Vanguard LifeStrategy 60%

Skinnydad

I've been reading lately that a lot of people have pulled their money out of this fund. Can anyone confirm if this is true, as my SIPP is in this fund and TBH I've not been happy with its rate of return. Would it be wise to transfer into another fund?

Is there any (kind of Safe) funds out there that return 5% PA or is this too much to ask? 

Thanks in advance..

El_Torro

Where have you heard that people are pulling out of this fund? It’s not something I’ve heard.

There are other similar funds, like Fidelity Multi Asset Allocator or HSBC Global Strategy, though they will perform in a similar way to VLS, assuming you keep the bond ratio the same. VLS is very overweight in the UK, most other multi asset funds are not.

If you’re looking for a fund that will consistently deliver 5% growth every year then you’re out of luck I’m afraid. You could find a money market fund that is currently delivering about 5%, though as interest rates fall the return of such funds will also fall. 

If you want your fund to grow faster over the years then one option would be to invest in more equities and less bonds. Bear in mind that this increases the volatility, when stock markets drop your fund(s) will feel it.

Skinnydad

Thanks El_Torro appreciated. I think I read it in a Motely fool article..

bjorn_toby_wilde

El_Torro said:

Where have you heard that people are pulling out of this fund? It’s not something I’ve heard.

Monevator also quoted the same from a Trustnet report on 2nd Feb.  

https://monevator.com/weekend-reading-vanguards-bond-investors-losing-their-religion/

Leaving right now might not be a good idea though, when the outlook for bonds may be improving.

dunstonh

I've been reading lately that a lot of people have pulled their money out of this fund

It hit a new high AUM on Friday.  So, no.



However, it hasn't had the inflows it once had.  HSBC is continuing its march but is still some way behind

Hoenir

Skinnydad said:

TBH I've not been happy with its rate of return. 

How comfortable would you feel if the value of your portfolio fell 10% - 15% ? 

MEM62

Skinnydad said:

TBH I've not been happy with its rate of return. 

You are only 60% in equities so it is not exactly the most adventurous portfolio. 

Skinnydad said:

Would it be wise to transfer into another fund?

That answer will depend on what you want to achieve and what level of risk you want to take.  Do you have a fund in mind?  

Skinnydad said:

Is there any (kind of Safe) funds out there that return 5% PA or is this too much to ask? 

You have to define 'safe', which is normally done by looking at you attitude to, and tolerance for, risk.  You have picked a fairly conservative option in VLS60 and ask about 'kind of safe' funds so perhaps your appetite for risk will not lead you to the best returns.  That said, at the moment cash will give you the kind of return you are looking for without the risk associated with equities but who knows how long that will last.        
 

nicknameless

Couple of comments about cash / money market funds providing same potential return atm.  Has inflation disappeared then?

Skinnydad

Thanks Everyone I really appreciate your responses. I think I'm on the home run re pensions etc. I get my Gov pension this year and I'm hoping to supplement this with a return from my VLS60. As Dunstonh kindly put it it's on a high at present. However the highest it's been for me was Nov 21 thereafter a gradual slide.  I was sitting at 267K then. March 23 sitting a 237K so really done nowt between 21 and 23. Yes it's picked up but seems to be a fund that doesn't hold it own so to speak. For me this fund has not performed since Dec 19 when I had the same money in it as I do today. Re Hoenir I've seen this fund drop over 15% before. My thoughts are as I'm coming up to retirement I'll take the 25% TFLS and see where I go with the rest. It's a pity i didn't have the knowledge to be able to lever 5% out of this fund as this would be roughly 12/13k a year. I could extract this and still remain with the same capital as I have some other irons in the fire. Any advice appreciated. what's the best way to generate an income with this amount of capital. I don't really fancy an annuity as i don't want to give the pension fund my cash if I pop my clogs way too early. 

Skinnydad

Thanks for the article Bjorn. I liked the section:

You may remember Vanguard itself gave us a forecast just before Christmas?

The fund titan said:

We expect UK bonds to deliver annualised returns of around 4.4%-5.4% over the next decade […]

That’s a huge difference compared to when quantitative tightening started in early 2022.

Indeed Vanguard was looking for just 0.8%-1.8% 10-year annualised returns as recently as the end of 2021, just before the rate-hiking cycle began

Skinnydad

Thanks Nicknameless. I was thinking cash I'm just not sure what cash provides. I mean If I transfer my assets into cash.  do they just sit with the pension company?  Do I pay the company any money for holding my cash, similar to the Admin & Vanguard charges? Do I get any interest from them? and if so is this a good option?  opps and meant to say I haven't a clue on how to turn my SIPP into cash.  i.e. the process of moving from platform to cash and back again...