Best Vanguard long term holding fund please.

TUVOK

I'm looking for the best Vanguard fund to put money into for my son's long term.
Basically the fund which can be left to tick along with no monitoring on their parts.

I hold Vanguard FTSE Developed World ex UK Equity Index Fund (Acc) which has performed well over the last 3 years for me, but I would welcome any other thoughts on a different fund.

Thank you.

Aylesbury_Duck

My son picked the VLS100 a few years ago, and it's done very nicely as a "set and forget" fund.  He put £2,000 in as a lump sum and has then trickled £100 a month into it for three years now.  I'm sure there have been Vanguard funds that have outperformed it in the time, but he's happy with the returns so far, and doesn't want to be hopping about trying to catch the best returns.

tebbins

TUVOK said:

I'm looking for the best Vanguard fund to put money into for my son's long term.
No one knows, literally. Over the long term equity is probably going to outperform bonds, and a broad, global equity index fund, like what you already hold is probably a sensible choice to capture those returns.
Basically the fund which can be left to tick along with no monitoring on their parts.
All Vanguard's accumulation funds do that.

I hold Vanguard FTSE Developed World ex UK Equity Index Fund (Acc) which has performed well over the last 3 years for me, but I would welcome any other thoughts on a different fund.

Thank you.

That fund is fine, why have you chosen to exclude the UK and emerging markets?

If you want to include the UK and like me think it's undervalued you could pick VLS100, for a "vanilla" global tracker there's FTSE Global All Cap.

george4064

Not sure what you mean by ‘best’, but in terms of highest potential long-term performance on the Vanguard platform would be (not guaranteed) the Vanguard FTSE Global All Cap Fund.

eskbanker

As above, 'best' to some could mean the one with the highest potential return (typically 100% equities), but of course the flip side of that is that it'll be matched with the risk of highest loss, so risk tolerance is a factor that shouldn't be ignored.

There isn't really a standard definition of 'long term' - to some people it means five years, others might think of ten and others fifteen or more - and this should be part of the decision process.

Why the desire for the best fund specifically from Vanguard's range, are your/his options constrained by virtue of using a Vanguard (J)ISA?

talexuser

I did have VLS100 for the grandkids (obviously for a 15 year plus timescale) but changed to DevWorld exUK after the referendum (as well as selling most of my UK funds for Global). Since then it had outperformed VLS100 by around 20%. It all depends if you believe the story of UK being so undervalued it is due for a boom in prices to the sunny uplands, I don't.

tebbins

I don't think the UK is due for a boom, just another decade of average returns which are likely to be higher than the rest of the world's based on relative valuation measures. Over the very long term uk and global large cap have performed about the same, so unless you see major secular structural changes that have changed the nature of UK relative to global capital markets (the classic "this time is different") you should be expecting a reversion to the mean i.e. that the UK has some catching up to do.

talexuser

Since the referendum all world exUK has gained around 80%, all world around 70%, and UK all share around 30%. That's a hell of a lot of catching up to do, may take a long time, if at all, and in that time might well be better returns elsewhere. September saw the second largest international outflow from UK equity funds ever.

IanManc

talexuser said:

Since the referendum all world exUK has gained around 80%, all world around 70%, and UK all share around 30%. That's a hell of a lot of catching up to do, may take a long time, if at all, and in that time might well be better returns elsewhere. September saw the second largest international outflow from UK equity funds ever.

Comparing the UK all share with the rest of the world as a bloc is simplistic. The gain in the all world ex UK and all world is driven by massive gains in the US market which makes up 58% of all world funds and 68% of developed world funds. US total return over the last 5 years is around 100%. Elsewhere, individually, Japan, Pacific ex Japan and Emerging Markets have all gained in percentage terms in the mid-30s over the last 5 years on the basis of total returns, while the UK is around the mid 20s, so there's not "a hell of a lot of catching up to do" with them.

MK62

talexuser said:

Since the referendum all world exUK has gained around 80%, all world around 70%, and UK all share around 30%. That's a hell of a lot of catching up to do, may take a long time, if at all, and in that time might well be better returns elsewhere. September saw the second largest international outflow from UK equity funds ever.

As well as the very large gains in US stocks, a fair proportion of that is also down to Sterling's relative weakness .........forex is one of the less talked about risks/rewards when investing overseas - since the Brexit referendum it's worked in a UK investor's favour, but that could reverse just as quickly.

tebbins

I don't think there's any disagreement here. You can see on trustnet that since the mid 2010s, its not so much that the UK (FTSE 100/All Share) has underperformed the global market (say FTSE world/IA global) as the US outperforming and dragging the total global market up with it.
I've covered this in more detail over a few posts in this thread from page 5 onwards: https://forums.moneysavingexpert.com/discussion/6300226/active-vs-passive-funds

And in this thread: https://forums.moneysavingexpert.com/discussion/6291746/is-ftse-100-this-yr-coming-yr-better-investment-than-vls100-s-p500-your-opinion-please/p1