Why doesn't everyone just buy Vanguard LifeStrategy?

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  • aroominyork
    aroominyork Posts: 2,826 Forumite
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    dunstonh wrote: »
    HSBC, since they amended the strategy a few years back has shown constant outperformance on the version that matches VLS60. The others do not match close enough in risk. If you are looking at VLS60 then HSBC now appears to be the better option.
    A quick comparison of VLS and HBSC over five years:

    HSBC Cautious (14% equities), +28%
    HSBC Balanced (46% equities), +60%
    HSBC Dynamic (68% equities), +80%

    VLS20, +32%
    VLS40, +45%
    VLS60, +60%
    VLS80, +75%
    VLS100, +93%.

    So HSBC knocks spots off VLS, but presumably that's because HSBC is slanted to non-UK equities, eg Dynamic is 64.43% non-UK, 4.81% UK. So while global markets outperform UK and Sterling is weak, HSBC will win.
  • Audaxer
    Audaxer Posts: 3,508 Forumite
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    aroominyork wrote: »
    A quick comparison of VLS and HBSC over five years:

    HSBC Cautious (14% equities), +28%
    HSBC Balanced (46% equities), +60%
    HSBC Dynamic (68% equities), +80%
    aroominyork, I think the HSBC equities percentages above are incorrect. As far as I can see HSBC Balanced has 63% equities and HSBC Dynamic has 84% equities, so returns are quite similar to VLS funds with around the same percentage equities.
  • Gadfium
    Gadfium Posts: 763 Forumite
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    aroominyork wrote: »
    A quick comparison of VLS and HBSC over five years:

    HSBC Cautious (14% equities), +28%
    HSBC Balanced (46% equities), +60%
    HSBC Dynamic (68% equities), +80%

    VLS20, +32%
    VLS40, +45%
    VLS60, +60%
    VLS80, +75%
    VLS100, +93%.

    So HSBC knocks spots off VLS, but presumably that's because HSBC is slanted to non-UK equities, eg Dynamic is 64.43% non-UK, 4.81% UK. So while global markets outperform UK and Sterling is weak, HSBC will win.


    Are you talking about the HSBC Global Strategy funds? If so, the HSBC Global Strategy Balanced has 80% equities.
    https://www.trustnet.com/factsheets/o/g1hd/hsbc-global-strategy-balanced-portfolio-c-acc
  • Audaxer
    Audaxer Posts: 3,508 Forumite
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    Gadfium wrote: »
    Are you talking about the HSBC Global Strategy funds? If so, the HSBC Global Strategy Balanced has 80% equities.
    https://www.trustnet.com/factsheets/o/g1hd/hsbc-global-strategy-balanced-portfolio-c-acc
    I think the Trustnet figures are wrong as the HSBC Global Strategy Balanced is around 63% equities. Under Asset Classes it shows European Equities as 28.1% which does not match the Top Holdings list which shows it is a Bond index that is 28.1%
  • aroominyork
    aroominyork Posts: 2,826 Forumite
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    edited 9 October 2017 at 9:17AM
    Audaxer has picked up the mistake on trustnet. My fund analysis was from HL (I think the hyperlinks work for non account holders).

    Balanced fund
    International Equities 42.62%
    International Bonds 39.55%
    Property 4.75%
    Cash and Equiv. 4.15%
    UK Equities 3.24%
    UK Corporate Bonds 2.35%
    UK Gilts 1.49%
    Other 1.43%
    Managed Funds 0.18%
    Investment Trusts 0.12%
    Alternative Trading Strategies 0.11%
    Money Market 0.00%

    Dynamic fund
    International Equities 63.43%
    International Bonds 19.96%
    Property 5.24%
    UK Equities 4.81%
    Cash and Equiv. 3.82%
    Other 1.88%
    UK Corporate Bonds 0.35%
    Investment Trusts 0.18%
    Managed Funds 0.17%
    Alternative Trading Strategies 0.16%
  • dunstonh
    dunstonh Posts: 116,358 Forumite
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    Looking at FE, the HSBC Balanced fund looks like it has a snapshot error on the asset weightings with European equity and global fixed interest being reported the wrong way around in the August snapshot.

    This has happened before, including on this fund. For example, North America tends to hover in the mid 20s on this fund but the Sept 2015 snapshot had just 2% N America and global fixed interest shot up by the difference. The following month, it went back again.
    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.
  • zzzt
    zzzt Posts: 407 Forumite
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    Eco_Miser wrote: »
    Self evidently, the value of the stock markets does not always goes up, or there would be no crashes, dips, or corrections.

    Not sure if you are intentionally misunderstanding, but I'm well aware of that. The point is that they recover, and you have to look at them over a longer time period, which is what my story about someone investing just before 2008 was about.
  • aroominyork
    aroominyork Posts: 2,826 Forumite
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    zzzt wrote: »
    Not sure if you are intentionally misunderstanding, but I'm well aware of that. The point is that they recover, and you have to look at them over a longer time period, which is what my story about someone investing just before 2008 was about.
    zzzt, there is a huge divergence of expertise among people posting on here and some of the less experienced people (such as, I think, you and me) can misunderstand fundamentals of investing - look at any one day's questions to see that. So the more experienced people will often err on the side of caution to set us right. It's usually meant with the best of intentions (though you'll get the occasional less generous poster).
  • Eco_Miser
    Eco_Miser Posts: 4,708 Forumite
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    zzzt wrote: »
    Not sure if you are intentionally misunderstanding, but I'm well aware of that. The point is that they recover, and you have to look at them over a longer time period, which is what my story about someone investing just before 2008 was about.
    No, I'm pointing out that your statement was wrong, markets do not always go up.

    In the long term, most recover, but that may take too long for some who become forced sellers while the markets are in a trough.
    Eco Miser
    Saving money for well over half a century
  • Malthusian
    Malthusian Posts: 10,936 Forumite
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    edited 9 October 2017 at 12:08PM
    Eco_Miser wrote: »
    No, I'm pointing out that your statement was wrong, markets do not always go up.

    In the long term, most recover, but that may take too long for some who become forced sellers while the markets are in a trough.

    If you become a forced seller the market still goes up, just without you in it.

    This sounds like one of those supposed philosophical conundrums like "if a tree falls alone in the forest does it still make a sound". To which any eight-year-old could tell you the answer is "yes". If you make a loss by selling out of the market prematurely, if you miscalculate the level of cash you needed to meet your needs, that is not the market's problem. Just as a sound wave does not care whether there are any ears around to perceive it.
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