Vanguard Lifestrategy Bond Duration

dunstonh

JohnWinder said:

GeoffTF said:

I do not think the duration (of VLS) is particularly long..

About 7 years, I expect.

The HSBC global strategy balanced fund has an effective bond duration of about 7 (I think, it’s a bit confusing, again). 

VLS hasn't been the multi-asset fund of choice for a good number of years now. 

The VLS60 seems to be four times as big as the HSBC global strategy balanced fund, 12B vs 3B. They’ve both been going about 11 years.

As Albernarle says, HSBC don't market their GS range in the UK.   Vanguard is heavily marketed.  Often indirectly through affiliates via youtube or websites.    Vanguard has a very devout following.  Two financial brands in the UK seem to generate that level of following.  Vanguard and SJP.    Some people/sites will go with (or promote) a Vanguard option and won't even consider alternatives.  Or even rubbish the alternatives.   Until recently, another high profile site spent over a decade being pro Vanguard and negative to HSBC GS despite HSBC GS being cheaper and having better returns.  (Returns difference mainly due to HSBC having no home bias and weighted with more US).   Inexperienced DIY investors will often go to sites like that or youtube and go with the fashion.

The best doesn't always win.  And no single fund house has the best options across the board.

However, at the end of the day, if someone selects VLS or the equivalent HSBC GS, the differences are not going to be significant and either option will have discrete periods where one is better than the other.

JohnWinder

 Until recently, another high profile site spent over a decade being pro Vanguard and negative to HSBC GS 

Which website? I’d like to avoid it.

Prism

Linton said:

hewhohuntselves said:

dunstonh said:

What are people's thoughts on this.  Has it caused anyone to question their continuing investments into VLS?

VLS hasn't been the multi-asset fund of choice for a good number of years now.    However, it still does exactly the same as it what it did when it launched.  So, nothing has changed.  

What would you identify as the alternative?

The alternative depends on why you want to hold bonds at all. For some objectives VLS is fine though one could reasonably argue that HSBC Global Strategy is better. However the practical difference will probably be marginal.

All such funds have the basic drawback that unmanaged funds of bonds substantially reduce the main advantage of holding bonds at all, that being the guaranteed repayment at maturity. So we come back to the question of objectives.

It has become popular to look at bond funds for their lack of correlation with equities rather than the income and capital return at maturity. The various guidance around SWR looks to use them during recession to help reduce the drop. Few seem concerned with if that actually works or the specifics of individual bonds.

badger09

JohnWinder said:

 Until recently, another high profile site spent over a decade being pro Vanguard and negative to HSBC GS 

Which website? I’d like to avoid it.

Monevator?

interesting comment from @dunstonh comparing the ‘devout’ following of Vanguard & SJP