HSBC/Vanguard replacement for Prufund Risk Managed 4 Fund Series E

Linton

Over the past 6 or so years available on Trustnet the OPs Prufund has actually out-performed VLS60, which I think is the nearest equivalent in underlying assets, thanks to its smoothing.  In particular the recent large fall in bond prices seems to have had very  little effect. In the COVID crash VLS60 fell about 20% whilst the Prufund fell about 12%

But what does this matter when VLS60 has lower charges? Charges are everything aren't they?

ISTM that unless the OPs parents were well prepared there could be family ructions shoutd the OP be able to persuade them to change.  Mixing families and finance can be a seriously bad idea.  What is the OP doing interfering in their parents finances, best  in my view to keep well clear unless there is evidence of scams.

JohnWinder

It seems the Pru fund is a complex beast, perhaps with ‘with profits’ properties, making it not comparable to ‘our usual’ ‘all at risk’ mixed funds.

‘But what does this (higher risk adjusted returns over 6 years) matter when VLS60 has lower charges? Charges are everything aren't they?’

Yes I agree they are. The idea doesn’t sit comfortably with some people; I feel uneasy about it myself at times. But those folk would do us all a service by marshalling the best arguments against the idea so we can all improve out thinking on the matter. If ‘past returns point to future returns’ is part of it, then let’s have it written.  I tried up thread to put one side of the argument. Here’a link to the ‘costs matter hypothesis’ from which I shamelessly copied. https://johncbogle.com/speeches/JCB_Brinson0404.pdf.

Linton

JohnWinder said:

It seems the Pru fund is a complex beast, perhaps with ‘with profits’ properties, making it not comparable to ‘our usual’ ‘all at risk’ mixed funds.

‘But what does this (higher risk adjusted returns over 6 years) matter when VLS60 has lower charges? Charges are everything aren't they?’

Yes I agree they are. The idea doesn’t sit comfortably with some people; I feel uneasy about it myself at times. But those folk would do us all a service by marshalling the best arguments against the idea so we can all improve out thinking on the matter. If ‘past returns point to future returns’ is part of it, then let’s have it written.  I tried up thread to put one side of the argument. Here’a link to the ‘costs matter hypothesis’ from which I shamelessly copied. https://johncbogle.com/speeches/JCB_Brinson0404.pdf.

In my view choice should primarily be based on the appropriateness of the investment for meeting the requirements. In the case of the OPs parents return smoothing may be worth paying for. Look at the level of worry shown on these forums over the recent falls in bond prices or quite small equity crashes.