Vanguard Index Funds - anyone with experience of the best performers?

[wavyneighbour]

Following the Woodford meltdown, and feeling sore as one of the fed- up victims of the uncomfortably complicit Hargreaves Lansdown platform too, I'm now feeling highly risk-averse and seriously considering not only switching platforms, but also moving out of all the fancy costly funds HL advised me to buy (many of which seem to be lacklustre performers) into mostly index trackers.

I'm hearing positive noises about Vanguard, and just wonder who has been investing in any of their funds for a while? I've no experience of trackers as yet, but hear the charges are much lower and they often end up doing just as well. It's high time my humble investments stopped enriching affluent and often incompetent City boys like Woodford and began growing more safely. Sincere thanks in advance if anyone can share personal experience here on the best trackers.

Op I don't know but my DH is adamant these types of funds are safer. .

It's hard when powers that be want to be fuddle us with stats Etc.

Google. Listen to podcasts. Read finances of papers, daily mail money is v v good and cross reference with on line places like morning star.

I've been investing with Vanguard for 30 years. They are a fabulous investment company with great integrity and customer service.

Index tracking funds are indeed the way to go and are safer than actively managed funds. They also operate with much lower expenses, which means you get higher returns.

I'm in the US and have been in their S&P 500 fund for ages, along with one that includes smaller companies. Morningstar is an independent service that analyzes mutual funds and EFT's:

tools.morningstar.co.uk/uk/etfquickrank/default.aspx?Site=UK&Universe=ETALL%24%24ALL&search=vanguard&LanguageId=en-GB

This also looks like a good source of information:

moneytothemasses.com/saving-for-your-future/investing/vanguard-investor-uk-review-is-it-the-best-in-the-market

You cannot go wrong with Vanguard. They invented the index fund and are owned by their investors.

@MissConductUS

Which vanguard funds through.

I thought for instance FTSE 100 tracker encompasses all shares/companies in FTSE 100. However, it seems there's different % in shell, diago Etc.

@Burpsandrustles The Vanguard website won't show me a list of the funds they offer in the UK, presumably because they know I'm accessing the site from the US.

An FTSE 100 tracker fund will have all of the companies in the index, but not in equal amounts. The shares are weighted by market capitalization, which is the price per share times the number of shares outstanding. This way larger companies have proportionally greater investment than smaller ones, which is as it should be.

You might think about the Lifestrategy funds they offer.

www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds

They would give you globally diversified stock holdings with different risk levels depending on the percentage of bond holdings in each fund, up to 100% stocks.

The FTSE 100 index will be heavily weighted towards large company stocks. Smaller company stocks will sometimes perform better, so it's good to have some of them in the mix too.

Thank you so essentially one can have a few different types of index tracker b, tracking different areas of markets.
@wavyneighbour

I listened to amazing podcast last night about vanguard's founder. Everything he says about fund manager's is true and this was pre Woodford.

Fund managers Etc and all business around investing hate Bogle.

I'm re structuring my investment.
To two fund managers but because I genuinel like their companies.

And majority's in different types of index funds.

Just question of which ones, some are capped etc.

I have isa and sipp.

I've invested in Vanguard for a few years due to the low cost.

I'm invested in VVSLRE www.vanguardinvestor.co.uk/investments/vanguard-lifestrategy-80-equity-fund-accumulation-shares

You can see the underlying funds under "Portfolio Data". You will see that that although its UK-focused there is some international investments too.

Do your own research of course as your requirements will be different to mine.

I invest through iWeb who are good can do stuff online or on the phone. I'm sure there are other investing platform options out there too.

I listened to amazing podcast last night about vanguard's founder. Everything he says about fund manager's is true and this was pre Woodford.

He completely changed the model. I heard him speak once and he was so impressive.

He was also intensely focused on reducing cost at Vanguard. Instead of taking a limo to a shareholders meeting he rented a tiny little car (a Ford Escort IIRC). When asked why he replied "It was the cheapest thing they had".

Yes in podcast he said he wasn't in it for the money as much...

Thank you everyone for your very helpful comments and for generously sharing your own experiences. I'm really grateful also for the links some of you have kindly supplied which lead me directly to some key websites; this has saved me a lot of time searching online - thank you! This is why I love the pool of Mumsnet wisdom - so good for linking one so fast to such great people, worldwide! .

Bogle really sounds like my kinda guy! MissConductUS I love the story about the car! What a refreshing contrast to all the fund managers who don't give a second thought to getting rich on the backs of those who often can ill afford to be exploited. Sounds like there are a lot of myths about actively managed funds and their 'star' managers, which he has debunked, via the Vanguard model.

Can anyone kindly mention any example of other specific funds which they have found to offer encouraging/ excellent growth over time? (Eg caranx thanks for mentioning VVSLRE, I'll check that out). There are so many Vanguard funds, it's hard to know where to start, and clearly I will need to do some in depth research first based on my own situation. - I do try looking at all the performance charts, but it does help to hear from people's personal experience.

I do try looking at all the performance charts, but it does help to hear from people's personal experience.

Don't pay too much attention to past performance, think about diversification and risk tolerance. Risk tolerance is driven by time horizon (how soon do you anticipate needing to spend some of the money) and your other assets - if you have ample cash to deal with emergencies, you can tolerate more risk in your stock investments.

I would think about that and then pick one of the Lifestrategy funds. The 80% stocks one is fine if you won't need the money for 5-10 years and you're not going to faint every time the market has a wobble.

By the way, I am more than happy to answer questions and am very pleased that you've found my input helpful.

There is absolutely no such thing as the best performers.

You need a time machine for that.

Furthermore last years best performers are next years worst performers.

You therefore need the worst performers.

Welcome to the strange and wonderful world of investing.

I use vanguard lifestrategy 60% accumulating units and in my minds eye it has a mean return of 10% and a standard deviation of 10 %. I hold it forever and ever and ever.

I also use a combination of ETFs and investment trackers in my oh so clever personal portfolio which does ok but the vanguard product is better.

Thanks again to all for your comments and input! - It's really helping me start to get a feel for this whole index tracker area, I'm truly grateful. Darkcloudsandsunnydays your points are valued, I do find the world of investing weird, if not yet exactly wonderful ….. ! Did you mean that you also invest in investment trusts rather than OEICs? (if investment trust trackers exist...?)

MissConductUS, you have a lot of expertise ( dare I ask if you even maybe work in financial services? If self-taught like me, you are clearly way ahead and far more confident and knowledgeable about these things).

I'm beginning to think that the Vanguard Lifestrategy 60% Equity (Acc) might be the way for me to go. I'm just 60 now, have also been looking at Vanguard's Target Retirement 2030 Fund (Acc) - it looks pretty similar to me in terms of bond-equity weightings, performance and countries etc, but the charges are a tad higher.

I'm seriously considering now switching my lacklustre Marlborough Multi-cap income class P (Acc) - as advised to me by my (now not-so-trusted and certainly not-so-cheap) platform HL - to the VG Lifestrategy 60% Equity Fund. Will do this soon … unless some compelling reasons arise first to discourage me from doing so!

MissConductUS, you have a lot of expertise ( dare I ask if you even maybe work in financial services? If self-taught like me, you are clearly way ahead and far more confident and knowledgeable about these things).

Aw, shucks.... I am actually an HCP, but also studied finance and economics at uni, which tends to be less career focused here in the US. I've also been an active investor since I started working, which was a few decades ago. My primary news sources are The Economist and the WSJ.

The target retirement fund dates are the date when you expect you stop to working and the additional expense is due to the fact that the composition of the fund becomes more heavily weighted towards bonds as the date approaches, so there are more sales of stocks and purchases of bonds, which raises transactions cost.

There was a recent study that showed that they have no performance or safety advantage over a balanced portfolio, so I'd go with the 60% equity fund. I have the target date funds available to me in my retirement account and just make my own balanced fund by splitting my investments between pure stock index funds and pure bond index funds. It's probably just a faff on my part, but it makes me feel useful.

Do bin the Marlborough fund. There's a 1% commission to buy and the ongoing expenses of 0.78% are insane. Can you imaging doing business with a bank that took 1% of every deposit? Whoever recommended it should be retained to sell used cars.

That should be retrained, not retained.

Here's the data on the Marlborough fund.

www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000PBFB

Freudian financial slip. In my chosen asset allocation portfolio the more specialised trackers are replaced by investment trusts at a reasonable premium or discount. There is only one IT at the moment. There are so many good specialised ETFs that it’s not necessary any more,

To put this into context you will get a real rate of return after inflation of typically 4.5% in stocks less 1% fees real making 3.5% so try compounding that up. It’s calamitous.

Hi again fellow investors, your comments are much appreciated. I've now taken the plunge and binned (or rather switched) the Marlborough fund in favour of the Vanguard Lifestrategy 60% Equity Fund in my Stocks and Shares ISA.

Also wondering now whether (in my son's JISA) to switch the Marlborough UK Micro-Cap Growth class P (Acc) Fund, over to the Vanguard Target Retirement 2055 (Acc) Fund. He is 15.

Vanguard's charges look SO much lower!! I'm beginning to get the hang of this.....

@wavyneighbour Congratulations, you're a Boglehead! Jack said this in one of his many public speeches about investing:

This comparison makes it obvious that investors have paid a staggering cost for the excessive expenses and excessive marketing focus of the mutual fund industry. This is what we mean when I say that in mutual funds you don't get what you pay for. You get what you don't pay for.

Here's the link to the whole talk, which is well worth a read.

In Investing, You Get What You Don't Pay For - Remarks by John C. Bogle Founder and Former Chairman, The Vanguard Group

Also wondering now whether (in my son's JISA) to switch the Marlborough UK Micro-Cap Growth class P (Acc) Fund, over to the Vanguard Target Retirement 2055 (Acc) Fund. He is 15.

If this is all or most of his invested assets, a microcap fund is wildly inappropriate. He needs much broader diversification. Microcaps are highly sensitive to economic cycles and go bankrupt in large numbers during economic downturns.

Vanguard target retirement 2055 is a fine choice for his long term needs. If you think he might need some of the money sooner, for uni or house deposit for example, consider splitting part into a more conservative investment, like a Vanguard bond fund or one of the more conservative lifestyle funds.

Well done, and welcome to the club!

I forgot to mention that with a 5% sales commission and ongoing expenses of 1.53% that Marlborough microcap fund should be renamed the Marlborough Highway Robbery Fund. It's never going to provide a decent, long term return. Every investment in it starts with a 5% loss.

But vanguard life strategy is a fund is it not?

Ie its not the safe bet tracker? If so how is it different?

Also how many funds should one have in a sipp or isa?

I'm thinking two gamble risk s... Eg fundsmith and lindsell train and then something exposing to America and then one? 2 index funds? Or too much?

But vanguard life strategy is a fund is it not?

Ie its not the safe bet tracker? If so how is it different?

It is a fund. It's a fund that invests in a mix of index trackers, or what used to be called a fund of funds. Think of it this way, every quid you put in gets split among other index tracker funds so that you have a more widely diversified portfolio (shares, bonds, international, US, etc.) while retaining the benefits of very low costs.

Also how many funds should one have in a sipp or isa?

Either one that provides broad diversification, like the Lifestrategy funds, or separate funds for stocks and bonds, emerging markets and developed markets.

I'm thinking two gamble risk s... Eg fundsmith and lindsell train

Look at the costs. Read the talk I linked to above by John Bogle.

Thanks MissConductUS, I am most honoured and massively grateful to be admitted to the Boglehead community!! And mightily relieved to have escaped the Marlboro Highway Robbery Fund

Why oh why did it take me all this time - (I started investing about 5 years ago) - to discover the truth?! It's taken this Woodford debacle to really open my eyes to the blatant and shameless exploitation by glitzy fund managers, of ignorant and vulnerable investors like me. Who even knew there was such an alternative? It's obviously not in their interest to let Vanguard get any of the nauseating self-promoting publicity they drum up for themselves. They must hate Bogle!

Thanks too for the Bogle talk which I've printed off and will read at leisure. Re: my son's JISA, so glad to have your comments. He had the Marlboro Micro Cap fund because it was part of a ready made portfolio that HL flogged to me a few years ago. There's only about £500 in it, and this has hardly grown over the years - now I know why!! This will now shortly be the VG TR 2055 fund I mentioned earlier. (Good point to split this in 2: this I will do, as the amount in it grows). I'm now looking at all my other posh-named OEIC funds with a far more cynical eye. Their days are numbered ...

You are a Bogle angel!

You're most Welcome wavyneighbour!

Give bogelheads a google. There's an on line forum and lots of other resources that will come up. There's even a facebook group.

The traditional investing business absolutely hates Vanguard. Bogel has done more social good than the lot of them put together. Historically, it's been a process. Before OEIC's (what we commonly call mutual funds in the US) people had to buy individual stocks. The brokers screamed bloody murder when mutual funds came along, then they figured out how to make excessive commissions and profits from them. This book was the first one to call out the industry:

www.amazon.com/Where-Are-Customers-Yachts-Street/dp/0471770892?tag=mumsnetforu03-21

Now index funds hold more investment money than traditional managed/stock picking funds, so we are winning the battle. You can be a Bogle angel too! Just spread the word.