PENSIONS
VANGUARD LIFESTRATEGY
With passive investing on the rise, Gary Jackson looks at a range of indexed funds
that offer exposure to global markets while matching the investor’s risk appetite.
trustnet.com
new, lower risk asset allocation
before manually rebalancing their
portfolio.
When it comes to performance,
the Vanguard LifeStrategy range
stands up relatively well against
its active peers – although past
returns are no guide to future
performance.
Since launch in June 2011,
every one of the five funds has
returned more than its average
peer, with all aside from Vanguard
LifeStrategy 100% Equity sitting in
their sector’s first quintile. In all
cases, these returns have come
with lower annualised volatility
than the average peer.
funds. Investors can buy individual
trackers for less than this, of
course – the Vanguard US Equity
Index fund, for example, has
ongoing charges of 0.10 per cent
– but this would mean the investor
misses out on a key feature of the
LifeStrategy range.
Each of the funds in the
range automatically rebalances
to remain within its set asset
allocation and ensure the investor
is not exposed to more or less risk
than they planned to be.
While there is nothing to stop an
investor doing this on their own
with individual funds, outsourcing
the move prevents them from
making a common mistake –
chasing returns by moving into
and out of the best and worst
performing sectors based upon
recent past performance.
What’s more, investors can
simply switch between funds
within the range as they move
closer to their retirement age,
rather than having to figure out a
MANAGEMENT GROUP: Vanguard
Asset Management
LAUNCH DATE: 23 June 2011
SECTORS: IA Global, Mixed
Investment 40%-85% Shares, Mixed
Investment 20%-60% Shares and
Mixed Investment 0%-35% Shares
OCF: 0.24%
COMBINED ASSETS UNDER
MANAGEMENT: £1.86bn
Performance since launch
60%
Vanguard - LifeStrategy 100% Equity (50.60%)
50%
Vanguard - LifeStrategy 60% Equity (42.51%)
40%
Vanguard - LifeStrategy 20% Equity (32.51%)
30%
20%
10%
0%
-10%
Apr
Jan 15
Oct
Jul
Apr
Jan 14
Oct
Jul
Apr
Jan 13
Oct
Apr
Apr
Jan 12
Oct
-20%
Jul 11
P
assive investments have
grown in popularity over
recent years and many
experts expect this trend to
strengthen as investors b X