Platforms & Pensions
As much as I hate to spoil your enjoyment , fund charges remain the most critical element in extracting the maximum value from your investments
Vanguard LifeStrategy 80 % Equity . Although similarly popular , Fundsmith Equity ’ s OCF of 1.04 % is almost five times as much as Vanguard ’ s LifeStrategy 80 % Equity ’ s figure of 0.22 %. If I put my notional £ 500,000 pension portfolio into one of these funds for the next 15 years ( assuming they both grow at 5 % per annum ), the projected cost figures are shocking . The cost of investing in Fundsmith Equity is £ 149,543.48 , compared with £ 33,712.12 for Vanguard
LifeStrategy 80 % – that ’ s a difference of £ 115,831.36 . Yes , I hear you cry , but what about performance ? Terry Smith , the manager of Fundsmith Equity , is a genius and has made us lots of money in the past . And that is absolutely true . Some active managers have delivered superior returns over the long term . But many haven ’ t , and picking the right manager before they outperform is something of a lottery . Let ’ s look at past performance . To
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