Vanguard cuts LifeStrategy fees and reduces UK bias

ColdIron

Announcement from Citywire:

• Vanguard is cutting fees across its £52bn LifeStrategy funds and reducing the range’s bias to UK assets.
• The passive investment giant will reduce fees on the multi-asset funds from 0.22% to 0.2% on 27 January. The funds’ allocation to both UK equities and bonds will meanwhile be cut between March and June.
• The UK portion of the funds’ equity holdings will fall from 25% to 20% while the domestic allocation to bonds will drop from 35% to 20% of fixed income holdings.
• It is making the same asset allocation changes to the Classic model portfolio service (MPS). 
• Alongside these changes, Vanguard is also launching a new LifeStrategy Global fund range, which will adopt a purely market cap-weighted approach, without home bias.

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https://citywire.com/wealth-manager/news/vanguard-cuts-lifestrategy-fees-and-reduces-uk-bias/a2482308

dunstonh

Vanguard has been running a global variant on the MPS side for a couple of years.   So, I guess it was only a matter of time before they launched the OEIC version.

Ironically, the classic version has come into its own over 2025 because of its lower US allocation.    

The fees bit doesn't surprise me.    An increasing number of alternatives were coming in cheaper.

SnowMan

Link to the Vanguard website information on this

https://www.vanguard.co.uk/professional/what-we-offer/multi-asset/lifestrategy-is-evolving

aroominyork

VLS100% was never good value and still won't be. You can get a similar geographic allocation using 80% world index and 20% UK index, at a cost under 0.12%.

ColdIron

It won't worry most (all?) here but it's odd that they're doing a sell and buy for the MPS version, which will trigger a CGT event, rather than a share class conversion. An unwelcome and unplanned cost for some

Albermarle

Slightly odd timing as many investors have been increasing UK exposure and reducing US exposure.

As already said the UK bias has actually been a good point in 2025.

ColdIron

Albermarle said:

Slightly odd timing as many investors have been increasing UK exposure and reducing US exposure.
As already said the UK bias has actually been a good point in 2025.

They say that investors have become more comfortable investing internationally and that they have been listening to them and their advisors. The other point they make is that the UK proportion of global equity investments has been reducing (3.3% of the MSCI All-Countries World index) meaning that the 25% was becoming even more overweighted

I've not seen such a robust argument for the much larger reduction in UK fixed income from 35% to 20% (4.4% weighting in the Bloomberg Global Aggregate Bond index)

leosayer

ColdIron said:

It won't worry most (all?) here but it's odd that they're doing a sell and buy for the MPS version, which will trigger a CGT event, rather than a share class conversion. An unwelcome and unplanned cost for some

You'd have thought Vanguard would have been more sensitive to generating inflated tax bills for their clients given their recent legal troubles in the US:

https://www.reuters.com/sustainability/boards-policy-regulation/judge-approves-vanguards-revised-settlement-over-mutual-fund-tax-bills-2025-09-09/

EthicsGradient

Albermarle said:

Slightly odd timing as many investors have been increasing UK exposure and reducing US exposure.

As already said the UK bias has actually been a good point in 2025.

On the other hand, it looks a bit like "sell when high". Or at least "sell after a better than usual period".

GeoffTF

TheTelltaleChart said:

Well, I guess you wouldn't be holding the MPS in a GIA anyway if you wanted to avoid CGT events, or to control when they happen. Since it will generate CGT events from regular rebalancing. Though this will probably generate bigger "events".

No, regular rebalancing within a fund does not generate CGT events under UK tax legislation (unlike in the US).

HHarry

Albermarle said:

Slightly odd timing as many investors have been increasing UK exposure and reducing US exposure.

As already said the UK bias has actually been a good point in 2025.

Agreed.  I specifically picked VLS for this reason.

It seems a bit strange to introduce a Global equity / bond range and then adjust the traditional VLS to be more global.