Switching between Vanguard's Lifestrategy funds

Gazelle1985

Hi, 

I started investing in Vanguard's Lifestrategy Equity funds last year. I'd like to transfer some of my investment from the 20% into the 60% fund and wondered whether it would be better to do this when the market is down (so lower buying and selling costs) or if it doesn't really matter because it'll be relative whether the market is up or down?

Albermarle

On which platform are you holding these funds ? Many have no charges for switching funds .

Gazelle1985

No, there's no charges for switching funds - it's the Vanguard own platform. I'm just wondering if there are any risks to switching now while the market is volatile. It takes a few days for the switch to go through, so I wasn't sure whether there were any risks with the investment not being in any fund for a few days, or whether it doesn't really matter. 

HHarry

Well the risk is that you sell on a day that the market drops, and then buy on a day the market has gained.  However if the opposite were to happen you’d be up.

But on the basis that the price isn’t set until the end of the day, once you’ve made your decision to sell or buy, you’ll never be able to time it anyway.  So you might as well just pick a day and do it.

Thrugelmir

What are you hoping to achieve?  Markets move and and down continually. 

GazzaBloom

Thrugelmir said:

What are you hoping to achieve?  Markets move and and down continually. 

^^ this

LifeStrategy funds are designed to be held as a sole one fund investment, the only real sensible reason to change from one LifeStrategy fund to another is if your risk appetite has changed and you desire a higher or lower mix of equities, you mention "some" of your investments, leaving some in 20% and putting some in 60% and holding them together will have an aggregate affect depending on the values you hold in each.

That should be a fairly infrequent change, maybe move to lower equities in retirement for fund preservation in exchange for lower long term growth or the other way around if you think you may run out of money at the back end of retirement

ColdIron

Gazelle1985 said:

I'd like to transfer some of my investment from the 20% into the 60% fund and wondered whether it would be better to do this when the market is down (so lower buying and selling costs) or if it doesn't really matter because it'll be relative whether the market is up or down?

Unless the sums are large it won't make much difference and you can't time it anyway. If I was moving from an equity light fund to a higher equity fund I would prefer to do it now when equities are cheaper than they were

R_P_W

I'm in the process of doing it now on the VG platform, shifting from one of their Target Retirement funds in Lifestrat 80%.  Think there was just on option to click for switch funds.  Its taking a few days but not worried about variance in prices in short term.

gravlax

Gazelle1985 said:

No, there's no charges for switching funds - it's the Vanguard own platform. I'm just wondering if there are any risks to switching now while the market is volatile. It takes a few days for the switch to go through, so I wasn't sure whether there were any risks with the investment not being in any fund for a few days, or whether it doesn't really matter. 

Be aware that Vanguard UK cannot do a fund conversion (what they refer to as a 'switch' is a sell units and buy units). If you are OK with a sale of units and realizing a capital gain then no problem. Just saying be aware, because their customer support don't understand their switch service is not a fund unit conversion through the fund managers such as A J Bell can do.

Gazelle1985

Thanks everyone. I'm looking to move about £2-£3k. I'm in my mid 30s, and planning on investing for 5-10 years at least so I thought I could move to a slightly more risky fund with the hope that the returns would be slightly higher. I'm guess I'm just wondering if it actually matters when I move it, as both funds are up and down at the same time? Of course there's always the risk that I would sell when it's in a dip and buy at a higher price. 

GazzaBloom

Gazelle1985 said:

Thanks everyone. I'm looking to move about £2-£3k. I'm in my mid 30s, and planning on investing for 5-10 years at least so I thought I could move to a slightly more risky fund with the hope that the returns would be slightly higher. I'm guess I'm just wondering if it actually matters when I move it, as both funds are up and down at the same time? Of course there's always the risk that I would sell when it's in a dip and buy at a higher price. 

If were in my mid-30s, and had a desire to hold a LifeStrategy fund I would be in LifeStrategy 100, but I appreciate that may not be for everyone.