HSBC Global Strategy Vs Vanguard LifeStrategy

fronty · 6 November 2019 at 8:04PM

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

AnotherJoe · 6 November 2019 at 8:09PM

They are decent funds. I prefer HSBC to Vanguard Lifestrategy because of the artificial 25% in a few industries. There are other vanguard than LifeStrategy though.
Bear in mind, "their" performance is really teh performance of global markets, that's what you are signing up for

El_Torro · 6 November 2019 at 8:22PM

Personally I own both funds, mainly because they are not identical and I do see benefits of both.

Vanguard Lifestrategy has about 25% in the UK, whereas HSBC Global Strategy tends to apply global weighting, which currently for the UK is about 4%.

There is more to it than that. VLS is more rigid when it comes to its allocations. So for example if you buy VLS60 you know that you will always have 40% of your investment in bonds. HSBC is more fluid and can change its allocation based on what the fund manager thinks is best.

That's the crux of it. Others have explained it much better than I have though. Take a look at this article for example: https://monevator.com/passive-fund-of-funds-the-rivals/

On this forum you'll find that most people prefer VLS. Best to do your own research and decide which is best suited for you though. Like me you might decide that having multiple multi asset funds isn't a bad choice.

Audaxer · 6 November 2019 at 8:27PM

I think they are both a good option. I have HSBC Global Strategy Balanced and Vanguard LifeStrategy 60 in my portfolio, which are both medium risk and well diversified globally. If you look at them on Trustnet they have fairly similar returns and volatility over the last 5 years. I think to have both as your main funds in your portfolio is a decent option.

shinytop · 6 November 2019 at 8:41PM

Like others I've got a foot in each camp and am going for both HSBC Balanced and VLS60. The purists will will say pick the one that matches your investment strategy, risk appetite, blah blah. Me, I'm just hedging my bets a bit although I do want a bit more UK bias than HSBC gives me hence going for some VLS. I doubt there's much in it really.

[Deleted User] · 6 November 2019 at 9:46PM

If it were me, I would go for VLS because:
1. Don’t want a fund manager to mess with the allocations
2. Being a little overweight in the home market makes sense as long as it’s modest (Vanguard has a paper demonstrating that).

Don’t particularly like what Vanguard is doing with bonds. They tend to pick foreign bonds as well as domestic and then hedge them. While juicing returns (so,etimes), not sure it helps with the overall portfolio risk profile. Still... It’s a relatively minor problem given the convenience.

Don’t think “hedging” by having both funds makes any sense but it won’t do too much harm either. Just an unnecessary complication which does nothing for diversification or expected returns.

shinytop · 7 November 2019 at 7:22AM

Deleted_User wrote: »

Don’t think “hedging” by having both funds makes any sense but it won’t do too much harm either. Just an unnecessary complication which does nothing for diversification or expected returns.

You're probably right but it (probably completely illogically) makes me sleep a tiny bit better and that's got to be worth it

MK62 · 7 November 2019 at 8:57AM

Take your pick, or use both.........but be aware that while they're probably the best known round here, they aren't the only two horses for that course....

Sat here today though, there is simply no way to know which, if any, of the "roughly equivalent" funds from each range will fare best over the next 5, 10, 20 years.........so I really wouldn't fret that much over it........once you've decided on a strategy of using Global Multi Asset fund(s) (or fund of funds), at around the risk level you feel comfortable with, then just pick one (or more....

).....or you could end up in "analysis paralysis" mode.......

scoot65 · 7 November 2019 at 10:23AM

I also have both funds HSBC GS (Balanced) and VLS60. Although I'm no expert, I just feel that having both gives me a good balance. The large UK weighting in VLS was factor in me not just having that fund alone.

waveydavey48 · 7 November 2019 at 11:52AM

I'm trying to educate myself so please forgive me if I have this wrong.

My understanding was that if someone doesn't want to use an IFA they could DIY and that would require them to decide their objectives and appetite for risk then research what funds are suitable for their situation. They would then buy those funds (say about 6), wrapped in a SIPP, and they would have to review their portfolio, probably annually and make any changes.

Is it the case, as it seems from the posts above, that there is a simple "fire and forget" option ie just place the lot in VLS or HSBC global strategy?

I believe VLS (and presumably HSBC GS) is rebalanced automatically so there's actually no need to do anything if you don't want to?

I know lots of forum members are interested in investing and I'm full of admiration but is the above a reasonable option for those of us who have no interest in the subject but want reasonable returns but don't want to use an IFA?

El_Torro · 7 November 2019 at 12:09PM

waveydavey48 wrote: »

I'm trying to educate myself so please forgive me if I have this wrong.

My understanding was that if someone doesn't want to use an IFA they could DIY and that would require them to decide their objectives and appetite for risk then research what funds are suitable for their situation. They would then buy those funds (say about 6), wrapped in a SIPP, and they would have to review their portfolio, probably annually and make any changes.

Is it the case, as it seems from the posts above, that there is a simple "fire and forget" option ie just place the lot in VLS or HSBC global strategy?

I believe VLS (and presumably HSBC GS) is rebalanced automatically so there's actually no need to do anything if you don't want to?

I know lots of forum members are interested in investing and I'm full of admiration but is the above a reasonable option for those of us who have no interest in the subject but want reasonable returns but don't want to use an IFA?

Yes, VLS, HSBC GS and other multi asset funds (for example the ones listed in the link in my earlier post) rebalance automatically. So in theory you could just leave your investment as it is and after 10 years or more, when you start cashing it in, you will hopefully have had a good return.

There is more to it than that, including the psychology of making sure you don't sell when you shouldn't. So for some people an IFA will still add value. Multi asset funds make it easier than ever to DIY these days though.

Arguably people who buy various different geographical funds are pretty much replicating a multi asset fund anyway, just making things a bit more complicated for themselves.

For those who have faith in managed funds (Fundsmith, Lindsell, etc...) multi asset funds aren't really suitable as they are passive.

For some buying individual shares is the answer. This isn't a popular choice in this forum though, due to the level of complexity, cost and risk involved.

HSBC Global Strategy Vs Vanguard LifeStrategy

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