Vanguard cuts LifeStrategy fees and reduces UK bias

bagand96

Anywhere obvious to go that's a similar fund to VLS retaining the UK bias?  For someone who has split investments across some global funds but also VLS to keep a bit of home bias?

Albermarle

bagand96 said:

Anywhere obvious to go that's a similar fund to VLS retaining the UK bias?  For someone who has split investments across some global funds but also VLS to keep a bit of home bias?

VLS funds are only reducing the home bias, not eliminating it.
The UK equity % is only reducing from 25% to 20%.

eskbanker

bagand96 said:

Anywhere obvious to go that's a similar fund to VLS retaining the UK bias?  For someone who has split investments across some global funds but also VLS to keep a bit of home bias?

https://monevator.com/passive-fund-of-funds-the-rivals/ lists the main multi-asset players and labels some of them as having a home bias, so perhaps worth using that as a starting point for further research?

masonic

bagand96 said:

Anywhere obvious to go that's a similar fund to VLS retaining the UK bias?  For someone who has split investments across some global funds but also VLS to keep a bit of home bias?

The easiest way to have control over your home bias is to add a UK fund alongside your global funds, rather than VLS. It would be cheaper too. I don't personally think that multi-asset funds are the right choice if it leads you to fight their asset allocation.

poppy10_2

A long overdue reduction in the ridiculous overweight to the UK. Would have liked to see the fee fall further though

eskbanker

poppy10_2 said:

A long overdue reduction in the ridiculous overweight to the UK. Would have liked to see the fee fall further though

Not sure the allocation has been worthy of ridicule, but obviously there have been, and will be, plenty of options for those who choose different weightings....

GeoffTF

eskbanker said:

poppy10_2 said:

A long overdue reduction in the ridiculous overweight to the UK. Would have liked to see the fee fall further though

Not sure the allocation has been worthy of ridicule, but obviously there have been, and will be, plenty of options for those who choose different weightings....

Vanguard has said more than once in interviews that the UK bias is there for marketing reasons. LifeStrategy has been a top seller so the UK bias certainly has not been ridiculous. Vanguard is no doubt changing tack because it believes that market preferences have changed.

dunstonh

GeoffTF said:

eskbanker said:

poppy10_2 said:

A long overdue reduction in the ridiculous overweight to the UK. Would have liked to see the fee fall further though

Not sure the allocation has been worthy of ridicule, but obviously there have been, and will be, plenty of options for those who choose different weightings....

Vanguard has said more than once in interviews that the UK bias is there for marketing reasons. LifeStrategy has been a top seller so the UK bias certainly has not been ridiculous. Vanguard is no doubt changing tack because it believes that market preferences have changed.

IFAs had been badgering Vanguard for many years to have less home bias.  

IFAs account for more investment value than DIY investors.  Much of that will be single sector funds in advisory portfolios or Vanguard funds held within third party MPS. - ironically, some third party MPS get the institutional class Vanguard funds whilst Vanguard itself only uses retail class in its own MPS and OEICs.

 The global version via MPS was their way to offer an option for IFAs.         They have now offered it to DIY investors via the OEIC but another reason is also because of CGT.   The reduction in CGT to £3k annual allowance and the increased rate, means holding an MPS in a GIA is not a good idea.   Many of the MPS portfolios have launched OEIC versions of their MPS to use in the GIA.      Vanguard didnt have a global version in the OEIC. Now they do.

Giving the choice or near market cap or a tile is a good thing.  It is just somewhat unlucky for them that the US has been underperforming for a while and it looks like they are launching it at the wrong time.   But the reality is that these things take a while to set up and US was top when their work started.   And as we know, global vs US cycles. So, it allows people to move between the two as and when they want rather than have to move to a different MPS/fund house.

Albermarle

poppy10_2 said:

A long overdue reduction in the ridiculous overweight to the UK. Would have liked to see the fee fall further though

0.2% for a multi asset fund is pretty competitive, and in line with the cheaper end of the markets for these type of funds.

GeoffTF

dunstonh said:

IFAs account for more investment value than DIY investors.  Much of that will be single sector funds in advisory portfolios or Vanguard funds held within third party MPS. - ironically, some third party MPS get the institutional class Vanguard funds whilst Vanguard itself only uses retail class in its own MPS and OEICs.

"What exactly is changing in the model portfolios?

We’re switching to institutional share classes for certain funds held in the portfolios. These share classes hold the exact same assets as the retail share classes currently in the portfolios, but have lower Annual Management Charges. 



We’re passing 100% of this cost saving directly to your clients as part of our mission to deliver value to advisers and investors."

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

It is not clear what the "certain funds" are, but perhaps Vanguard is matching the competition here.