Vanguard funds - which to choose

eastmidsaver

i like the life strategy funds.    just choose your risk level  (equity / bonds split) ,  and then let it do the rebalancing for you.
but it does come at a slightly higher cost of 0.22%.  still decent value though.

bostonerimus

eastmidsaver said:

i like the life strategy funds.    just choose your risk level  (equity / bonds split) ,  and then let it do the rebalancing for you.
but it does come at a slightly higher cost of 0.22%.  still decent value though.

Yep, I like multi-asset funds as they give you immediate diversification. People with little interest or desire to manage their investments get a ready made portfolio.

zagfles

Albermarle said:

  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.

The main reason for this appears to be the HSBC funds are more US biased and the Vanguard ones more UK biased, and US equities have done better than UK.

Look at the geographical equity makeup of the HSBC funds in the facsheets, the equities portion is well over 50% US whereas Vanguard are around 30% US. Personally, I don't think over 50% US is very balanced even if it does reflect market cap.

MK62

.......plus the GBP v USD rate which has given the GS fund a bit more of a kick....

grumiofoundation

zagfles said:

Albermarle said:

  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.

The main reason for this appears to be the HSBC funds are more US biased and the Vanguard ones more UK biased, and US equities have done better than UK.

Look at the geographical equity makeup of the HSBC funds in the facsheets, the equities portion is well over 50% US whereas Vanguard are around 30% US. Personally, I don't think over 50% US is very balanced even if it does reflect market cap.

Not sure where you got this data from?

VLS 100 

Vanguard U.S. Equity Index Fund GBP Acc	19.4%
Vanguard FTSE Developed World ex-U.K. Equity Index Fund GBP Acc*	19.3%
Vanguard FTSE U.K. All Share Index Unit Trust GBP Acc	19.2%
Vanguard S&P 500 UCITS ETF (USD) Accumulating	15.3%

*of which ~70% is US

so 19.4 + (19.3*0.7) + 15.3 = 48.1

VLS 60 contains the following

Vanguard FTSE Developed World ex-U.K. Equity Index Fund GBP Acc	19.3%
Vanguard U.S. Equity Index Fund GBP Acc	15.3%

(19.3*0.7) + 15.3 = 28.8 

Again 28.8 = 48% of 60



For HSBC adventurous (80% equity) factsheet is just over 50% US equity. So equity portion would be 63%. 

Millyonare

This may already have been mentioned, but be mindful of semi-hidden charges with Vanguard funds (and others), such as transaction fees. They can pump the headline annual charge of (say) 0.1% up to as much as 0.5% to 1.0%. Can be quite a shock to see your (expected) costs suddenly triple, or more, at the checkout.

dunstonh

This may already have been mentioned, but be mindful of semi-hidden charges with Vanguard funds (and others), such as transaction fees. 

They are not hidden.

They can pump the headline annual charge of (say) 0.1% up to as much as 0.5% to 1.0%. Can be quite a shock to see your (expected) costs suddenly triple, or more, at the checkout.

Typically around 0.04% for VLS. 

zagfles

grumiofoundation said:

zagfles said:

Albermarle said:

  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.

The main reason for this appears to be the HSBC funds are more US biased and the Vanguard ones more UK biased, and US equities have done better than UK.

Look at the geographical equity makeup of the HSBC funds in the facsheets, the equities portion is well over 50% US whereas Vanguard are around 30% US. Personally, I don't think over 50% US is very balanced even if it does reflect market cap.

Not sure where you got this data from?

VLS 100 

Vanguard U.S. Equity Index Fund GBP Acc	19.4%
Vanguard FTSE Developed World ex-U.K. Equity Index Fund GBP Acc*	19.3%
Vanguard FTSE U.K. All Share Index Unit Trust GBP Acc	19.2%
Vanguard S&P 500 UCITS ETF (USD) Accumulating	15.3%

*of which ~70% is US

so 19.4 + (19.3*0.7) + 15.3 = 48.1

VLS 60 contains the following

Vanguard FTSE Developed World ex-U.K. Equity Index Fund GBP Acc	19.3%
Vanguard U.S. Equity Index Fund GBP Acc	15.3%

(19.3*0.7) + 15.3 = 28.8 

Again 28.8 = 48% of 60



For HSBC adventurous (80% equity) factsheet is just over 50% US equity. So equity portion would be 63%. 

I just looked at HL's geographical breakdown here which says VLS100 is 31.12% US:

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/v/vanguard-lifestrategy-100-equity-income

IanManc

zagfles said:

grumiofoundation said:

zagfles said:

Albermarle said:

  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.

The main reason for this appears to be the HSBC funds are more US biased and the Vanguard ones more UK biased, and US equities have done better than UK.

Look at the geographical equity makeup of the HSBC funds in the facsheets, the equities portion is well over 50% US whereas Vanguard are around 30% US. Personally, I don't think over 50% US is very balanced even if it does reflect market cap.

Not sure where you got this data from?

VLS 100 

Vanguard U.S. Equity Index Fund GBP Acc	19.4%
Vanguard FTSE Developed World ex-U.K. Equity Index Fund GBP Acc*	19.3%
Vanguard FTSE U.K. All Share Index Unit Trust GBP Acc	19.2%
Vanguard S&P 500 UCITS ETF (USD) Accumulating	15.3%

*of which ~70% is US

so 19.4 + (19.3*0.7) + 15.3 = 48.1

VLS 60 contains the following

Vanguard FTSE Developed World ex-U.K. Equity Index Fund GBP Acc	19.3%
Vanguard U.S. Equity Index Fund GBP Acc	15.3%

(19.3*0.7) + 15.3 = 28.8 

Again 28.8 = 48% of 60



For HSBC adventurous (80% equity) factsheet is just over 50% US equity. So equity portion would be 63%. 

I just looked at HL's geographical breakdown here which says VLS100 is 31.12% US:

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/v/vanguard-lifestrategy-100-equity-income

The HL figure is incorrect. Grumio's figures are right.

VLS100 investments as at 30.6.22 included 19.3% in Vanguard US fund; 15.3% in Vanguard S&P 500 fund; and 19.3% in Vanguard Developed World ex UK fund, of which 69.5% was US investments, i.e. 13.4% of VLS100; giving a total proportion of VLS100 invested in US equities of 48.1%.

The HL page you refer to also says that 16.7% of VLS100 investments are in Ireland, which is laughable. Investments in Ireland are found in two VLS100 components. They are Vanguard Developed World ex UK at 0.1% of a 19.3% investment, and Vanguard developed Europe ex UK at 0.4% of a 7% investment; giving a total proportion of VLS100 invested in Ireland of 0.0473%, not the 16.7% suggested by HL

LifeStrategy® 100% Equity Fund - Accumulation (vanguardinvestor.co.uk)
FTSE Developed World ex-U.K. Equity Index Fund - Accumulation (vanguardinvestor.co.uk)
FTSE Developed Europe ex-U.K. Equity Index Fund - Accumulation (vanguardinvestor.co.uk)

zagfles

IanManc said:

zagfles said:

grumiofoundation said:

zagfles said:

Albermarle said:

  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.

The main reason for this appears to be the HSBC funds are more US biased and the Vanguard ones more UK biased, and US equities have done better than UK.

Look at the geographical equity makeup of the HSBC funds in the facsheets, the equities portion is well over 50% US whereas Vanguard are around 30% US. Personally, I don't think over 50% US is very balanced even if it does reflect market cap.

Not sure where you got this data from?

VLS 100 

Vanguard U.S. Equity Index Fund GBP Acc	19.4%
Vanguard FTSE Developed World ex-U.K. Equity Index Fund GBP Acc*	19.3%
Vanguard FTSE U.K. All Share Index Unit Trust GBP Acc	19.2%
Vanguard S&P 500 UCITS ETF (USD) Accumulating	15.3%

*of which ~70% is US

so 19.4 + (19.3*0.7) + 15.3 = 48.1

VLS 60 contains the following

Vanguard FTSE Developed World ex-U.K. Equity Index Fund GBP Acc	19.3%
Vanguard U.S. Equity Index Fund GBP Acc	15.3%

(19.3*0.7) + 15.3 = 28.8 

Again 28.8 = 48% of 60



For HSBC adventurous (80% equity) factsheet is just over 50% US equity. So equity portion would be 63%. 

I just looked at HL's geographical breakdown here which says VLS100 is 31.12% US:

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/v/vanguard-lifestrategy-100-equity-income

The HL figure is incorrect. Grumio's figures are right.

VLS100 investments as at 30.6.22 included 19.3% in Vanguard US fund; 15.3% in Vanguard S&P 500 fund; and 19.3% in Vanguard Developed World ex UK fund, of which 69.5% was US investments, i.e. 13.4% of VLS100; giving a total proportion of VLS100 invested in US equities of 48.1%.

The HL page you refer to also says that 16.7% of VLS100 investments are in Ireland, which is laughable. Investments in Ireland are found in two VLS100 components. They are Vanguard Developed World ex UK at 0.1% of a 19.3% investment, and Vanguard developed Europe ex UK at 0.4% of a 7% investment; giving a total proportion of VLS100 invested in Ireland of 0.0473%, not the 16.7% suggested by HL

LifeStrategy® 100% Equity Fund - Accumulation (vanguardinvestor.co.uk)
FTSE Developed World ex-U.K. Equity Index Fund - Accumulation (vanguardinvestor.co.uk)
FTSE Developed Europe ex-U.K. Equity Index Fund - Accumulation (vanguardinvestor.co.uk)

Well whatever the exact amounts are, my point was that VLS100 is significantly less US, even on your figures (48% vs 63%), and significantly more UK than HSBC, and that's almost certainly the reason for its underperformance. Plus as mentioned above the strengthening of the USD.