VLS 20 as a proxy bond fund?

NithyaH

leosayer said:

NithyaH said:

MallyGirl said:

Vanguard do have pure bond funds too

Yes, but not one that I think is a good single bond fund to hold over the long term….

What are you looking for from a bond fund that Vanguard doesn't provide?

I’m sure Vanguard provides the right mix of funds, but I don’t have the expertise to create a portfolio from them and there doesn’t appear to a single all-flavours bond fund that can be used.

Hence looking for the closest option which seems to be VLS 20.  Adding it at 25% to something like HSBC FTSE All world or Vanguard FTSE Global All Cap at 75% appears to create a straightforward 80/20 portfolio mix.

engagedandopen

Why are you sure Vanguard provides the right mix of funds, NithyaH?  The main approach they sell with VLS is 'set it and forget it', which (it seems to me), although cheap, is not the best way to invest in fixed interest.  The go-to bond fund is probably short-dated UK gilts, but not good during inflation or when better yields can be found elsewhere.

NithyaH

engagedandopen said:

Why are you sure Vanguard provides the right mix of funds, NithyaH?  The main approach they sell with VLS is 'set it and forget it', which (it seems to me), although cheap, is not the best way to invest in fixed interest.  The go-to bond fund is probably short-dated UK gilts, but not good during inflation or when better yields can be found elsewhere.

I don’t have the expertise to monitor and adjust bond holdings I’m afraid.  That’s why I would like a single fund that - while not perfect - could be broadly OK across varying market conditions.

leosayer

NithyaH said:

leosayer said:

NithyaH said:

MallyGirl said:

Vanguard do have pure bond funds too

Yes, but not one that I think is a good single bond fund to hold over the long term….

What are you looking for from a bond fund that Vanguard doesn't provide?

I’m sure Vanguard provides the right mix of funds, but I don’t have the expertise to create a portfolio from them and there doesn’t appear to a single all-flavours bond fund that can be used.

Hence looking for the closest option which seems to be VLS 20.  Adding it at 25% to something like HSBC FTSE All world or Vanguard FTSE Global All Cap at 75% appears to create a straightforward 80/20 portfolio mix.

What about Vanguard global bond index fund or the short-term version of that? Isn't that meant to be a one fund solution for bond exposure? 

Personally, I just use the iShares UK Gilt 0-5 yr fund for fixed income exposure.

Hoenir

NithyaH said:

engagedandopen said:

Why are you sure Vanguard provides the right mix of funds, NithyaH?  The main approach they sell with VLS is 'set it and forget it', which (it seems to me), although cheap, is not the best way to invest in fixed interest.  The go-to bond fund is probably short-dated UK gilts, but not good during inflation or when better yields can be found elsewhere.

I don’t have the expertise to monitor and adjust bond holdings I’m afraid.  That’s why I would like a single fund that - while not perfect - could be broadly OK across varying market conditions.

In which case something like Vanguard VLS80 fits the bill. While investment professionals do not get every call right. They've an advantage over the average DIY investor. Due to the resources at their disposal. Bond markets are extremely complex. Even more so than equities. 

NithyaH

leosayer said:

NithyaH said:

leosayer said:

NithyaH said:

MallyGirl said:

Vanguard do have pure bond funds too

Yes, but not one that I think is a good single bond fund to hold over the long term….

What are you looking for from a bond fund that Vanguard doesn't provide?

I’m sure Vanguard provides the right mix of funds, but I don’t have the expertise to create a portfolio from them and there doesn’t appear to a single all-flavours bond fund that can be used.

Hence looking for the closest option which seems to be VLS 20.  Adding it at 25% to something like HSBC FTSE All world or Vanguard FTSE Global All Cap at 75% appears to create a straightforward 80/20 portfolio mix.

What about Vanguard global bond index fund or the short-term version of that? Isn't that meant to be a one fund solution for bond exposure? 

Personally, I just use the iShares UK Gilt 0-5 yr fund for fixed income exposure.

Vanguard does not itself use that fund alone for fixed income exposure in its multi asset funds 

dunstonh

Vanguard does not itself use that fund alone for fixed income exposure in its multi asset funds 

Vanguard is a fettered fund of funds.    It would need to be an unfettered fund of funds to use that fund.

Additionally, Vanguard would not make such an extreme decision to use short-term UK gilts only as its fixed-interest allocation.

NithyaH

dunstonh said:

Vanguard does not itself use that fund alone for fixed income exposure in its multi asset funds 

Vanguard is a fettered fund of funds.    It would need to be an unfettered fund of funds to use that fund.

Additionally, Vanguard would not make such an extreme decision to use short-term UK gilts only as its fixed-interest allocation.

Yes - I was referring to the Vanguard Global Bond Index fund.  Sorry if unclear.