Vanguard ISA transfer to Target Retirement Fund

AsifM068

Hi,

Would it be possible to transfer an existing Vanguard ISA (FTSE Global All Cap) to one of Vanguard's TRFs under an ISA umbrella?

badger09

AsifM068 said:

Hi,

Would it be possible to transfer an existing Vanguard ISA (FTSE Global All Cap) to one of Vanguard's TRFs under an ISA umbrella?

The ISA is just the tax wrapper, so no transfer is necessary. Sell Vanguard FTSE Global All Cap & buy whichever Vanguard TRF you want. 

What’s the attraction of their TRFs?

AsifM068

badger09 said:

AsifM068 said:

Hi,

Would it be possible to transfer an existing Vanguard ISA (FTSE Global All Cap) to one of Vanguard's TRFs under an ISA umbrella?

The ISA is just the tax wrapper, so no transfer is necessary. Sell Vanguard FTSE Global All Cap & buy whichever Vanguard TRF you want. 

What’s the attraction of their TRFs?

Thank you so much for the clarification. I'm about 5 years away from retirement so I am just scoping out my options to lower my risk profile through a higher exposure to bonds; is this strategy flawed?

badger09

Not necessarily flawed, but not the only option. Some pros & cons here, and I’m sure there are other articles online

https://monevator.com/vanguard-target-retirement-funds/

Hopefully one of our regular IFA posters such as @dunstonh will be along with an opinion. 

Alexland

AsifM068 said:

Thank you so much for the clarification. I'm about 5 years away from retirement so I am just scoping out my options to lower my risk profile through a higher exposure to bonds; is this strategy flawed?

It really depends on your strategy for drawing retirement income - the asset allocation suitable for holding now depends on what you will do next.

For example are you looking to de-risk and performance link to bond yields in anticipation of buying an annuity or will you be doing drawdown from an investment pot which would require you to carry a fair amount of investment risk during your retirement to generate enough likely performance for inflation protection?

Also if this is for retirement have you considered if a pension might be better than an ISA? Again it depends on how you will use it for example if you want access to lump sums at short notice then maybe a cash ISA would be better but if you just want a trickle of income a pension may be better.

Beddie

Another option is one of the LifeStrategy funds, which have a fixed bond amount. 

AsifM068

Thank you all for the pointers; stay tuned for more crazy ideas on the investment front!

AsifM068

Vanguard has advised me that I will have to sell and buy the TRF (as advised - thank you Badger) via the 'switch option' and my ISA wrapper is not affected.

Thanks again folks.