Nutmeg, Vanguard Lifestrategy or Ready-Made Portfolio?
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If you went down that route it would be better not to use a mixed asset fund and instead hold equities and bonds separately, passively rebalancing as you decumulate.Chickereeeee wrote: »Just to play devils advocate here: it is often suggested that one has several pots of money, especially when approaching or in retirement, with different investment horizons. Near term cash pot, through to long term high-equity proportion pot.
OK, six pots may be too many, but would it not be reasonable to use different LS's for these pots? LS 100 for the pot that you plan not to touch for quite some time, LS 20 for fairly near term use pot? In theory, performance would equal LS60, but practically and emotionally, maybe not.
C0 -
The question of "Robo Advisors" appears to be outside of the regular contributors experience and dismissed without discussionhttps://uk.trustpilot.com/review/nutmeg.com I have read a number of articles recently that suggest returns are significantly better than their human counterparts and significantly cheaper.
Well, just to be a little flippant and dismissive:
- much of the commentary that says they are better than cheaply-managed multi asset funds is written by the promoters of robo advised solutions who are doing self-publicising press releases.
- returns significantly better than human counterparts is not something demonstrably proven, given many of the services do not have three years operating history let alone five or ten
- trustpilot reviews are generally not written by financial professionals but by laymen who can say the service was nice but often are not well placed to opine on the reward they got for their risk -especially with short lifespan of the products so far and the fact that we have been in an eight year bull market for most asset classes: "hey, I like this product as I made money and the return was really good" means nothing without a LOT of context.
Robo advisors do undoubtedly fill a niche, and some will likely emerge with decent spoils after the industry matures and there's some consolidation where some thrive and some get swallowed up. Meanwhile, the forum tends to focus more on the DIY alternatives for people in that niche (at the levels too small for personalised advice).
After all, it's a money saving site and some of the robos are more expensive than managed multi asset funds at the small end and no cheaper than personalised advice at the very large end. Subject to challenge with unsustainable book-building promotions such as fee-free for first x months or on first £10k or whatever, of course.0 -
The question of "Robo Advisors" appears to be outside of the regular contributors experience and dismissed without discussionhttps://uk.trustpilot.com/review/nutmeg.com I have read a number of articles recently that suggest returns are significantly better than their human counterparts and significantly cheaper.
Trustpilot is easily abused and not at all reliable. We have seen plenty of scams with good trustpilot ratings and reviews. Fakers can easily manipulate them.
One thing we have seen a fair bit on this board is where people looking to invest small amounts for the first time view "quality" very different to mainstream and experienced investors. Those attracted by robo-advice measure quality by facebook likes or things like trustpilot or how visual the app is. Whereas experienced investors look at the investments and the charges.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Chickereeeee wrote: »Just to play devils advocate here: it is often suggested that one has several pots of money, especially when approaching or in retirement, with different investment horizons. Near term cash pot, through to long term high-equity proportion pot.
OK, six pots may be too many, but would it not be reasonable to use different LS's for these pots? LS 100 for the pot that you plan not to touch for quite some time, LS 20 for fairly near term use pot?
In principle I think that's an entirely reasonable approach; there are others ways of achieving this goal, as masonic points out, but the idea of having separate investment pots earmarked with different investment horizons, and invested accordingly, seems reasonable.
I do this sort of thing myself; different to the example you use, but aiming to address a similar issue of matching the volatility of the pots to the timeframe over which they're expected to be accessed and drawndown (spent). Non-volatile cash and cash-like for the immediate and short term; volatile equities for the longest term; various things inbetween.
For someone a very long way from retirement, this wouldn't be sensible, unless some of the invested funds really had a much different (shorter) investment horizon than the rest, and were intended to be spent in the nearer term, and were accessible (eg. non-pension wrapped). I didn't get the impression the OP's goal was earlier access to part of the invested monies, so probably not applicable to them.0 -
Wouldn't something like this alongside a good old fashioned emergency cash pool be a lot less hassle?
http://monevator.com/vanguard-target-retirement-funds/'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0 -
Wouldn't something like this alongside a good old fashioned emergency cash pool be a lot less hassle?
http://monevator.com/vanguard-target-retirement-funds/
It depends what problem you're trying to solve (what requirement you're trying to address).
A single target retirement fund would be useful for targeting a single date after which you were seeking a portfolio 'derisked' to Vanguard's particular 30:70 equity:bond recipe. If that's what you're after then that would seem a good product choice.
But, if you're not intending to cash-in the fund at the target date then an entire portfolio that's been fully dialed back to 30% equities may not be what you want; after all, the investment horizon for many newly retired people may be several decades. Therefore, for money not earmarked for being spent for another decade or two or three or four, an equity allocation of 30% might seem very low. For example, it wouldn't suit me or mine.
You might choose to address this issue with a ladder of target retirement funds, each targeting dates 5 years apart (for example), in attempt to derisk separate pots as you intend to call upon them for your spending. Obviously, that's increasing the hassle factor as you attempt to address more complex needs.
Depending on what problem you're trying to solve, the cat-skinning options are endless!0 -
My confusion was in not realising that the 5 vangaurds funds will be holding the same equities and bonds etc, so yes that means that i should have just put it all in the 60.
But as ive said, i didnt have/wont have to pay anything for having the 5 rather than just the one.
Can anyone see any other real issues with keeping my 5 vanguards or do you recommend closing 4 and putting all my money in the 60, which would be my chosen risk level.
Thanks again.
Do the different Vanguard LS products holdtrack exactly the same indexes in the same proportions, though?
That is, is 'Index x' 10% of the equities portion (alone) in each of the LifeStrategy funds?0 -
The percentage allocations in each Lifestrategy Fund are actively maintained.
I don't think the internals are entirely set in stone long term as Vanguard might tweak the regional parameters slightly within the fund's headline equity/bond ratio but I'm not certain how or when or if I've imagined that.'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0 -
A quick look at the top 10 holdings in VLS 20 and 40 shows that the funds they hold are similar but the allocations are different. This also means they have different geographic splits (but they are mainly US and UK).Do the different Vanguard LS products holdtrack exactly the same indexes in the same proportions, though?
That is, is 'Index x' 10% of the equities portion (alone) in each of the LifeStrategy funds?0 -
Do most people go for VLC ACC or INC funds? I guess INC class gives more visibility ??Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..0
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