Alternatives to the Vanguard platform and Life Startegy 100 fund

dllive

Thanks guys. I was trawling through Monevator this morning and found these two articles that are pertinent:
https://monevator.com/assume-every-investment-can-fail-you/
https://monevator.com/investor-compensation-scheme/

Nebulous2

I started with a lump sum two years ago - agonised about 'putting it all on black' and the weighting towards the states. It is one thing reading and understanding some of the theory behind investing, but the emotional investment in a lump sum which will be well-nigh impossible to replace at this point in my life was strong.

We refer to attitude to risk here, but that phrase doesn't really cover the nuances of the situation for me. I am by nature a risk-taker. At times in my early life I've driven far too fast. I love descending fast on a bike. My management style at work is relaxed, collaborative and one which delegates a lot, but I come to life during a crisis and enjoy making the big calls. I've actively avoided gambling, as I am concerned I could become too attracted to it. You could say I'm an adrenaline junkie.  

 Despite all that I felt a huge weight of responsibility for that money and picked some actively managed funds - Europe, Japan, FTSE 250 etc to move away from the 60% weighting in the US of A.

The trackers have outperformed my own choices, with one I picked losing over 50% at one time, now 42% down. It takes a particular skill to pick the worst performing fund in a sector of 250+ funds. 

I was advised against what I did here, but I guess I need to make my own mistakes, rather than learn from other people's. 

I found this article useful:- Best global tracker funds – how to choose - Monevator

We have money in the HSBC tracker and the Fidelity one referred to there, but all new money now is going into VWRP - the Vanguard FTSE - accumulation ETF. 

dunstonh

22225 said:

Hi sorry to jump on this post... due to my relative giving me a small amount of money each month for my kids, I set up a junior sipp via fidelity for my kids. I put it in vanguard VLS 100 as I thought well it has a long time to grow. Looking at the criticisms of VLS 100 should I change it to a different product? I know people cant give advice but I'm looking for a cheap diversified product that I can just add to regularly and forget about. Given the timescale I thought 100% equities in a fund of funds like vanguard. I've heard good things about HSBC Global strategy adventurous.  Would that be an appropriate alternative? Basically the criticism of VLS 100 is making me concerned. I just want to pay in a little bit each month and forget about it. Please can I have ur thoughts. Thanks.

You dont have to change your product as there is nothing wrong with that.  However, you can improve on the investment fund you use in the "product".

You could do a lot worse than VLS100 but you can do better.  Its not a "concerned" level of difference.    Its more "optimising" what is best.    If you prefer passive solutions, then a global tracker would be half the cost of VLS100.  A global tracker is good for those who accept high risk and are looking to fire and forget.

GeoffTF

dunstonh said:
If you prefer passive solutions, then a global tracker would be half the cost of VLS100. 

Not with Vanguard:

https://www.vanguardinvestor.co.uk/investments/vanguard-lifestrategy-100-equity-fund-accumulation-shares/overview
https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-all-world-ucits-etf-usd-distributing/overview
https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-acc/overview

LifeStrategy 100 0.22%
VWRL 0.22%
Vanguard Global All Cap 0.23%

These funds are all very popular, so Vanguard charges a premium price for them. As I have said, we can save money by using a developed world tracker and adding an emerging markets tracker, and a UK tracker if we want a home bias. (If you prefer funds rather than ETFs you can use Vanguard Developed World ex UK. VFEM is a better partner for this fund than the emerging markets OEIC, which will duplicate South Korea.)

You do not have to use Vanguard. Nonetheless, fund managers have a long and inglorious history of hiding costs and finding other under the radar ways of siphoning off money from your investments. Vanguard is not for profit and has always been clean. HSBC increased the charges of some of its funds last year. You would not have known if you had not regularly inspected the KIID. If your fund holding was not tax sheltered, you could have found yourself trapped in an expensive fund. Be careful who you trust.

masonic

The Vanguard platform is best suited for those with smaller amounts to invest, and for smaller portfolios the price of being able to conveniently buy a single fund solution is negligible. As a portfolio grows in size, the incentive to switch to a different provider and different holdings becomes more compelling. Paying 0.15% of a large portfolio every year as a platform fee itself looks unattractive by the time you have reached a 6 figure investment, and even before that, shaving 0.1% off your fund fees starts to look attractive. So it is just good moneysaving to evolve the strategy over time to use the best tools to fit your circumstances. With the likes of Trading212, InvestEngine etc, it's possible to start with an ETF portfolio in a cost efficient manner from the outset, but when it is just a matter of a few quid and a shorter learning curve, the likes of Vanguard still looks to be a sound suggestion for a newbie to start their investment journey.

In a way I take some relief from the fact we seem to have moved on to discussions of shaving small percentages off fund fees. It's progress compared to the era when dunstonh was explaining to people how to make a DIY Guaranteed Equity Bond using a cash and S&S ISA.

NoMore

masonic said:

The Vanguard platform is best suited for those with smaller amounts to invest, and for smaller portfolios the price of being able to conveniently buy a single fund solution is negligible. As a portfolio grows in size, the incentive to switch to a different provider and different holdings becomes more compelling. Paying 0.15% of a large portfolio every year as a platform fee itself looks unattractive by the time you have reached a 6 figure investment, and even before that, shaving 0.1% off your fund fees starts to look attractive. So it is just good moneysaving to evolve the strategy over time to use the best tools to fit your circumstances. With the likes of Trading212, InvestEngine etc, it's possible to start with an ETF portfolio in a cost efficient manner from the outset, but when it is just a matter of a few quid and a shorter learning curve, the likes of Vanguard still looks to be a sound suggestion for a newbie to start their investment journey.

In a way I take some relief from the fact we seem to have moved on to discussions of shaving small percentages off fund fees. It's progress compared to the era when dunstonh was explaining to people how to make a DIY Guaranteed Equity Bond using a cash and S&S ISA.

Vanguard fees are capped at £375 per year for accounts over £250,000. Not dismissing your argument, they probably are still expensive at that pot size but just pointing out at some point they stop charging a %based fee and switch to fixed fee.

masonic

NoMore said:

masonic said:

The Vanguard platform is best suited for those with smaller amounts to invest, and for smaller portfolios the price of being able to conveniently buy a single fund solution is negligible. As a portfolio grows in size, the incentive to switch to a different provider and different holdings becomes more compelling. Paying 0.15% of a large portfolio every year as a platform fee itself looks unattractive by the time you have reached a 6 figure investment, and even before that, shaving 0.1% off your fund fees starts to look attractive. So it is just good moneysaving to evolve the strategy over time to use the best tools to fit your circumstances. With the likes of Trading212, InvestEngine etc, it's possible to start with an ETF portfolio in a cost efficient manner from the outset, but when it is just a matter of a few quid and a shorter learning curve, the likes of Vanguard still looks to be a sound suggestion for a newbie to start their investment journey.

In a way I take some relief from the fact we seem to have moved on to discussions of shaving small percentages off fund fees. It's progress compared to the era when dunstonh was explaining to people how to make a DIY Guaranteed Equity Bond using a cash and S&S ISA.

Vanguard fees are capped at £375 per year for accounts over £250,000. Not dismissing your argument, they probably are still expensive at that pot size but just pointing out at some point they stop charging a %based fee and switch to fixed fee.

Yes, I'd consider £375 per year to be quite extortionate. You can get free regular investing and 12 sells a year for a third of the price at Interactive Investor, which I wouldn't class as cheap, but offers some additional services that can make them worth the expense. You'd need to clock up 75 trades at iWeb to pay that sort of money. Even the likes of Hargreaves Lansdown can be used for exchange traded investments for a fraction of that cost if trading infrequently. I'd generally suggest people start looking around for better alternatives from the point the fees tip over the £100 mark if they haven't done so before.

Rt90

I hold VLS100 in my sipp as does my wife so I’ve read this thread with great interest. Some really good points have been made with some food for thought so thank you to the contributors.
 I read and read on the subject while deciding on what fund to choose and soon realised I wanted a simple, inexpensive, globally diversified fund. VLS100 seemed to fit the bill with the majority of the holdings in passive funds.
No idea if the heavier U.K. weighting will be good, bad or indifferent!
I’m sure it’s not the best option but I don’t think it’s anywhere near the worst. 
I’m always open to changing but it is a potential minefield and I’ve got it simple at the moment.
 I just concentrate on putting as much in as possible and hopefully there will be a decent pot at the end of it.
Just an anecdote and no investment advice here but at the moment I’m quite happy to keep it nice and simple.

22225

Ok thanks this is all reassuring. Thank you and sorry for jumping on the thread. Thanks for all the guidance. People commenting on these forums are really educating people.

GeoffTF

£375 is rather high. It is not so bad if you have a SIPP and an ISA with Vanguard. Nonetheless, they have a much smaller average account size than Interactive Investor. We do not know about Lloyds/Bank of Scotland/Halifax/iWeb because Lloyds does not publish any numbers. I expect that Vanguard will eventually reduce the cap. They might not lose much revenue if they had separate smaller caps for each type of account, and I expect that they would gain in the long run.