company Stock. But In the meanwhile it also provides enough level of global divessification as you will notice from the allocation above.

Currently the UK index in underperforming compared to S&P 500 for instance due to slow COVID-19 recovery and recently the new COVID-19 delta variance. But it might be a good thing as it has not reached the pre-Covid19 pandemic high, let alone an ATH. So they still have a lot of room to grow much faster once the economic reopening is successful. In the meanwhile S&P500 already reach ATH a few weeks ago, so less room to grow. The stock market shell off last week until monady this week might be just an overreaction to COVID-19 Delta variance as you see it is now starting to bounce back.

Thrugelmir

adindas said:

eastmidsaver said:

hello.   so i am a fan of this fund,   and have been investing in it since around January every month in my SIPP.
however,   i have only just realised how big the UK bias is on it  (i think around 22% equity),  and this clearly impacts the overall performance.
VG state in on the KID that the UK bias is because that is what the customers want (i fund that hard to believe).
i am just wondering,  is there a simple way i can just buy 2 or 3 trackers to almost replicate this?   
for instance would a global all index, global bond index, and emerging markets index the cover the majority of it?
i appreciate this way means i need to rebalance myself every now and then,  which is why i;d only consider if can do it with a smaller number of funds.
thanks.

Currently the UK index in underperforming compared such as S&P 500 due to slow COVID-19 recovery and recently the new COVID-19 delta variance. But it might be a good thing as it has not reached the pre-Covid19 pandemic high, let alone an ATH. So they still have a lot of room to grow much faster once the economic reopening is successful. In the meanwhile S&P500 already reach ATH a few weeks ago, so less room to grow. The stock market shell off last week until yesterday might be just an overreaction to COVID-19 Delta variance.

Delta is a global issue. The UK opening up is a clear illustration of the challenges that others are going to face. Nor forget that we are in a fortunate position as far as vaccination uptake is concerned. The world is watching the UK and treating it akin to a petri dish. In many US states the uptake for vaccinations is stalling.  The news coming out of Vietnam in recent days is an indication of the challenges that lie ahead. With many global companies having switched production of China to Vietnam.