Vanguard LifeStrategy index fund

[Ginge R]

It depends how much you've got and what you want, there is no one size fits all option. If you want to do it all yourself, take a look at this.. there's far worse places to start.

http://langcatfinancial.co.uk/white-paper/direct-a...

H-L has been reversing a lot of cost increases recently, it has reminded me of how how Facebook does things. Introduce a shed load of new regs and terms which create uproar, and then publically reverse some of them over time, leaving a core of the ones that they wanted to keep all along. It smacks of either incompetence or cynical exploitation.

[Ginge R]

Ginge R said:

Poorly performing shares are excluded and that depends on the guile of the manager (the Royal London UK All Share tracker has not just tracked, but beaten the benchmark for three years on the spin for this very reason).

Sometimes, even I scare myself; this below, from lunchtime.

<<The best performing FTSE tracker over the six month period – Royal London UK All Share tracker – has returned 2.14 per cent over the period, while the worst – Aviva UK Index Tracking – is almost 2 percentage points behind.>>

Royal London is the name for Scottish Life, a great pension. If you have an adviser, ask him/her if they're at least considering passives (not for everyone, and not all the time of course).

http://www.trustnet.com/News/530007/ftse-trackers-...

[Mr Noble]

Ginge R said:

Trackers can diverge from their intended path, it's referred to as tracking error and depends on many things - such as when the managers track only a non representative selection of shares in the index rather than every single one - that would be pure tracking. It would however, be expensive and contrary to the principle of cheapness.

Many baskets don't include the fastest-growing companies and a lot depends on *how* fund managers will track the underlying assets.

That is most interesting Ginge, and some what worrying. I'd always assumed that the 'trackers' would almost identically match their underlying benchmark funds.


So in my instance - HL SIPP with nearly all of my pension in the Lifestrategy 80 fund, would it be wise to switch half of it out to something like the BR Con85 fund? Or even split into thirds with one third in a semi managed tracker fund?

I guess this would split my potential loss exposure in the worst case of a total company fraud/meltdown too.

Edited by Mr Noble on Wednesday 20th August 18:36

[Ginge R]

Mr Noble said:

That is most interesting Ginge, and some what worrying. I'd always assumed that the 'trackers' would almost identically match their underlying benchmark funds.


So in my instance - HL SIPP with nearly all of my pension in the Lifestrategy 80 fund, would it be wise to switch half of it out to something like the BR Con85 fund? Or even split into thirds with one third in a semi managed tracker fund?

I guess this would split my potential loss exposure in the worst case of a total company fraud/meltdown too.

(we're talking £200k in VG LS80 at the mo) (I spent 2 years rebalancing my own fund before deciding to let VG do it all for me)

Mr N

I couldn't advise you what to do, sorry, you deserve more than soundbites on a messageboard.

But by way of generic information (!) and not specific advice, what you're alluding to can certainly make sense. If you wanted to take a more considered view, if you wanted to see how things panned out over the course of say, a year (a year in which we'll see many factors impacting on investments), then the exercise that you're referring to might be a worthwhile one.

You'll lose if one gains, but time spent in reconnaissance is seldom wasted, especially so if you have a long investment time scale. Sorry I couldn't be of any more help - you seem informed anyway so don't think I'll try to sell you my services, but if you just want more specific info and if I can assist, please don't hesitate to message me.

[Mr Noble]

Thank you for the info Mr G. It is probably a good plan and will at least be a good gauge of wether the different funds and performing as they should.

Cheers!

[Ginge R]

As suggested, Vanguard announces price cuts. Cheap isn't always best, but it's a still a massive factor.

http://www.investmentweek.co.uk/investment-week/ne...

Ginge R said:

I spoke with my Vanguard rep the other week and we spoke of new lower prices soon, in order to compete with Fidelity. Buying and hoarding units when the market is low CAN help you later if you have a long view and expect the market to rise and costs to reduce.

Not for everyone of course so take advice you trust, etc. I like Vanguard - also, Black Rock does a good range of similar funds.