Author Topic: Vanguard funds  (Read 2179 times)

Vanguard funds
« on: 03 July, 2017, 12:58:07 pm »
Hello, looking for a  savings vehicle over the next 5-10  years

What are the  views on the Vanguard funds - big on low fees etc and better  returns. Are they that  good?

Re: Vanguard funds
« Reply #1 on: 03 July, 2017, 09:03:53 pm »
Is it the Lifestyle funds that you are looking at? They are passive funds in that they attenpt to track the market. Charges tend to be lower with passive funds as opposed to active funds where you are paying someone to manage the funds and attempt to beat the market.

I opened mine VLS account a few years ago with Hargreaves Landsdown. Vanguard have just started to offer them direct so I'm moving to them. Vanguard fee is 0.15% vs. 0.45% with HL.

Re: Vanguard funds
« Reply #2 on: 04 July, 2017, 11:13:07 pm »
That's the  fund or  funds....

Vernon

  • zzzZZZzzz
Re: Vanguard funds
« Reply #3 on: 05 July, 2017, 08:48:12 am »
Vanguard are a mutually owned fund that specialise in index tracking investments. Because they are owned by the investors, they work to minimise the cost of running the funds (so don't pay out in commission, advertising etc). They are massive (about $4 Trillion in investor assets IIRC). As a result they are unlikely to go bust any time soon.
If you're looking to invest in index-trackers (S&P, FTSE, world, or one of their blended products, such as the LifeTrackers), they are about as safe an investment as you can get. If you're paranoid about the fund manager going bust, then you are covered up to £50,000 by the FSCS compensation scheme per institution so it may be prudent to spread investments amongst two or more investment brokers/funds if you've got more than this.
If you're not aware of it, monevator.com is a good source of UK-based information.
Disclosure: I am not an IFA (so this advice is worth what you paid for it), and I have invested in Vanguard LifeStrategy.

Re: Vanguard funds
« Reply #4 on: 05 July, 2017, 08:45:54 pm »
big on low fees etc and better  returns.

Yes to low fees, some of the funds are very cheap to invest in. Not necessarily to "better returns".

As other people have said, Vanguard specialise in tracker funds which means that the returns are dependent on the behaviour of the index that the fund is supposed to track i.e. a FTSE tracker will not make money for you if FTSE loses money. Vanguard are also one of the biggest and have a good reputation.

Whether that means you do better than other funds depends what you mean by "better"  ;)  Possibly you get worse returns than actively managed funds (some actively managed funds do very well) but the average actively managed fund might not be any better (and the fees may be substantial e.g. 2% is not uncommon).

[I am not an IFA, this advice is worth what you paid for it.]


Re: Vanguard funds
« Reply #5 on: 05 July, 2017, 10:19:49 pm »
Thanks , your  disclosures are noted.

Re: Vanguard funds
« Reply #6 on: 08 July, 2017, 05:02:11 pm »
Really savings vehicles should be chosen with regard to the use of the savings as well as time frame.  Some kind of risk assessment should be involved.  And of course it's also wise to diversify and not have the whole shebang invested in one place. 

My savings are in bonds and cash isas, European and other funds managed by a life assurer, and shares that I pick which have varying degrees of risk/reward, some are so stable they are effectively trackers with a modest dividend on top.  I am a long term shareholder.  And of course I have bricks and mortar, FWIW.
Move Faster and Bake Things

Adam

  • It'll soon be summer
    • Charity ride Durness to Dover 18-25th June 2011
Re: Vanguard funds
« Reply #7 on: 10 July, 2017, 11:21:16 pm »
If you're happy with the specific fund (a range of equity content from 20% to 100%)  and the level of risk, then bearing in mind the LifeStrategy funds hold around 18,000 individual companies, then you're getting a true whole market return at just about the lowest cost. 

Bearing in mind the inconsistent performance of active funds, coupled with the disclosed and undisclosed costs, then it's not surprising that even the FCA are starting to query how expensive funds can justify their existence.

https://www.ft.com/content/be8bcf40-5bf2-11e7-b553-e2df1b0c3220?mhq5j=e3
“Life is like riding a bicycle. To keep your balance you must keep moving.” -Albert Einstein

Re: Vanguard funds
« Reply #8 on: 13 July, 2017, 06:22:35 am »
Time  frame is 5  to  15 years, with  reviews  every 5 years.

Investments at present are bricks, NHS Pension that pays out in 5 years, and a bundle of shares  doing nothing much.

Shares  will be sold and moved into the  fund which  will  be topped  up monthly...

Adam

  • It'll soon be summer
    • Charity ride Durness to Dover 18-25th June 2011
Re: Vanguard funds
« Reply #9 on: 13 July, 2017, 05:55:44 pm »
Provided you're able to accept you'll get whatever the market return is, be it negative or positive.  So if say in 5 years time when the market is down when we're in the depths of another financial crash, you can afford to stay invested on the assumption things will recover over your time frame.

So it's a question of assessing the level of risk you can take and can afford to take, to arrive at the equity content.


“Life is like riding a bicycle. To keep your balance you must keep moving.” -Albert Einstein

Re: Vanguard funds
« Reply #10 on: 13 July, 2017, 09:17:21 pm »
That is the  point.

Can't be any worse than my endowment policy from the late 80s...