Vanguard funds - which to choose

WillowLea1962

jwelly all the advice above is sound and well structured.  However I would add that you need to filter out the noise, particularly from the newspapers, TV media,YouTube, etc etc about which ever fund or market or sectors are doing this and topping the league tables.

Accept that you won't have the very best performing investments because it's impossible to guess right 100% of the time.  So as Monevator always advises go with simple and low fees (costs) - being the main things that you personally can control.  Only look at the fund information every 6 months to a year.  If it goes down in price use it as an opportunity to buy more and re-invest any distributions or choose the accumulation units if you think you will find that easier.    

Don't over analyse at the expense of getting started.  Vanguard are the huge business they are because their products and services work well and are deliberately kept simple to use.

Albermarle

  Vanguard are the huge business they are because their products and services work well and are deliberately kept simple to use.

Not disputing this statement, but the VLS funds have been underperforming one of their main competitor in the UK for these type of low cost multi asset funds. . The HSBC global strategy funds. Also they are cheaper.

Not a whole lot in it, and in future may be different, but worth noting.

dunstonh

An interesting read, so thanks very much. I'm leaning more towards VLS now for sure. Either 40 or 60.

Just be aware that monevator is a Vanguard fanboy site.  They have a bias towards Vanguard.  That is their right as they can print pretty much what they like on their own website but it is just opinion.    It doesn't mean it is right.

 So as Monevator always advises go with simple and low fees (costs) 

Yet it recommends VLS over cheaper alternatives that have been performing better.

   Vanguard are the huge business they are because their products and services work well and are deliberately kept simple to use.

And they have been successful at getting people on the internet to promote them and almost become obsessed by them despite not being the best in class in most areas.

Eyeful

I have never heard John Bogle claim Vanguards aim was to be  the "best in class" .

 If I remember correctly it was something like "to give the fund holders a consistent fair share of the market returns at a fair price". 

Just how many of the current "best in class" managers, will still remain "best in class" in say 10 years time?
 
When Vanguard started their passive index fund, they where laughed at by the professional money managers who could not believe their customers would desert them for a simple index tracker fund.

 I think that Vanguard striving to keep their fees low, is what put the break on the constant increase  in fund annual charges that I remember.

Linton

Eyeful said:

I have never heard John Bogle claim Vanguards aim was to be  the "best in class" .

 If I remember correctly it was something like "to give the fund holders a consistent fair share of the market returns at a fair price". 

Just how many of the current "best in class" managers, will still remain "best in class" in say 10 years time?
 
When Vanguard started their passive index fund, they where laughed at by the professional money managers who could not believe their customers would desert them for a simple index tracker fund.

 I think that Vanguard striving to keep their fees low, is what put the break on the constant increase  in fund annual charges that I remember.

I don’t see what relevance the history has for choosing funds in 2022. An investment portfolio is not a shrine.

I suggest you compare the price and performance of the fixed allocation VLS funds with equivalent HSBC risk targeted Global Strategy funds. Both are multi-asset and based on index funds. The figure I see indicate that HSBC do the job more effectively and are cheaper,

dunstonh

Just how many of the current "best in class" managers, will still remain "best in class" in say 10 years time?

It's not about fund managers.  It's about comparable tracker funds.   

 I think that Vanguard striving to keep their fees low, is what put the break on the constant increase  in fund annual charges that I remember.

Charges had been decreasing long before Vanguard arrived in the UK.  They certainly helped give it a bump but now others have gone further than them.

I have never heard John Bogle claim Vanguards aim was to be  the "best in class" .

yet if you go by youtube and other fanboy sites you would think they were.   And with the OP being a new investor who is looking up info on the internet, it would be very easy for them to join those that pray at the church of Vanguard.

jwelly

So as Monevator always advises go with simple and low fees (costs) 

Yet it recommends VLS over cheaper alternatives that have been performing better.

Such as? Any suggestions I can look into would be appreciated, keeping in mind the following about me:

• No previous investing experience

• In my early thirties

• £20k + savings

• Mid term investment (around 5 years)

• Planning a £1,500 initial investment, then drip feed around £100 monthly max.
• Med risk. I only want to be checking on my fund every few weeks or months.
• Low cost ideal. Hence my initial interest in Vanguard.

Eyeful

Linton I have done as you suggested and compared the Trustnet graphs of VLS 60 against the HSBC nearest equivalent.

To my eyes for 4 years they seem the same until about 2021. This out performance may of course just be temporary.

There is no arguing that the HSBC is cheaper.

MK62

Eyeful said:

compared the Trustnet graphs of VLS 60 against the HSBC nearest equivalent.

....but they are different funds, and aren't operated in quite the same way.....

VLS is fairly straightforward X:Y equity:bonds, with a UK bias.

HSBC GS is risk targetted (ie basically the equity percentage varies within a certain range with their outlook on the markets), includes a slug of property investments, and has no UK bias.....

Whether this is of that much interest to the average retail investor is debatable of course - it certainly doesn't answer any questions about which is best for them...

As to performance charts, any differences might be as much down to sterling's strength/weakness compared to other currencies (over the chart period), as they are to actual underlying investment performance.......

Linton

Eyeful said:

Linton I have done as you suggested and compared the Trustnet graphs of VLS 60 against the HSBC nearest equivalent.

To my eyes for 4 years they seem the same until about 2021. This out performance may of course just be temporary.

There is no arguing that the HSBC is cheaper.

HSBC Global Strategy Balanced currently at 52% equity out performed both VLs60 and VLS40 in 4 out of the past 5 years. The largest difference is over the past two troubled years.

This could be explained  by better management of the non-equity where simple fixed allocations do not make sense to me.

in any case I thought the theory was that lower charges always win out over the long term..