Vanguard S&S ISA poor performance

Chloe_G

I've got a Vanguard S&S ISA which  is showing an approximate 8% loss since 2020.  (However, in the past year it is only showing a 0.69% loss.)  It is comprised of LifeStrategy 20% Equity and LifeStrategy 40% Equity Fund.  After doing some reading I believe it is doing badly as it is weighted towards bonds.  I also have a HL S&S ISA which is showing a 10% gain.  I've always said I would not sell at a loss but is there any point in hanging in? I'm thinking of transferring it to HL or possibly transferring it to a Vanguard Managed ISA.  Thanks for any opinions.

Qyburn

What investments do you have in HL?

jimjames

An ISA does not have poor performance (or good performance for that matter). An ISA is just a wrapper and it's whatever investments you have inside that matters so it makes no sense to say an HL ISA is performing better than a Vanguard ISA when you've given no details of what you have bought inside them and the timescales involved.

Beddie

They are two lower risk funds, that are never going to show high levels of growth. As you said, the bond element has been the issue, as they fell when interest rates shot up last year. But moving forward, the damage is done and they will probably be a lower risk option moving forward.

You probably have a higher risk fund choice in HL, tell us what they are and how long you have been invested. Working out what risk level to take can be difficult, you have to weigh up your age, investment term and how you feel about losses.

masonic

The performance is primarily down to the asset allocation, as you have said, so moving to "managed" within the same risk level will not change much. If you believe you underestimated your risk tolerance, then you could increase it, but you'd need to accept the risk of a greater short term loss than 8% over 3 years.

dunstonh

 After doing some reading I believe it is doing badly as it is weighted towards bonds. 

Did you not do that reading before you invested in the fund?
i.e. when you effectively choose between equities and bonds with VLS, what did you think the other 80% of the VLS 20 was invested in?

 I also have a HL S&S ISA which is showing a 10% gain. 

In the exact same period?
What is the asset makeup of that fund?  i.e. if you are comparing a 100% equity fund with a 20% equity fund then clearly they are not even close to being similar.

Chloe_G

masonic said:

The performance is primarily down to the asset allocation, as you have said, so moving to "managed" within the same risk level will not change much. If you believe you underestimated your risk tolerance, then you could increase it, but you'd need to accept the risk of a greater short term loss than 8% over 3 years.

Thanks, that's what I really wanted to know ie. that it wouldn't make much difference.

dunstonh said:

 After doing some reading I believe it is doing badly as it is weighted towards bonds. 

Did you not do that reading before you invested in the fund?
i.e. when you effectively choose between equities and bonds with VLS, what did you think the other 80% of the VLS 20 was invested in?

Yes, I did and at the time I opened the investment, as I understand it, bonds were less risky as interest rates were so low, but I've read now that they don't do so well when interest rates are higher.  Thank you.

Steve_666_

Chloe_G said:

I've got a Vanguard S&S ISA which  is showing an approximate 8% loss since 2020.  (However, in the past year it is only showing a 0.69% loss.)  It is comprised of LifeStrategy 20% Equity and LifeStrategy 40% Equity Fund.  After doing some reading I believe it is doing badly as it is weighted towards bonds.  I also have a HL S&S ISA which is showing a 10% gain.  I've always said I would not sell at a loss but is there any point in hanging in? I'm thinking of transferring it to HL or possibly transferring it to a Vanguard Managed ISA.  Thanks for any opinions.

If you have an insight into how the market will perform in the future, please share. You haven't said what your HL ISA is invested in, the lifestrategy funds you have are weighted towards bonds, bonds have had a bad time of it recently. The future is unknown, acts like Russia illegal invasion, Truss, covid, or similar can happen again or inflation could fall and bonds valued higher.

Qyburn

dunstonh said:

Did you not do that reading before you invested in the fund?
i.e. when you effectively choose between equities and bonds with VLS, what did you think the other 80% of the VLS 20 was invested in?

Just out of interest what did people who knew what they were doing advise or do for themselves in 2022 to avoid or lessen this issue? Move from bonds into cash (as Royal London did in my pension), or move to different types of bonds?

masonic

Qyburn said:

dunstonh said:

Did you not do that reading before you invested in the fund?
i.e. when you effectively choose between equities and bonds with VLS, what did you think the other 80% of the VLS 20 was invested in?

Just out of interest what did people who knew what they were doing advise or do for themselves in 2022 to avoid or lessen this issue? Move from bonds into cash (as Royal London did in my pension), or move to different types of bonds?

"People", as evidenced from discussions here a few years ago, moved out of bonds and into cash. Active fund managers in the wealth preservation space tended to move to very short dated bonds and/or short dated index linked bonds.

badger09

@Chloe_G

How did you go about choosing those 2 funds in the Vanguard LifeStrategy range?
What, exactly, do you hold in your HL S&S ISA. And how did you go about choosing it/them?.

FWIW, I only really started investing 10 years ago after I retired. I never totally understood Bonds, except that they were supposed to behave differently to equities, so if one fell, the other rose. But as that didn't always happen, I gave up on Bonds and instead hold cash to balance my 100% equity investments. I understand cash and am well aware of the damage which can be done by inflation, but I'm happy with my decisions.