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Vanguard LifeStrategy 60 v L & G Multi-asset 5

Index tracking funds and ETFs
EricLightbulb
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Vanguard LifeStrategy 60 v L & G Multi-asset 5

#232173

Postby EricLightbulb » June 26th, 2019, 2:20 pm

Just looking at these two funds for a SIPP.

https://www.hl.co.uk/funds/fund-discoun ... cumulation

https://www.hl.co.uk/funds/fund-discoun ... cumulation

My thinking is to invest in these each year and take regular drawdowns.

I'd be grateful if someone could explain why there is a spread on the L & G fund, but not on the Vanguard.

Is it really possible to buy into and sell the Vanguard fund with no costs at all?

Thanks

jonesa1
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Re: Vanguard LifeStrategy 60 v L & G Multi-asset 5

#232175

Postby jonesa1 » June 26th, 2019, 2:25 pm

The L&G fund is a unit trust, which have a spread between buying and selling prices, the Vanguard fund is an OEIC which have a single price.

https://www.sharesmagazine.co.uk/article/investing-in-funds-whats-the-difference-between-a-unit-trust-and-oeic

tikunetih
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Re: Vanguard LifeStrategy 60 v L & G Multi-asset 5

#232187

Postby tikunetih » June 26th, 2019, 3:55 pm

The two funds you mention are slightly apart on the risk/volatility spectrum, which I'm assuming was intentional(?), else otherwise L&G MI 6 is more akin to Vanguard LS60 than is L& MI 5.

Anyway, if considering these funds, I'd also kick the tyres of the HSBC's Global Strategy range...

"Similar" to Vanguard LS60 is: HSBC Global Strategy Balanced Portfolio
@HL: https://www.hl.co.uk/funds/fund-discoun ... cumulation
@Trustnet: https://www.trustnet.com/factsheets/o/g ... olio-c-acc

*Similar" to L&G Multi-Index 5 is: HSBC Global Strategy Conservative Portfolio
@Trustnet: https://www.trustnet.com/factsheets/o/o ... olio-c-acc
NB this fund is relatively new and apparently not currently carried by HL, but they carry the rest of the HSBC Glb Strat range so would probably add it.


These HSBC funds do not have the UK "home bias" of the Vanguard and L&G funds. You may want that or you may not, although the trend generally is away from much/any home bias.

While Vanguard LS has fixed allocations to its asset classes, and sits in the IA's "Mixed Investment 40-85% Shares" sector, both L&G MI and HSBC Glbl Strat are so-called "outcome-based" and sit in the IA Volatility Managed sector. The upshot of this is that the managers of the latter two will attempt to adjust portfolio allocations in order to keep their funds broadly within an intended risk (volatility) band. Again, this may or may not appeal. And if it does appeal, it may give worse, not better long term results, than Vanguard's fixed allocation approach. Only time will tell.

None of these funds are wholly "passive", but the Vanguard LS range is arguably slightly more passive. But they're all still fairly passive, using largely mkt cap index funds to construct their portfolios from, and with low activity, hence the resultant low costs, which is key.

No clear answers, just alternatives and choices!


Comparing HSBC Glbl Strat to L&G MI, the former has no home bias and is a bit cheaper, so would probably be my preference of the two.

Comparing HSBC Glbl Strat to Vanguard LS, the former has no home bias and is volatility targeted, while Vanguard LS has home bias and fixed asset allocations. HSBC is very marginally cheaper. Choose whichever approach intuitively appeals more such that you could stick with it more easily through a deep market downturn.

As mentioned, these are all low-cost fund choices; if buying on HL's platform then the highest fees you'll be paying will be to HL in the form of their platform cost. So, consider buying them elsewhere - somewhere cheaper - if that's feasible for you. If not, and you do use HL, then at least you'll have cut your costs compared to many other fund choices you could make.

PhaseThree
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Re: Vanguard LifeStrategy 60 v L & G Multi-asset 5

#232198

Postby PhaseThree » June 26th, 2019, 6:02 pm

Are there any similar funds available as either ETF or investment trusts ?
This would help avoid the majority of platform costs.

todthedog
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Re: Vanguard LifeStrategy 60 v L & G Multi-asset 5

#232276

Postby todthedog » June 27th, 2019, 8:57 am


EricLightbulb
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Re: Vanguard LifeStrategy 60 v L & G Multi-asset 5

#232360

Postby EricLightbulb » June 27th, 2019, 4:24 pm

Thanks for the replies and links. I have been looking into the funds with increased knowledge. I understand the OEIC pricing a bit better and have read Monevator - and am certainly considering HSBC now.

Looking at Vanguard LifeStrategy, I notice the xd date is 3rd April 2020. If my intention was to buy Vanguard now and make a withdraw from my SIPP just prior to the end of the current tax year, would it be possible for me to, sell Vanguard on 3rd April (to ensure I get the dividend) and then withdraw funds from HL (or whoever) before the end of the tax year?

Is it too much to expect the holding to be sold, and a SIPP withdrawal processed before 5th April - bearing in mind it is the weekend!

And, would it make any difference to have the Income or Accumulation units with regard to this idea?

Am I worrying too much about getting the dividend, as the unit price should adjust around the time of going xd?

Thanks

Alaric
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Re: Vanguard LifeStrategy 60 v L & G Multi-asset 5

#232401

Postby Alaric » June 27th, 2019, 8:18 pm

EricLightbulb wrote:
Is it too much to expect the holding to be sold, and a SIPP withdrawal processed before 5th April - bearing in mind it is the weekend!


You would have to check your Broker's settlement timetable, but typically you wait for a day or several to get the proceeds of an OEIC sale credited.

The price should adjust for the xd change anyway and in the SIPP there's no tax arbitrage available.

runnygum
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Re: Vanguard LifeStrategy 60 v L & G Multi-asset 5

#234094

Postby runnygum » July 5th, 2019, 4:14 am

PhaseThree wrote:Are there any similar funds available as either ETF or investment trusts ?
This would help avoid the majority of platform costs.


+1 this is what I would do.

VWRL (Global Equity) + AGGG (Global Bonds) or similar in the proportions you are interested in.
(60/40 would be 0.25 x 60% + 0.10 x 40% = 0.19% OCF)

All done, zero holding costs on most platforms (as opposed to rip off platform charges for funds)

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Re: Vanguard LifeStrategy 60 v L & G Multi-asset 5

#266262

Postby mjcross1 » November 22nd, 2019, 11:55 am

On the bonds side, just be sure to read the KIDD and other docs to understand what you're getting. In particular you need to know the weighted average duration and the quality of the underlying bonds.

Watch out, because in the interests of cranking up yields some funds are developing a slightly liberal interpretation of what 'investment quality' means...

Bond funds can certainly be a bit bewildering at first. For what it's worth I found the free "Killik explains" videos https://www.killik.com/learn/#topic=bonds invaluable to get my head around them.


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