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  • FIRST POST
    • fronty
    • By fronty 6th Nov 19, 7:04 PM
    • 71Posts
    • 19Thanks
    fronty
    HSBC Global Strategy Vs Vanguard LifeStrategy
    • #1
    • 6th Nov 19, 7:04 PM
    HSBC Global Strategy Vs Vanguard LifeStrategy 6th Nov 19 at 7:04 PM
    Hi all,

    Looking at going DIY so just starting to look at mixed asset funds, I want to dump the cash into a small number of funds that have a decent mix of sectors and countries. So far I've come across the Vanguard LifeStrategy and HSBC Global Strategy funds, I'll be checking them out on trustnet but just wondering what people thought of these and whether there's any others I should be looking at?

    I'm horrified at the charges I am currently paying (IFA + platform fees) so hoping to get these down as low as possible.

    I have about 380K to invest, once it's invested I don't intend to chop'n'change, I'll check that annual performance is adequate and hopefully leave it invested until I retire (I'm 50 so circa 10-15 years time).

    Cheers,

    Fronty
Page 2
    • cfw1994
    • By cfw1994 7th Nov 19, 6:15 PM
    • 518 Posts
    • 475 Thanks
    cfw1994
    “Interesting” is not usually a good philosophy for buying an investment.
    Originally posted by Mordko
    I think it is!!
    Especially if you are able to accept that you may be backing a loser
    • Albermarle
    • By Albermarle 7th Nov 19, 6:51 PM
    • 1,852 Posts
    • 1,189 Thanks
    Albermarle
    Is having a SIPP also with Vanguard a case of "eggs in 1 basket"?
    Has the Vanguard pension actually been launched yet ?
    In any case it is not a SIPP as you can only access Vanguard funds .
    It is more similar to a traditional personal pension , with a limited choice of in house funds .
    • simoningram
    • By simoningram 8th Nov 19, 11:09 AM
    • 6 Posts
    • 2 Thanks
    simoningram
    Has the Vanguard pension actually been launched yet ?
    In any case it is not a SIPP as you can only access Vanguard funds .
    It is more similar to a traditional personal pension , with a limited choice of in house funds .
    Originally posted by Albermarle
    No Vanguard haven't launched their SIPP yet, but you can open a SIPP with other providers and invest in Vanguard. I'm doing exactly that with Cavendish who charge a flat 0.25% platform fee, and then you just pay the standard Vanguard charge on top. It works for me, as it doesn't limit me on one providers funds.
    • Potboiler
    • By Potboiler 8th Nov 19, 11:29 AM
    • 11 Posts
    • 5 Thanks
    Potboiler
    My SIPP is invested 50:50 HSBC Global Eq/VLS60 (to reduce remote risk of fund failure)via iWeb so no platform fee, although offset by periodic SIPP charges.
    Over the last three years, virtually nothing in it between the two funds, though it amuses me to watch them compete and diverge according to events.
    • fronty
    • By fronty 8th Nov 19, 11:37 AM
    • 71 Posts
    • 19 Thanks
    fronty
    My SIPP is invested 50:50 HSBC Global Eq/VLS60 (to reduce remote risk of fund failure)via iWeb so no platform fee, although offset by periodic SIPP charges.
    Over the last three years, virtually nothing in it between the two funds, though it amuses me to watch them compete and diverge according to events.
    Originally posted by Potboiler
    How have they performed? I'm quite interested in taking a similar approach.
    • JohnWinder
    • By JohnWinder 8th Nov 19, 11:28 PM
    • 65 Posts
    • 44 Thanks
    JohnWinder
    Hard to quibble with much of that. Haven’t read so much that rang true and sounded sensible for ages. So a couple observations:
    Having a state pension, any investment isn’t ‘all eggs in one basket’, otherwise some people might baulk at having all their investments in one business, at the mercy of one computer system, under the care of one custodian etc.
    Having a single multi-asset fund has lots of appeal. But if you’re regularly drawing from it in retirement at a time when equities are down but bonds are up you’re selling equities when you might prefer to sell bonds. This shortcoming is mitigated by the constant rebalancing that the fund managers will be doing - selling (up) bonds to buy (down) equities.
    Having foreign bonds, particularly govt bonds, for a UK resident wouldn’t seem to me to be adding risk, rather it offers some protection against UK sovereign risk (or do UK citizens think that’s zero!).
    • Mordko
    • By Mordko 9th Nov 19, 4:07 AM
    • 680 Posts
    • 512 Thanks
    Mordko
    Having a single multi-asset fund has lots of appeal. But if you’re regularly drawing from it in retirement at a time when equities are down but bonds are up you’re selling equities when you might prefer to sell bonds
    That’s timing the market. If you want to time then VLS type funds are the wrong vehicle.
    • Mordko
    • By Mordko 9th Nov 19, 4:12 AM
    • 680 Posts
    • 512 Thanks
    Mordko
    Having foreign bonds, particularly govt bonds, for a UK resident wouldn’t seem to me to be adding risk, rather it offers some protection against UK sovereign risk (or do UK citizens think that’s zero!).
    When the currency isn’t pegged and the monetary policy isn’t delegated to another country and the debt is in the currency your government controls then sovereign risk while not zero, is pretty close to zero.

    Some foreign bonds will have higher risk countries. For example countries within the Euro zone which have no control over currency and may be forced to default. Also, hedging is a drag on long term returns
    • Sally57
    • By Sally57 9th Nov 19, 4:00 PM
    • 145 Posts
    • 44 Thanks
    Sally57
    FWIW I hold both VLS and HSBC, plus another low cost multi-asset fund.
    Originally posted by OldMusicGuy
    Would you mind me asking what the other low cost multi asset fund is?
    • Audaxer
    • By Audaxer 9th Nov 19, 6:06 PM
    • 1,918 Posts
    • 1,192 Thanks
    Audaxer
    Thanks for those informative replies folks - helpful as ever.

    Can I just ask if there's any need to go with more than 1? We are building up S&S with VLS. Is having a SIPP also with Vanguard a case of "eggs in 1 basket"?

    Apologies to OP if I've gatecrashed your thread!
    Originally posted by waveydavey48
    There is no need to go with more than one, but if you have a significant amount like OP's £380k I personally would spilt between the 2 multi asset funds, and also maybe hold on separate platforms, rather than have all my eggs in the one basket.
    • Audaxer
    • By Audaxer 9th Nov 19, 6:23 PM
    • 1,918 Posts
    • 1,192 Thanks
    Audaxer
    "Having a single multi-asset fund has lots of appeal. But if you’re regularly drawing from it in retirement at a time when equities are down but bonds are up you’re selling equities when you might prefer to sell bonds"

    That’s timing the market. If you want to time then VLS type funds are the wrong vehicle.
    Originally posted by Mordko
    I don't think that is timing the market - it makes sense not to sell equities if possible in an equity crash. If you were to sell bonds rather than equities in that situation it would also help in rebalancing back to your original weightings. I agree that VLS type funds is the wrong type of funds if that is your strategy.
    • Mordko
    • By Mordko 9th Nov 19, 7:08 PM
    • 680 Posts
    • 512 Thanks
    Mordko
    I don't think that is timing the market - it makes sense not to sell equities if possible in an equity crash. If you were to sell bonds rather than equities in that situation it would also help in rebalancing back to your original weightings. I agree that VLS type funds is the wrong type of funds if that is your strategy.
    Originally posted by Audaxer
    One can argue what makes sense, but selling only bonds during a crash is market timing.

    It makes sense if the next market move is for the stocks to go up and for the bonds to go down. During an actual crash you don’t know what the next market move will be. The market might be in the very early stages of a protracted multi-year bear. In which case it would actually be less damaging to keep selling stocks.

    A passive approach would be to keep your asset allocations constant, which does involve selling underperforming assets, exactly as VLS would do. Deviating from it = an attempt to actively manage your portfolio via market timing
    Last edited by Mordko; 09-11-2019 at 7:16 PM.
    • Audaxer
    • By Audaxer 9th Nov 19, 7:34 PM
    • 1,918 Posts
    • 1,192 Thanks
    Audaxer
    One can argue what makes sense, but selling only bonds during a crash is market timing.

    It makes sense if the next market move is for the stocks to go up and for the bonds to go down. During an actual crash you don’t know what the next market move will be. The market might be in the very early stages of a protracted multi-year bear. In which case it would actually be less damaging to keep selling stocks.

    A passive approach would be to keep your asset allocations constant, which does involve selling underperforming assets, exactly as VLS would do. Deviating from it = an attempt to actively manage your portfolio via market timing
    Originally posted by Mordko
    I agree that the best strategy is to keep your asset allocation constant whether you invest in a multi asset fund or have a single sector portfolio. Multi asset funds do that for you which is great. However if your investment portfolio is made up of single sector equity funds (either active or passive or a mix of both) amounting to say 60% of your portfolio, and separate bond funds amounting to 40% of your portfolio, the best drawdown strategy would be to sell whatever keeps your overall allocation at 60:40 whatever the state of the markets. I don't see that as market timing as I think that is the strategy most experienced advisers on here advise for single sector portfolios.
    • Mordko
    • By Mordko 9th Nov 19, 7:57 PM
    • 680 Posts
    • 512 Thanks
    Mordko
    I agree that the best strategy is to keep your asset allocation constant whether you invest in a multi asset fund or have a single sector portfolio. Multi asset funds do that for you which is great. However if your investment portfolio is made up of single sector equity funds (either active or passive or a mix of both) amounting to say 60% of your portfolio, and separate bond funds amounting to 40% of your portfolio, the best drawdown strategy would be to sell whatever keeps your overall allocation at 60:40 whatever the state of the markets. I don't see that as market timing as I think that is the strategy most experienced advisers on here advise for single sector portfolios.
    Originally posted by Audaxer
    There are different ways of keeping asset allocation constant. Using VLS would achieve that, including when you sell VLS units during a crash. A comment above stated they saw sale of VLS units as a problem as they include stocks, hence wanted to deviate from VLS asset allocation during a crash. That would be timing. Ok?
    Last edited by Mordko; 09-11-2019 at 8:01 PM.
    • Ellie78
    • By Ellie78 9th Nov 19, 10:22 PM
    • 67 Posts
    • 64 Thanks
    Ellie78
    Sorry to butt in on this thread but is the HSBC GS Balanced a passive tracker fund? The info I've seen says "actively managed", "volatility managed" but in other places "team managed" so I'm a little confused.

    I'm looking for one fund to open a S&S Isa with. Thanks.
    Last edited by Ellie78; 09-11-2019 at 10:40 PM.
    Mortgage - £32,800 remaining
    2019 OPs - £15,942
    • JohnWinder
    • By JohnWinder 10th Nov 19, 8:10 AM
    • 65 Posts
    • 44 Thanks
    JohnWinder
    The questions are getting easier as the thread goes on......don't let it end.
    Three seconds of skimming into the HSBC Key Investor Information is: 'The Fund is actively managed and is not managed with reference to a specific benchmark.'
    So it's actively managed, as you say. Can't find a meaning for 'team managed' anywhere. Perhaps look in the footnotes where you read it, but it doesn't imply index tracker to me.
    • AnotherJoe
    • By AnotherJoe 10th Nov 19, 9:36 AM
    • 16,357 Posts
    • 19,656 Thanks
    AnotherJoe
    Sorry to butt in on this thread but is the HSBC GS Balanced a passive tracker fund? The info I've seen says "actively managed", "volatility managed" but in other places "team managed" so I'm a little confused.

    I'm looking for one fund to open a S&S Isa with. Thanks.
    Originally posted by Ellie78

    Surely "team managed" simply means there isn't one possibly iconoclastic / off the rails /reckless manager ? So its an attempt to calm your fears there might be one incompetent individual in charge.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • MK62
    • By MK62 10th Nov 19, 11:15 AM
    • 530 Posts
    • 420 Thanks
    MK62
    Sorry to butt in on this thread but is the HSBC GS Balanced a passive tracker fund? The info I've seen says "actively managed", "volatility managed" but in other places "team managed" so I'm a little confused.

    I'm looking for one fund to open a S&S Isa with. Thanks.
    Originally posted by Ellie78
    The GS Balanced fund is itself made up of several underlying passive tracker funds/etfs.......the relative amounts of each underlying fund are periodically varied to manage the volatility of the overall fund - the decisions on that are taken by a team (team managed) rather than one individual manager, but the fact that the decisions are taken (and will often be subjective), means the overall GS Balanced fund is technically "actively managed" (though the level of that active management is much less than you'd get (and so pay for) in a more conventional "actively managed" fund)

    I suppose you could call the Global Strategy series "hybrid" funds - mainly passive, but with a dose of active management involved.
    • JohnWinder
    • By JohnWinder 10th Nov 19, 12:18 PM
    • 65 Posts
    • 44 Thanks
    JohnWinder
    ‘mainly passive, but with a dose of active management involved’
    and charging active or passive fund-like fees? Where are we on that spectrum?
    In the old days when funds charging ‘active’ fees and called active kept their holdings close to the index holdings because someone responsible lacked the testicles to risk straying far from the index, folk described them as closet indexers.
    • Mordko
    • By Mordko 10th Nov 19, 12:26 PM
    • 680 Posts
    • 512 Thanks
    Mordko
    ‘mainly passive, but with a dose of active management involved’
    and charging active or passive fund-like fees? Where are we on that spectrum?
    In the old days when funds charging ‘active’ fees and called active kept their holdings close to the index holdings because someone responsible lacked the testicles to risk straying far from the index, folk described them as closet indexers.
    Originally posted by JohnWinder
    Not the same. HSBC GS is open about actively managing a bunch of index funds. Makes it an active investment. Closet funds would claim to be stock pickers while in reality replicating a single index.
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