Vanguar Investment Tips

[Guvernator]

I started an ISA through Vanguard on the advice of some peeps on here, however the two funds I'm invested in seem to be going nowhere, in fact I'm in the negative.

The two I'm invested in are

FTSE Developed Europe ex UK UCITS ETF (Verx)
FTSE 100 UCITS ETF (VUKE)

So is this just reflecting a general downturn in the market or are these funds just doing particarly badly? I'm tempted to think the latter as my pension is up 12% this year so there are funds out there making a decent return.

If that's the case, can anyone recommend any other funds on Vanguard that are doing better?
Is there any way to easily check performance of other funds on that platform?

I could just leave it but I like to be a bit more proactive and actually have my funds in something that will make a bit of money rather than losing it.

[Orchid1]

I'd probably stick it all in a Vanguard Lifestrategy fund (either 40/60/80 depending on your attitude to risk) as it's a fund of funds so your money will be spread more evenly.

[jeff m2]

How long ?

Europe is not a bad place to have money, reasonable P/E ratios.
FTSE 100, as you are probably aware UK has its problems, but the 100 has foreign listings so can be a bit dependent on the exchange rate.

I'd stick with it, but possibly put any future contributions in a global fund while the Pound is still at 1.4.

[Mezger]

jeff m2 said:

How long ?

Europe is not a bad place to have money, reasonable P/E ratios.
FTSE 100, as you are probably aware UK has its problems, but the 100 has foreign listings so can be a bit dependent on the exchange rate.

I'd stick with it, but possibly put any future contributions in a global fund while the Pound is still at 1.4.

Hi Jeff, What's the correlation you're making with sterling at 1.4 and global funds?

[Guvernator]

It's been in just over a year and I'm looking at adding regular monthly amounts to it and cashing out in about 15 years. It's sort of ear marked as a University fund for my daughter. I was getting bugger all interest with it sat in a savings account so thought a relatively low-medium risk fund would give me at least 3-4% per annum but compared to some of my other investments over the last year, it seems to be doing really badly.

I know the UK market is a bit shaky but a negative return seems very poor to me.

[anonymous-user]

Guvernator said:

I started an ISA through Vanguard on the advice of some peeps on here, however the two funds I'm invested in seem to be going nowhere, in fact I'm in the negative.

The two I'm invested in are

FTSE Developed Europe ex UK UCITS ETF (Verx)
FTSE 100 UCITS ETF (VUKE)

So is this just reflecting a general downturn in the market or are these funds just doing particarly badly? I'm tempted to think the latter as my pension is up 12% this year so there are funds out there making a decent return.

If that's the case, can anyone recommend any other funds on Vanguard that are doing better?
Is there any way to easily check performance of other funds on that platform?

I could just leave it but I like to be a bit more proactive and actually have my funds in something that will make a bit of money rather than losing it.

Edited - questions answered

I use started to use Vanguard December 2017 and hold;

LifeStrategy® 80% Equity Fund - Accumulation - Average unit cost £189.10 - Last unit price £190.44

FTSE Developed Asia Pacific ex Japan UCITS ETF (VAPX) - Average unit cost £19.23 - Last unit price £20.00

FTSE Emerging Markets UCITS ETF (VFEM) - Average Unit cost £45.78 - Last unit price £47.48

I have only been in these the last 3 months, bought in on a high and all were down a few weeks ago but now back up, especially emerging markets.

I will be using the money in 18 years time, at the age of 48 for a kind of early retirement, if all goes to plan.

Edited by anonymous-user on Tuesday 27th February 14:04

[anonymous-user]

Your funds are not doing badly;

VUKE - 01 Feb 2017 to 31 Jan 2018 - 10.25%
VERX - 01 Feb 2017 to 31 Jan 2018 - 15.04%

It will come down to the timing of your 'buys'. See the graphs in the links.

General consensus is you cannot time the market, but you certainly can buy more when the fund is down which will bring your average unit costs down and increase your chances of profit at the end.

I know people will say 'but how do you know it won't drop further' the answer is you do not, but if you were willing to buy 10 units at x one month, why not but 30 units at x-50? That's just my way of thinking.

Sources
https://www.vanguardinvestor.co.uk/investments/van...

https://www.vanguardinvestor.co.uk/investments/van...

[jeff m2]

Mezger said:

jeff m2 said:

How long ?

Europe is not a bad place to have money, reasonable P/E ratios.
FTSE 100, as you are probably aware UK has its problems, but the 100 has foreign listings so can be a bit dependent on the exchange rate.

I'd stick with it, but possibly put any future contributions in a global fund while the Pound is still at 1.4.

Hi Jeff, What's the correlation you're making with sterling at 1.4 and global funds?

Well....., the Pound is relatively strong compared with recent levels so you get "more foreign crap" per Pound than if it were 1.25 (to the Dollar)

That is not to say the Pound could not gain, but I don't really see 1.6 anytime soon, it'd be nice but just not gonna happen. (famous last words)

[bitchstewie]

Why only Europe and the UK?

[Guvernator]

bhstewie said:

Why only Europe and the UK?

Dunno, it's not something I puzzled over too much or had time for, I just went on some recommendations. It's not an investment I'm expecting to get market busting returns on. I just want to leave it and check on it once every 6 months, so semi-passive but hopefully get a bit better return than crappy bank savings rates. I'd probably be happy with a percent or two above inflation.

[bitchstewie]

Guvernator said:

Dunno, it's not something I puzzled over too much or had time for, I just went on some recommendations. It's not an investment I'm expecting to get market busting returns on. I just want to leave it and check on it once every 6 months, so semi-passive but hopefully get a bit better return than crappy bank savings rates. I'd probably be happy with a percent or two above inflation.

My personal view (and I say this as a total novice myself) is go global.

Passive v active is always a debate, I thought I'd go passive but as it is I've jumped in and gone active.

I wouldn't want to be entirely in the UK and Europe simply because they're such a small part of the world market and I don't understand the French or Dutch markets any more or less than I do the US or Japanese markets.

[rdjohn]

Guvernator said:

It's been in just over a year and I'm looking at adding regular monthly amounts to it and cashing out in about 15 years. It's sort of ear marked as a University fund for my daughter. I was getting bugger all interest with it sat in a savings account so thought a relatively low-medium risk fund would give me at least 3-4% per annum but compared to some of my other investments over the last year, it seems to be doing really badly.

I know the UK market is a bit shaky but a negative return seems very poor to me.

So, you are investing long term, but thinking short-term.

A lot will happen during the next 15 years. It’s a bit like buying a house because you need a roof over your head and then worrying about the possibility of negative equity when you can afford the repayments.

You need a capital sum in 15-years. Equities generally a good way to achieve that. The management costs of Vanguard are likely to be beneficial to achieving that objective.

If the funds you are in concern you right now, then switch to a LifeStrategy funds, like others have suggested.

[Guvernator]

rdjohn said:

So, you are investing long term, but thinking short-term.

A lot will happen during the next 15 years. It’s a bit like buying a house because you need a roof over your head and then worrying about the possibility of negative equity when you can afford the repayments.

You need a capital sum in 15-years. Equities generally a good way to achieve that. The management costs of Vanguard are likely to be beneficial to achieving that objective.

If the funds you are in concern you right now, then switch to a LifeStrategy funds, like others have suggested.

My concern was more around the fact that other funds I've invested in have done really well, yet these haven't over the exact same time period. For example I have an actively managed pension fund, they review every quarter and drop funds that under-perform, it might sound like short time lines to keep chopping and changing but it seems to be a strategy that works as they've returned me 12% over the same period.

I'm obviously not going to be changing so frequently but if you don't review things at least once a year, you can easily end up with funds that under-perform year after year and before you know it, you have way less money then you put it. I know lots of people whose pensions have done exactly that because they haven't bothered to review and make changes, I don't want to be another one.