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Vanguard life strategy tracker

Closed-end funds and OEICs
Goderich
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Vanguard life strategy tracker

#171100

Postby Goderich » October 3rd, 2018, 2:26 pm

Dear all,
I am looking to invest in this with only a r part of my investments, ideally looking for dividends rather than growth. This is based on going the tracker route and that they have low fees. Is there anything I need to worry about with Vanguard? Would another Vanguard tracker be better for dividends? Thanks in advance,
Andrew

vrdiver
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Re: Vanguard life strategy tracker

#171161

Postby vrdiver » October 3rd, 2018, 5:33 pm

Just a comment on the low fees. The OCF for a Life Strategy fund is 0.22%, but the fund is invested in other funds which will have their own Ongoing Charges, and then you will need to consider the platform fee for funds on top of that: so you may well end up paying 0.6 - 0.7% in charges against your capital when they are all added up. For the avoidance of doubt, note that the Lifestrategy trackers (20, 40, 60, 80 and 100) are funds, not ETFs, so will have costs and platform charges accordingly.

You didn't mention which Vanguard Life Strategy fund you were interested in, but did say that dividends were important to you. The Life Strategy 100 fund has a yield of around 1.66%, the LS80 a yield of 1.52%*. For a dividend investor these don't seem particularly high - you could purchase an Investment Trust that would pay over 4% and give you exposure to a broad range of equities; CTY is one example but others may post better choices, depending on any additional information you might add.

VRD


* https://www.vanguardinvestor.co.uk/what ... products#p

monabri
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Re: Vanguard life strategy tracker

#171177

Postby monabri » October 3rd, 2018, 6:15 pm

Vanguard sell "VHYL" - Vanguard High Yield which invests in over 1600 companies around the World. The "high yield" is only about 3.2% though.

here's a link to a little more info on VHYL from Hargreaves' website.

https://www.hl.co.uk/shares/shares-sear ... gh-div-yld


VRD mentions City of London IT (CTY) which is primarily invested in UK companies and the yield is 4.1%. They pay dividends 4x per year so just over 1% per quarter.

https://www.hl.co.uk/shares/shares-sear ... st-ord-25p

Here's the top 10 that CTY invest in.




Then, if you are looking further afield, outside of the UK, you might wish to look at Murray International (MYI) or Henderson Far East (HFEL).


These investment trusts are quite popular and their yields are 4.39% for MYI

https://www.hl.co.uk/shares/shares-sear ... -25p-share


And a higher 5.64% for HFEL

https://www.hl.co.uk/shares/shares-sear ... td-ord-npv

Muddywaters
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Re: Vanguard life strategy tracker

#171183

Postby Muddywaters » October 3rd, 2018, 6:43 pm

vrdiver wrote:Just a comment on the low fees. The OCF for a Life Strategy fund is 0.22%, but the fund is invested in other funds which will have their own Ongoing Charges, and then you will need to consider the platform fee for funds on top of that: so you may well end up paying 0.6 - 0.7% in charges against your capital when they are all added up. For the avoidance of doubt, note that the Lifestrategy trackers (20, 40, 60, 80 and 100) are funds, not ETFs, so will have costs and platform charges accordingly.

You didn't mention which Vanguard Life Strategy fund you were interested in, but did say that dividends were important to you. The Life Strategy 100 fund has a yield of around 1.66%, the LS80 a yield of 1.52%*. For a dividend investor these don't seem particularly high - you could purchase an Investment Trust that would pay over 4% and give you exposure to a broad range of equities; CTY is one example but others may post better choices, depending on any additional information you might add.

VRD


* https://www.vanguardinvestor.co.uk/what ... products#p



Underlying fund charges feature in the ocf

vrdiver
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Re: Vanguard life strategy tracker

#171192

Postby vrdiver » October 3rd, 2018, 7:24 pm

Muddywaters wrote:Underlying fund charges feature in the ocf

I'm happy to be corrected, but are you sure? From Vanguard's definition of OCF*:
Ongoing charges figure (OCF)
The sum of investment management fees (the fees paid to the portfolio manager to invest your money and manage the fund) and administrative and other expenses (which cover all costs and expenses connected with the operation of the fund, which includes administrative fees, shareholder's registration and transfer agency fees, custody fees and all other operating expenses).

You'll note that it refers only to the portfolio manager and costs of the fund, not the underlying funds.

Since the 20, 40, 60, 80 and 100 LS funds all have the same 0.22% charge, I'd be really surprised if they managed to do that whilst investing in different assets in different ratios.

VRD


*https://www.vanguardinvestor.co.uk/what-we-offer/life-strategy-products (and click on the OCF column header).

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Re: Vanguard life strategy tracker

#171199

Postby Muddywaters » October 3rd, 2018, 7:37 pm

vrdiver wrote:
Muddywaters wrote:Underlying fund charges feature in the ocf

I'm happy to be corrected, but are you sure? From Vanguard's definition of OCF*:
Ongoing charges figure (OCF)
The sum of investment management fees (the fees paid to the portfolio manager to invest your money and manage the fund) and administrative and other expenses (which cover all costs and expenses connected with the operation of the fund, which includes administrative fees, shareholder's registration and transfer agency fees, custody fees and all other operating expenses).

You'll note that it refers only to the portfolio manager and costs of the fund, not the underlying funds.

Since the 20, 40, 60, 80 and 100 LS funds all have the same 0.22% charge, I'd be really surprised if they managed to do that whilst investing in different assets in different ratios.

VRD


*https://www.vanguardinvestor.co.uk/what-we-offer/life-strategy-products (and click on the OCF column header).


I’m pretty confident but I’ve been wrong before so....

I suspect, although don’t know 100%, that vanguard pay either nothing for the underlying, or pay institutional rates at virtuallly zero. I suspect, but don’t know, that keeping them all at 0.22 is just easier to market so they are set up so ensure that’s the case

Incidentally for those interested, I had a meeting with vanguard today and questioned daily rebalancing of the lifestrategy funds because of concerns around transaction costs. I was told that because inflows are large they are able to rebalance without needing to sell anything. Not sure that’ll be the case on the downside.

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Re: Vanguard life strategy tracker

#171433

Postby vrdiver » October 4th, 2018, 3:50 pm

vrdiver wrote:Since the 20, 40, 60, 80 and 100 LS funds all have the same 0.22% charge, I'd be really surprised if they managed to do that whilst investing in different assets in different ratios.

Further to my quote above, I used the site's "contact us" link to ask the question as to whether the OCF was for the LS fund or the total for all the funds that it invested in. This was the response:
The OCF of 0.22% for the LifeStrategy fund range is the total OCF for the fund. Therefore it includes all the OCFs for
underlying funds it is invested in.

I'm impressed.

VRD

Goderich
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Re: Vanguard life strategy tracker

#174736

Postby Goderich » October 18th, 2018, 5:30 pm

Thanks for all the comments.

JohnB
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Re: Vanguard life strategy tracker

#174766

Postby JohnB » October 18th, 2018, 7:28 pm

Which LS did you want? If LS100, then why not have one of their pure trackers, with 0.1% charges. As others have said a LS fund might cost you more broker fees than a straight tracker ETF. Nowt wrong with Vanguard.

StOmer

Re: Vanguard life strategy tracker

#174785

Postby StOmer » October 18th, 2018, 9:23 pm

vrdiver wrote:
vrdiver wrote:Since the 20, 40, 60, 80 and 100 LS funds all have the same 0.22% charge, I'd be really surprised if they managed to do that whilst investing in different assets in different ratios.

Further to my quote above, I used the site's "contact us" link to ask the question as to whether the OCF was for the LS fund or the total for all the funds that it invested in. This was the response:
The OCF of 0.22% for the LifeStrategy fund range is the total OCF for the fund. Therefore it includes all the OCFs for
underlying funds it is invested in.

I'm impressed.

VRD

Often the case with multi manager funds when purchasing funds from the same stable they access these at no cost or very cheaply, no reason why Vaguard with their computer profiling should be any different.


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