Which Vanguard funds?

[invyqn]

I have two small lAVIVA pensions which have historically done well -but which need moving imo, now they’re not doing well. I’ve made ££ on them so don’t feel I’m cashing out when they’re down.

I already have a Vanguard pension . It’s doing ok, but I’m not sure about putting more into Vanguard Target Retirement, but I do like the low fees, and the ease of use (AVIVA - take note - your dashboard can be baffling and circular). Anyway, if I move the 2 small AVIVA ones to Vanguard, I’ll have all my pensions in one place which is appealing…

how do I choose which fund? Not much choice it seems. I’m prob over exposed to the US in that target retirement 2040 fund… Which is essentially a handful of major IT based stocks in essence I guess.

I’m 7/10 happy with risk if 10 is risk happy and 0 is risk averse.

any thoughts?!

Bumping

Target retirement funds are based on date of retirement. Typically the percentage of bonds increases as you get closer to retirement.
How old are you? And when do you intend to retire?

Thank you @invyqn
Late 40s. hoping to retire about 2040, I’ll be late 60s then.

I don't like target date funds as they change the equity to bond ratio for you.
I like the LifeStrategy funds, as you choose the equity to bond ratio and the fund does the rest. They are UK weighted though, so more UK stocks than would be in a global fund.

A fund is not for life, you can change it. So make a plan, stick to it for a few years giving it chance to work, review and change if necessary.

You have 20 years so possibly too early to buy bonds.
Research
FTSE global all cap
FTSE developed world exc UK
Lifestrategy 80 ( 20% bonds)
Lifestrategy 100%. (Bit heavy on UK investments)
Listen to pensionwise podcasts
consider the fees on each fund.
Think about your tolerance for volatility.
Will you be regularly investing?
Research DCA.

Thanks.

I won’t be investing regularly, I’m semi disabled on a very low income, married.

that's interesting about being highly exposed to UK investments… ty.

I’m not sure how I do DCA if I’m transferring old pensions… ? Pls can you clarify?

Can I buy FTSE global all cap funds on the Vanguard platform then @Beenalongwinter ?

www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-acc/overview

www.vanguardinvestor.co.uk/investments/vanguard-ftse-developed-world-ex-uk-equity-index-fund-gbp-acc/overview

Note the lower fee.

We use Lifestrategy 80 and it has been performing really well over the last 6 months (like the rest of the market has). We’re early 40s, so we have a good while before we need to shift the balance to bonds I think. Incidentally, I also think we’re in for an asset price boom once interest rates come down and people start looking for more profitable places to park their cash.

DCA or £ CA are not relevant if you are transferring pension lump sums.

Thank you @Beenalongwinter I will look into those at the weekend. I can see one of them has an FE rating of 3/5. I usually look for 4-5/5. Do you not set much store by FE ratings? Not being awkward but I’m trying to understand more!

interesting @Travelsweat - by price boom - do you mean that buying now rather than later would be advantageous?

I think I need to make certain that I have a spread of European and US funds too… so much to think about!

@invyqn

I started very cautiously using vanguard life strategy 60 i found the lack of growth frustrating.
Risk can also be viewed as volatility I find I am more comfortable with global trackers more volatility and better growth. Consider your tolerance for volatility and hopefully someone else will be along soon to give another view.
@nannynick?

Well, the problem with investing in anything (stock, housing, etc) is that nobody actually knows what the market is actually going to do. The signals are pointing toward interest rate decreases this year, but there could be bumps along the way. For example, New Zealand and Australia have just signalled that it’s possible they may yet increase their rates when they meet at the end of Feb, and that could potentially trigger a short term panic in global markets because everyone has been betting on big decreases. There was an interesting article about that this week in the FT. There is also a possibility that the recession in the US and UK are only just beginning and that increases in layoffs this spring, coupled with persistently high interest rates, could trigger additional house price falls if enough people are forced to sell.

Having said that, when rates do decrease—whether that’s this year or in 2025–I do think we will see a boom in all kinds of asset prices. The people buying will largely be the ones who are rich enough to have been unaffected by the cost of living crisis (or they may have been the ones profiting from it), and they have spent the last two years sitting back and enjoying the higher interest on their savings. Once interest rates come down and it becomes less profitable to sit on large piles of cash, they’ll start to buy assets, which will push up the price.

Personally (and this is just me, I am in no way a financial advisor), I’m waiting until the Australian and NZ central banks meet next week (in case there is a dip in prices following their decision) before we move the rest of this year’s allowance into the LS80 ISA. But in general, I think that the best thing to do is to just always be buying. Nobody knows for certain what the market is going to do, so trying to time buying is a bit of a fool’s errand. If you have a certain amount to spare every month, the average person makes the most money when they automate investing and just buy regularly, no matter what.

@Travelsweat thank you for your detailed reply. Lots to think about!

I'm in the same boat . Am transferring a large pension into vanguard and am at the stage of choosing funds .

For a new investor it's hard to know what to do . I am of pensionable age 58 and want decent growth without being reckless . My first thoughts are a 50/60 split between lifestrat 80 and global all cap .

I suggest you do some reading as I have done.. I was paying an IFA and all he did was put it in investment funds. Cost thousands for nothing. I decided to manage them myself which was nerve racking but actually easy. I'm now saving his charges and manage both investments (ISAs and pension)

Bear in mind investment funds have a massive risk spread themselves so you don't need huge numbers of them. I have spread risk through global funds, North America and far east. I have liquidated U.K. funds as I think the outlook is so poor with the current massive taxation on companies and individuals.

I read Morningstar reviews on funds which details risk and historic performance, size etc. really helpful

Risk level are a bit disingenuous. Low risk means less exposure to shares and is more focussed on bonds and others. Safer but much lower returns. Risk 5 + means 100% equity except for cash held to buy.

This isn't a short term game. This is for long term investing and there will be ups and down. But look at stock markets over 30 years and you will see returns.

Typically up to three years ago I was doing 8% a year. Since then they made nothing. Since I managed them myself (12 months now) they have performed brilliantly and am sitting on 30% gain which I never imagined but reflects I have invested in higher risk than my previous profile. However, the funds I have also detail previous maximum losses so some reassurance but no guarantee.

You don't need to be an expert. But basic reading and due diligence it is feasible to manage investments.

By the way, a lot of my cash came from selling my buy to let portfolio. As the government made it so difficult for landlords, I obliged them and sold all my houses. Contrary to what govt suggested at the time, none of my tenants could afford to buy the property, despite me offering them all a substantial discount and was something I was really sad about as I was an excellent landlord, maintained the properties really well but it just was not viable to continue. I would not recommend investing in property as the environment is so hostile unless you have a portfolio and set up as a LTD company

I agree with all of the above.
Similar here.