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Old 20 Mar 21, 06:28 PM  
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#10
Tweety1
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Join Date: Mar 14
Originally Posted by tspill View Post
Not a stupid question.

Vanguard Life Strategy in its various risk guises is a set of funds. It is globally and sector diversified - this is good. All these multi asset funds have some management decisions made when they were set up. Vanguard chose to have what is called a home bias - i.e. they have 25% of their stock in UK companies when the UK is about 7% of the global economy. This is good or bad depending on your perspective. For me it is good as it reduces inflation and currency risk for foreign investments. This is what I use.
This is an investment.

SIPPs and ISAs and NOT investments. They are tax wrappers that offer different tax advantages. They are like the boxes that you put your investments into.

So you can purchase a VLS fund within either a SIPP or an ISA - or indeed outside an tax wrapper in a GIA (General Investment Account).

If you are going down the VLS route, there are five risk options. VLS 100 (100% equities) - considers the higher risk; down to VLS 20 (20% equities) - considered the lower risk. There are VLS 80, 40 & 40 in-between. This is the big choice you need to make depending on your age, timeframe and tolerance to risk. The remain %age is invested in bonds/gilts which have traditionally been considered less risky than equities.

To make things a little more complicated - each of these five options also has two options - Income units or Accumulation units. Income will pay you the dividends. Accumulation will reinvest your dividends. So this depends if you want your investment to grow more (Acc) or whether you want the dividends out as cash (Inc).

You also need to decide which platform to host them on. I use a combination of Charles Stanley Direct, iWeb, Vanguard and Aegon. The difference is generally the fees they charge.

My current favourite is iWeb (owned by Halifax) as their charges are a one off fee of £100. Plus £5 to buy the fund. There are no monthly charges. So it is cheap.
Others charge a %age. CSG charge 0.35%; Interactive Investor charge £10/month; Vanguard charge 0.13%; Hargreaves Langsdown charge 0.4%. But check these as I am doing this from memory)

There is also a fee for the fund. VLS charge 0.22%.

Hope this explains some of this.

OP. I see you saying you don't want to make choices. Unfortunately that is not possible. No matter what you do here - you will be making a choice in one way or another. You cant avoid making a choice.

Personally, for the most part, I now use a combination of -
Vanguard Life Strategy 40
Vanguard Life Strategy 80
Vanguard Developed World exc. UK (all equities and no UK - to slightly offset the UK home bias of VLS - while I like some home bias, 25% is a bit much for me).

Other companies other than Vanguard that do multi asset funds (HSBS, Blackrock, Fidelity etc.). They all have slightly different management decisions for their investment strategy. I personally chose Vanguard as i think is is the closest to a passive investment fund.
I knew there would be ppl in here that get this
So what is the difference between the life strategy and the retirement fund? Is there any? Trying to utilise the tax advantage you get with a pension...
Have you had any issues with vanguard? I’ve just read a few negative reviews but it was only the top view and mainly how long they take to process requests the rest of the reviews were great!
Thank you for your detailed response as it is becoming clearer to understand(I think) so any other information is always welcome
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Edited at 06:31 PM.
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