Vanguard S&S

P933alilli

As i have now maxed out on my DC pension I'm now considering putting 20k into a S&S lifestrategy fund, 60%equity,with Vanguard! 
  The charges seem reasonable at 0.22% p/a running costs plus an account charge of 0.15% p/a !
  Past performance appears to be impressive for the last 5 years with just 2018 being a negative return 4.04% and averaging return for the 5 years at c. +7.7% p/a.
  So as a complete novice would this be a good choice? 
  Also a couple of questions i take it that the difference between accumulation and income is either 1.dividends are added and compounded or 2.given to my account each year?
  And come April time would i be able to put in an extra £20 if i wished to do so?
  The 10 year past performance on a lump sum of 10k, from the graph on the vanguard site, appears to be a return of c.£13k which by my reckoning averages out at a return of 13% on the original investment each year! But that is trusting and taking vanguards figures at face value!
   Of course i could just drip feed cash in by a few £100 each month but from reading various comments on here its beneficial to pay in the lump sum?
  And i think i'd be keeping it in the fund for between 7-10 years! 

   I'm also looking potentially at a Vanguard global equity index tracker

Thrugelmir

If only the past did predict the future then investing would be so easy. Unfortunately future returns are uncertain. You've selected a solid company offering a decent product at a competitive price. Won't be the top performer nor the worst. We all start our journeys somewhere. Dip your toe in and learn from the experience as you go would be my suggestion. 

Albermarle

So as a complete novice would this be a good choice?  It is a standard run of the mill investment that you can not go horribly wrong with . Impossible to say if it is a good/best choice for you, without knowing a lot more details about you and your finances .
  Also a couple of questions i take it that the difference between accumulation and income is either 1.dividends are added and compounded or 2.given to my account each year? In simple terms yes 
  And come April time would i be able to put in an extra £20 if i wished to do so? Presume you mean £20K and yes you can after April 6th 

The 10 year past performance on a lump sum of 10k, from the graph on the vanguard site, appears to be a return of c.£13k which by my reckoning averages out at a return of 13% on the original investment each year! But that is trusting and taking vanguards figures at face value!

They are not going to lie about their performance figures .

More to the point the last ten years have been very good for investors . Predicting the future is not possible but I think pretty much everybody would be surprised to see such a good result for the next ten year, but who knows.

george4064

Just to pick up on something you mentioned “As I have now maxxed out on my DC pension pot”, what makes you believe/think this is the case?

I only ask because many people misunderstand what the limits are (whether they’re contribution or lifetime limits) and subsequently go on to make other decisions (could be bad) based on thinking that their DC pension is ‘maxxed out’.

Alexland

VLS60 is an OK fund, although in current market conditions it's touch and go whether it will be able to keep up with inflation over the medium term but it's a solid choice for a beginner looking for a medium risk DIY investment.

If you are investing two lots of £20k into an ISA then Vanguard Investor's 0.15% will cost you £60 pa so £180 over 3 years (or a bit more with investment growth) compared to fixed price iWeb, part of Halifax, at £100 setup and two £5 trades for £20k each = £110 over 3 or more years assuming you buy the accumulation version or take the income and don't need to reinvest it.

[Deleted User]

Vanguard 60/40 on Vanguard is 0.43% (0.15% platform, 0.22% OCF and an extra 0.06% in additional transaction fees the later two included in the fund price)
Always best to check 
https://www.vanguardinvestor.co.uk/content/documents/legal/vanguard-full-fund-costs-and-charges.pdf

Thrugelmir

Alexland said:

VLS60 is an OK fund, although in current market conditions it's touch and go whether it will be able to keep up with inflation over the medium term but it's a solid choice for a beginner looking for a medium risk DIY investment.

Which VLS fund would you suggest to provide an inflation beating return in the medium term? 

Alexland

Thrugelmir said:

Which VLS fund would you suggest to provide an inflation beating return in the medium term? 

Well the 80 or 100 seem more likely in the medium term but it means accepting more risk than the OP might be comfortable with. In the short term who knows as almost everything looks expensive.

GeoffTF

Deleted_User said:

Vanguard 60/40 on Vanguard is 0.43% (0.15% platform, 0.22% OCF and an extra 0.06% in additional transaction fees the later two included in the fund price)
Always best to check 
https://www.vanguardinvestor.co.uk/content/documents/legal/vanguard-full-fund-costs-and-charges.pdf

The transaction costs are not fees, they are costs incurred in running the fund. Vanguard has said that the transaction costs quoted by fund managers are not necessarily representative of the real costs, and cannot be used to compare funds with different managers.

Thrugelmir

Alexland said:

Thrugelmir said:

Which VLS fund would you suggest to provide an inflation beating return in the medium term? 

Well the 80 or 100 seem more likely in the medium term but it means accepting more risk than the OP might be comfortable with. In the short term who knows as almost everything looks expensive.

No guarantees of beating inflation with a higher equity allocation over the medium term. The SP500 has previously spend an entire decade underperforming cash. Unhedged portfolios also are exposed to currency risk. 

Alexland

Thrugelmir said:

No guarantees of beating inflation with a higher equity allocation over the medium term. The SP500 has previously spend an entire decade underperforming cash. Unhedged portfolios also are exposed to currency risk. 

Which VLS fund would you suggest to provide an inflation beating return in the medium term?