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Vanguard life strategy tracker
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Vanguard life strategy tracker
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
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
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- Lemon Quarter
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Re: Vanguard life strategy tracker
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
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
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- Lemon Half
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Re: Vanguard life strategy tracker
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
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
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- Lemon Pip
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Re: Vanguard life strategy tracker
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
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- Lemon Quarter
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Re: Vanguard life strategy tracker
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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- Lemon Pip
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Re: Vanguard life strategy tracker
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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- Lemon Quarter
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Re: Vanguard life strategy tracker
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
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- Lemon Quarter
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Re: Vanguard life strategy tracker
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.
Re: Vanguard life strategy tracker
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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