Pension (SIPP), ISAs and Retirement

masonic

DRS1 said:

If you're wedded to Vanguard why not just use the bond funds they use in VLS60?

There's a bit of a mix in VLS, with the pure bond version not being available (unlike the pure equities version). However, VLS20 is potentially better than a 100% bond fund as the small allocation to equities can actually reduce volatility.

DRS1

masonic said:

DRS1 said:

If you're wedded to Vanguard why not just use the bond funds they use in VLS60?

There's a bit of a mix in VLS, with the pure bond version not being available (unlike the pure equities version). However, VLS20 is potentially better than a 100% bond fund as the small allocation to equities can actually reduce volatility.

But the OP is already proposing to stick 60% into VLS100 (or a global equity tracker).  He is looking to put the other 40% into bonds.

Are you saying the bond funds used in VLS60 are not available for investment as standalone funds?  Yes you'd need a mix as there is more than one but I thought the individual funds were available.

masonic

DRS1 said:

masonic said:

DRS1 said:

If you're wedded to Vanguard why not just use the bond funds they use in VLS60?

There's a bit of a mix in VLS, with the pure bond version not being available (unlike the pure equities version). However, VLS20 is potentially better than a 100% bond fund as the small allocation to equities can actually reduce volatility.

But the OP is already proposing to stick 60% into VLS100 (or a global equity tracker).  He is looking to put the other 40% into bonds.

Are you saying the bond funds used in VLS60 are not available for investment as standalone funds?  Yes you'd need a mix as there is more than one but I thought the individual funds were available.

Here are the bond funds used in VLS60. I don't know if all these are available on the DIY platform, but I wouldn't want this level of complexity, nor would I want the headache of figuring out how to simplify.

• Global Bond Index Fund GBP Hedged Acc
• U.K. Government Bond Index Fund GBP Acc
• U.K. Investment Grade Bond Index Fund GBP Acc
• Global Aggregate Bond UCITS ETF GBP Hedged Accumulating
• U.K. Inflation-Linked Gilt Index Fund GBP Acc
• U.S. Government Bond Index Fund GBP Hedged Acc
• U.S. Investment Grade Credit Index Fund GBP Hedged Acc
• Euro Government Bond Index Fund GBP Hedged Acc
• Euro Investment Grade Bond Index Fund GBP Hedged Acc
• Japan Government Bond Index Fund GBP Hedged Acc

If OP wants to end up with 60% equities, he could invest 50% in VLS100 and 50% in VLS20. The benefit of this approach is that the "bonds" bucket will have lower volatility and a better risk-adjusted return than a 100% bonds fund.

Aylesbury_Duck

masonic said:

DRS1 said:

masonic said:

DRS1 said:

If you're wedded to Vanguard why not just use the bond funds they use in VLS60?

There's a bit of a mix in VLS, with the pure bond version not being available (unlike the pure equities version). However, VLS20 is potentially better than a 100% bond fund as the small allocation to equities can actually reduce volatility.

But the OP is already proposing to stick 60% into VLS100 (or a global equity tracker).  He is looking to put the other 40% into bonds.

Are you saying the bond funds used in VLS60 are not available for investment as standalone funds?  Yes you'd need a mix as there is more than one but I thought the individual funds were available.

Here are the bond funds used in VLS60. I don't know if all these are available on the DIY platform, but I wouldn't want this level of complexity, nor would I want the headache of figuring out how to simplify.

• Global Bond Index Fund GBP Hedged Acc
• U.K. Government Bond Index Fund GBP Acc
• U.K. Investment Grade Bond Index Fund GBP Acc
• Global Aggregate Bond UCITS ETF GBP Hedged Accumulating
• U.K. Inflation-Linked Gilt Index Fund GBP Acc
• U.S. Government Bond Index Fund GBP Hedged Acc
• U.S. Investment Grade Credit Index Fund GBP Hedged Acc
• Euro Government Bond Index Fund GBP Hedged Acc
• Euro Investment Grade Bond Index Fund GBP Hedged Acc
• Japan Government Bond Index Fund GBP Hedged Acc

If OP wants to end up with 60% equities, he could invest 50% in VLS100 and 50% in VLS20. The benefit of this approach is that the "bonds" bucket will have lower volatility and a better risk-adjusted return than a 100% bonds fund.

I was about to suggest the same thing, lowering the amount in the VLS100 to compensate for the 20% equities in the VLS20 bucket.

Thanks for taking the trouble to list the funds.  As you say, for some, including me, I don't want the headache of managing all that, so the bucket approach of all-equities and the VLS20 seems like a good way to structure my investments as I near the time when I will begin to draw on them.

DRS1

masonic said:

DRS1 said:

masonic said:

DRS1 said:

If you're wedded to Vanguard why not just use the bond funds they use in VLS60?

There's a bit of a mix in VLS, with the pure bond version not being available (unlike the pure equities version). However, VLS20 is potentially better than a 100% bond fund as the small allocation to equities can actually reduce volatility.

But the OP is already proposing to stick 60% into VLS100 (or a global equity tracker).  He is looking to put the other 40% into bonds.

Are you saying the bond funds used in VLS60 are not available for investment as standalone funds?  Yes you'd need a mix as there is more than one but I thought the individual funds were available.

Here are the bond funds used in VLS60. I don't know if all these are available on the DIY platform, but I wouldn't want this level of complexity, nor would I want the headache of figuring out how to simplify.

• Global Bond Index Fund GBP Hedged Acc
• U.K. Government Bond Index Fund GBP Acc
• U.K. Investment Grade Bond Index Fund GBP Acc
• Global Aggregate Bond UCITS ETF GBP Hedged Accumulating
• U.K. Inflation-Linked Gilt Index Fund GBP Acc
• U.S. Government Bond Index Fund GBP Hedged Acc
• U.S. Investment Grade Credit Index Fund GBP Hedged Acc
• Euro Government Bond Index Fund GBP Hedged Acc
• Euro Investment Grade Bond Index Fund GBP Hedged Acc
• Japan Government Bond Index Fund GBP Hedged Acc

If OP wants to end up with 60% equities, he could invest 50% in VLS100 and 50% in VLS20. The benefit of this approach is that the "bonds" bucket will have lower volatility and a better risk-adjusted return than a 100% bonds fund.

Well  the bottom 5 don't appear in the top 10 holdings so they represent less than 1.77% each.  Safe to ignore?
Of the rest  the Global Aggregate Bond one seems to lead to a Sorry not available page at HL.
The other 4 seem to have an invest now button so could be used
Anyway it is not my portfolio and the OP may well appreciate the simplicity of following your suggestion.

the_medium_bear

Oh that is an interesting proposition so having 2 LS fund and the bond version used when equities are having a band time. I'm all for a relatively simple life (I know that comes at a cost of course)

Still spend way to long trying to get my head around index linked gilts and building ladders (can't get my head around how much I would / could have at any point in time)

But thanks for the idea for proposition of LS fund.

Given retirement age is approaching and UK domiciled I'm thinking that LS100 would be good for equity given the UK weighting and impending retirement (although I may not draw from that anyway initially) it would something like FTSE global all cap be a better bet? They seem to track pretty closely 

masonic

the_medium_bear said:

Given retirement age is approaching and UK domiciled I'm thinking that LS100 would be good for equity given the UK weighting and impending retirement (although I may not draw from that anyway initially) it would something like FTSE global all cap be a better bet? They seem to track pretty closely 

Broadly, most global equity funds will deliver similar results, but the FTSE global all cap does not have the UK bias of LS100, so if you see that as a positive then you might want to stick to LS. I'm unconvinced by UK bias, especially given the largest companies listed in the UK generate most of their revenue from abroad. But as a consequence LS100 has slightly less exposure to big US tech, which is something I'm personally keen to dial down a bit.

On the index linked gilt ladder, LateGenXer has set up an app that will calculate a suitable ladder based on your inputs and show you all the cash flows, which can help with understanding how this works. See https://lategenxer.streamlit.app/Gilt_Ladder (don't forget to flick the index-linked switch).

Albermarle

the_medium_bear said:

Oh that is an interesting proposition so having 2 LS fund and the bond version used when equities are having a band time. I'm all for a relatively simple life (I know that comes at a cost of course)

Still spend way to long trying to get my head around index linked gilts and building ladders (can't get my head around how much I would / could have at any point in time)

But thanks for the idea for proposition of LS fund.

Given retirement age is approaching and UK domiciled I'm thinking that LS100 would be good for equity given the UK weighting and impending retirement (although I may not draw from that anyway initially) it would something like FTSE global all cap be a better bet? They seem to track pretty closely 

£10K invested 10 years ago would now be around £37K in a global index and £31K in LS100.

However in the last year or so they seem be tracking each very closely.

the_medium_bear

masonic said:

the_medium_bear said:

Given retirement age is approaching and UK domiciled I'm thinking that LS100 would be good for equity given the UK weighting and impending retirement (although I may not draw from that anyway initially) it would something like FTSE global all cap be a better bet? They seem to track pretty closely 

Broadly, most global equity funds will deliver similar results, but the FTSE global all cap does not have the UK bias of LS100, so if you see that as a positive then you might want to stick to LS. I'm unconvinced by UK bias, especially given the largest companies listed in the UK generate most of their revenue from abroad. But as a consequence LS100 has slightly less exposure to big US tech, which is something I'm personally keen to dial down a bit.

On the index linked gilt ladder, LateGenXer has set up an app that will calculate a suitable ladder based on your inputs and show you all the cash flows, which can help with understanding how this works. See https://lategenxer.streamlit.app/Gilt_Ladder (don't forget to flick the index-linked switch).

many thanks for your insight here you rational about LS100 having less US US tech exposure is one of the drivers for me being in here (although any potential but here will probably ripple through anyway)

Regarding that really usefull giltladder link.

So basically this shows what i could gain for each year for a given gilt, is that price guaranteed (i.e. the at a minimum getting my money back + the yearly interest + yearly inflation) if i held each one to maturity. I guess what i dont understand is the dirty price (which i understand includes accrued interest + inflation)  but how to i project any potential gain in the gilt price (could i get less if the price of the gilt falls or can i just assume if held to maturity it would at least get my principle back. and the plan here to to have multiple guilts maturing each year with a known value (and i assume this is based on holding to maturity

I think ultimately i dont know how to understand the projected return at any given point (i.e. https://www.londonstockexchange.com/stock/T30I/united-kingdom/company-page ) how do i know what the current price is in relation to what i may see as a return in 2030 (given its current price ) I think the percentage increase is aprox 27% but from a high of aprox 50% in 2021 since inception but how do i work out what portions is interest, what is inflation etc and what portion is bond price change (and therefor projection)

if i has sold before maturity i would have got more if i sold in 2021 i presume, its forward estimation i cant understand (i know inflation is an unknown here)

apols for asking probably basic questions, but perhaps i just cant get my head around this

the_medium_bear

Albermarle said:

the_medium_bear said:

Oh that is an interesting proposition so having 2 LS fund and the bond version used when equities are having a band time. I'm all for a relatively simple life (I know that comes at a cost of course)

Still spend way to long trying to get my head around index linked gilts and building ladders (can't get my head around how much I would / could have at any point in time)

But thanks for the idea for proposition of LS fund.

Given retirement age is approaching and UK domiciled I'm thinking that LS100 would be good for equity given the UK weighting and impending retirement (although I may not draw from that anyway initially) it would something like FTSE global all cap be a better bet? They seem to track pretty closely 

£10K invested 10 years ago would now be around £37K in a global index and £31K in LS100.

However in the last year or so they seem be tracking each very closely.

yes there is quite a delta between the two, although my current thinking is the ls100 will have less exposure if a AI bubble does happen with less US tech here, although that bubble could bring a lot of other stocks down with it i suppose