Invest and forget - best approach?
Discussion
I have a family member who wants to start investing in ISA with a view to medium/long term investment returns with minimal "care an attention" along the way. My own approach has always been a lot more "hands on".
Index funds might be a good starting point for them and clearly "lowest fees and charges" will be beneficial.
What's the best way to achieve this?
On here the name Vanguard is heard a lot. So taking Vanguard as a starting point, what fund or combination of funds is seen as establishing a solid foundation for growth? And are there alternatives to Vanguard which should also be considered?
Index funds might be a good starting point for them and clearly "lowest fees and charges" will be beneficial.
What's the best way to achieve this?
On here the name Vanguard is heard a lot. So taking Vanguard as a starting point, what fund or combination of funds is seen as establishing a solid foundation for growth? And are there alternatives to Vanguard which should also be considered?
I'd start off by trying to gauge their appetite for volatility.
It could be as simple as a cheap global tracker but if not then with Vanguard I'd start by looking at the LifeStrategy series.
They do have a UK bias which is something to be aware of.
One of the things I tend to perceive on here is that a lot of people give the impression that investing is "equities or cash" whilst LifeStrategy are fixed allocations between equities and bonds.
You could look at something like HSBC GlobalStrategy or L&G Multi-Index which are more around being targeted at a risk level so the asset allocations will change around.
Or look at the Intelligent Money threads as they may be a reasonable compromise between not wanting to go full-on DIY but not wanting 1-2% disappearing on fees every year.
It could be as simple as a cheap global tracker but if not then with Vanguard I'd start by looking at the LifeStrategy series.
They do have a UK bias which is something to be aware of.
One of the things I tend to perceive on here is that a lot of people give the impression that investing is "equities or cash" whilst LifeStrategy are fixed allocations between equities and bonds.
You could look at something like HSBC GlobalStrategy or L&G Multi-Index which are more around being targeted at a risk level so the asset allocations will change around.
Or look at the Intelligent Money threads as they may be a reasonable compromise between not wanting to go full-on DIY but not wanting 1-2% disappearing on fees every year.
Countdown said:
I'd suggest that the easiest "Invest'n'Forget" is to stick it all in Vanguard VWRL
I googled VWRL to find out what it's all about, not being in my own mainsteam,"FTSE All-World Index (the “Index”). The Index is comprised of large and mid-sized company stocks in developed and emerging markets.
"The Fund attempts to: 1. Track the performance of the Index by investing in a representative sample of Index constituent securities. 2. Remain fully invested except in extraordinary market, political or similar conditions.
"The index measures the market performance of large- and mid-capitalisation stocks of companies located around the world. Includes approximately 3,900 holdings in nearly 50 countries, including both developed and emerging markets. Covers more than 95% of the global investable market capitalisation."
Yes, sounds an interesting one. Thanks for that.
Phooey said:
No offence and not meaning to be smart, but from reading your many posts in this forum giving sound (investing) advice neatly laid out using bullet points.. I am not sure if this is a wind up. Have you fell over and banged your head, rockin? 
Well, happily not.The approach is just so different from I what I do myself that I'm interested to get guidance from others who've tried it. This is genuinely for a family member who I won't be supervising but to whom I'm saying, "Just start an S&S ISA and let it run. It doesn't have to take up a lot of time and attention and you shouldn't be worrying about the risk."
b
hstewie said:
hstewie said: with Vanguard I'd start by looking at the LifeStrategy series.
Thanks. I've noticed those and expected anything with a name like that to be increasing the bond mix as the investor approaches a chosen retirement age. Maybe that's "lifestyling" or whatever. A look at the Vanguard website suggests it's another interesting suggestion - thanks. Especially with low, low costs at 0.22%. As it's a fund of funds I'll need to check whether there's two levels of charges, doubling-up the fees.
For growth, a large chunk of my portfolio is invested in Vanguard FTSE Global All Cap Index Fund Acc (Good global Eq market representation) which is fully hedged against Vanguard Global Bond Index Fund (Good global coverage backed by short/medium dated high quality Govt and IG bonds). Its likely I am on a different life cycle to your family member, so they may accept more risk and adjust the bond hedge % as required.
Op - we are probably at polar opposite ends of investment style in that while you may tinker and have a more complex portfolio I currently follow a fairly simple 'fire and forget' strategy, drip feeding a VLS100 monthly using a Vanguard S&S ISA...it just does the job for me with minimal thought needed after picking the fund I wanted. It's fairly cheap overall though depending on how much you have have invested a different platform might be cheaper e.g: % fees Vs fixed fees. Yes the VLS is a bit heavy on the UK and yes we have impending Brexit volatility to consider but in a globally diverse portfolio or fund not sure I want to be excluding a specific market.
- I posted a thread about ETF's in which you provided input (cheers for that)...not so much to diversify my VLS 100 as I'm comfortable with 100% equities but more so that in my S&S LISA I want to minimise ongoing costs hence one of the reasons I am considering ETF's.
Vanguard is solid enough, and super low cost, of course.
I guess I am a bit of a fan of the IM options, & the availability of a wise & friendly voice to speak with, alongside zero pressure to buy anything!
We helped our young 20s offspring set up some regular savings.
A pension with IM, with a 50:50 split between an index option (similar to the Vanguard LS100) and the PH Equity fund.
If I was just aiming for one place, I would probably replicate that - the index giving a decent home of 'lower cost passive' plus some decent growth possibilities in the latter.
That said, we also wanted to encourage them to have something in LISAs (which IM didn't offer), & went with an AJ Bell offering.
Finally, they also have a regular ISA with Vanguard (set up before we discovered IM....& continued, just for a "spread of bets"
I guess I am a bit of a fan of the IM options, & the availability of a wise & friendly voice to speak with, alongside zero pressure to buy anything!
We helped our young 20s offspring set up some regular savings.
A pension with IM, with a 50:50 split between an index option (similar to the Vanguard LS100) and the PH Equity fund.
If I was just aiming for one place, I would probably replicate that - the index giving a decent home of 'lower cost passive' plus some decent growth possibilities in the latter.
That said, we also wanted to encourage them to have something in LISAs (which IM didn't offer), & went with an AJ Bell offering.
Finally, they also have a regular ISA with Vanguard (set up before we discovered IM....& continued, just for a "spread of bets"
I’ll add two things:
The Vanguard Lifestrategy funds will NOT automatically change your portfolio as you reach retirement age. Only their target retirement funds do that.
The life strategy funds do have a UK bias, which will not be for everyone.
The flip side is that a larger part of the portfolio is invested In domestic currency and therefore has removed FX risk / volatility (on that part of the portfolio)
Total return = ( investment performance + currency performance ) - costs
It’s swings and roundabouts
The Vanguard Lifestrategy funds will NOT automatically change your portfolio as you reach retirement age. Only their target retirement funds do that.
The life strategy funds do have a UK bias, which will not be for everyone.
The flip side is that a larger part of the portfolio is invested In domestic currency and therefore has removed FX risk / volatility (on that part of the portfolio)
Total return = ( investment performance + currency performance ) - costs
It’s swings and roundabouts
The Mad Monk said:
Will someone put me out of my misery?
VWRL? What do the letters stand for?
It's the stock exchange ticker so it doesn't necessarily stand for anything directly.VWRL? What do the letters stand for?
https://www.vanguardinvestor.co.uk/investments/van...
rockin said:
Thanks. I've noticed those and expected anything with a name like that to be increasing the bond mix as the investor approaches a chosen retirement age. Maybe that's "lifestyling" or whatever.
A look at the Vanguard website suggests it's another interesting suggestion - thanks. Especially with low, low costs at 0.22%. As it's a fund of funds I'll need to check whether there's two levels of charges, doubling-up the fees.
As said the lifestrategy range don't change their allocations they stay fixed come hell or high water.A look at the Vanguard website suggests it's another interesting suggestion - thanks. Especially with low, low costs at 0.22%. As it's a fund of funds I'll need to check whether there's two levels of charges, doubling-up the fees.
For that the Vanguard product is the Target Retirement Fund range.
Vanguard do list all their fees but they're basically as cheap as chips.
One thing to perhaps keep in mind is how much do you want to be on the hook for this?
Nobody wants to fall out with family over money but if you did and it got nasty how comfortably are you with "well he told me to do it" being thrown around?
Vanguard are a pretty good option to keep you safe if that sort of situation was ever to come up I think.
chip* said:
Vanguard FTSE Global All Cap Index Fund Acc (Good global Eq market representation)
This is what I use for medium/long term. It's probably as close as you can get to fully exposed to global equity markets. That is reflected in the fees which, at 0.26% are higher than most index trackers.
"The Fund seeks to track the performance of the FTSE Global All Cap Index (the “Index”).
The Fund is a passive fund.
The Index is comprised of large, mid-sized and small company shares in developed and emerging markets around the world. Emerging markets are countries that are progressing toward becoming advanced, usually shown by some development in financial markets, the existence of some form of stock exchange and a regulatory body."
LeoSayer said:
chip* said:
Vanguard FTSE Global All Cap Index Fund Acc (Good global Eq market representation)
This is what I use for medium/long term. It's probably as close as you can get to fully exposed to global equity markets. That is reflected in the fees which, at 0.26% are higher than most index trackers.
"The Fund seeks to track the performance of the FTSE Global All Cap Index (the “Index”).
The Fund is a passive fund.
The Index is comprised of large, mid-sized and small company shares in developed and emerging markets around the world. Emerging markets are countries that are progressing toward becoming advanced, usually shown by some development in financial markets, the existence of some form of stock exchange and a regulatory body."
Global Eq coverage fund managed by a reputable and financially strong institution, and all for 0.30% (fund fee 0.23%, transaction cost 0.07%) if purchased on a cost free platform such as iWeb.
Edited by chip* on Sunday 6th December 09:38
rockin said:
Well, happily not.
The approach is just so different from I what I do myself that I'm interested to get guidance from others who've tried it. This is genuinely for a family member who I won't be supervising but to whom I'm saying, "Just start an S&S ISA and let it run. It doesn't have to take up a lot of time and attention and you shouldn't be worrying about the risk."
Understood. Between me and the missus we have a VG ISA each and an IM ISA. I am happy with both. The approach is just so different from I what I do myself that I'm interested to get guidance from others who've tried it. This is genuinely for a family member who I won't be supervising but to whom I'm saying, "Just start an S&S ISA and let it run. It doesn't have to take up a lot of time and attention and you shouldn't be worrying about the risk."
Just a point re "just start an ISA and let it run" and people recommending VWRL - think about reinvesting dividends. VWRL dividends are not automatically reinvested so your relative will need to manually do this. Maybe look at FTSE Global All-cap.
bhstewie said:
hstewie said: One thing to perhaps keep in mind is how much do you want to be on the hook for this?
That's exactly the point. I can't say "do it the way I do it" and neither can I realistically say "haven't a clue". Hence the attraction of a bare-bones approach which should still, with a bit of luck, do massively better than someone putting cash in an ISA and without some sort of advisor taking a large and unnecessary slice of pie..All the suggestions in this thread are very helpful. Thanks.
rockin said:
That's exactly the point. I can't say "do it the way I do it" and neither can I realistically say "haven't a clue". Hence the attraction of a bare-bones approach which should still, with a bit of luck, do massively better than someone putting cash in an ISA and without some sort of advisor taking a large and unnecessary slice of pie..
They will need to understand that you are giving your help in good faith and with the best of intentions based on what you believe is a sufficient level of expertise, experience and knowledge of their circumstances. The caveat is that you are not a qualified IFA and so you haven't done all the KYC and Suitability assessments that an IFA would do.If they're not willing to accept the risks associated to this then you can point them towards www.unbiased.co.uk.
One thing that hasn't been discussed here is what to do if they plan to drawing on the funds within 5 years.
Gassing Station | Finance | Top of Page | What's New | My Stuff