Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. To answer your first question, I’d be inclined to say yes. Link here for you, it is also pinned to the side bar: https://thefifox.wordpress.com/2019/03/28/our-stocks-and-shares-isa-portfolio-explained-what-do-we-invest-in-and-why/. I opened up a Lifestrategy 100%, putting in £250/month from April (had been researching investing for a while) 3. You probably hope to see a long term return of 4-9%, or something around that. Thankfully I don’t think your situation is too complex! However if you wanted a split other than those offered by LS funds then you end up buying more than one fund anyway; GAC +/- a bond fund seems a more robust and flexible way forward for us. The strategy by which both funds acquire new holdings is via index fund purchasing, but LS100 has particular ratios that are actively chosen ahead of time – more on this below. I just opened both a Vanguard LifeStrategy 80% Equity Fund and Vanguard FTSE Global All Cap Index Fund as my main two investment portfolios. ... Vanguard LifeStrategy … Given all the data, I’d be inclined to agree and would be happy to say All Cap is tracking its index very reliably thus far. ( Log Out /  Now I am not advocating copying this mindlessly, as everyone’s situations differ widely, but it can be helpful to see exactly what other people are doing and the whys behind it. . For this reason I believe we are comparing apples to kangaroos and it makes the fund hard to analyse using this metric outside of Vanguard's bubble. The FTSE Global All Cap Index Fund tracks the FTSE Global All Cap Index, so it is against this benchmark we must measure its performance. Great points and plenty of food for thought. So far, I’ve found nothing better. – Mr Fox. Why do the portfolios have more allocated to the UK market? Having extensively reviewed these funds in the past, I'm surprised I never ran into this enigma myself, an interesting talking point for sure. – Mr Fox. The upshot of this is that in the last 3 years The Vanguard FTSE Global All Cap Index Fund returned 4.67% and the FTSE Global All Cap Index itself returned 4.97%. Do you have any further insights here please? If you’re really specific about avoiding a UK home bias then Global all cap is the way forward, but LS100 does the job just fine as a global tracker. Hello Mr Fox So I wasn’t quite so far out! Invest in popular Vanguard products like LifeStrategy and Target Retirement Funds or access unique funds targeting specific markets. If you’re at the beginning of your investing career, just choose one and go for it. Global Large-Cap Blend Equity: IMA sector: Global: Launch date: 23 Jun 2011: Price currency: GBP: Domicile: United Kingdom: ISIN: GB00B41XG308: Manager & start date: Not Disclosed. As a rule of thumb you should expect turnover rates to be between 0% and 100% and an index fund should usually fall below 30%. 4600 large/mid/small cap companies. The explanation Vanguard provided to you does closely match to that which I guessed at in my answer before, so my feeling remains the same; it isn’t something to worry about, especially as Vanguard are using their own proprietary metric for this purpose! The index is comprised of large, mid and small company shares in developed and emerging markets. This gives the Global All Cap Fund an apples to apples tracking error of 0.3% – a perfect tracking error score would be 0%. This will almost solely dictate the platform you should choose. It most accurately reflects global market capitalisation. Yes, I’ll ping you a message. I’ve updated the post. As you note, the fund is fairly new so we do not have much historical data to work with, but we have enough to generate some potentially useful data. Is a higher turnover rate bad? If you wanted some bond exposure, but thought that 20% was too much, then it may have been better to put 85% to the GAC and 15% into a dedicated bond fund. If there are any other common questions you’d like to see addressed, let me know! Find the latest Vanguard LifeStrategy 100% Equ (GB00B41XG308.L) stock quote, history, news and other vital information to help you with your stock trading and investing. Find basic information about the Vanguard Lifestrategy 100% Equity Fund A Acc mutual fund such as total assets, risk rating, Min. There are two typical ways that tracking error is calculated; the most traditional way is the approach you mention, comparing historical returns (backward-looking) whereas the other method would be by comparing predicted future returns (forward-looking). Vanguard do not charge a commission on trades so you could freely switch your LS100 holdings into FTSE Global All Cap. As with most investments over a long time horizon, we expect a lot of “reversion to the mean”. Do you think I am over-thinking this and that a 90% entry into FTSE All Cap and a 10% entry into the Vanguard Global Bond Index Fund is enough for my needs? This roll includes everything Mrs Fox and I have obtained for free! Our Stocks and Shares ISA portfolio explained: What do we invest in and why? Many thanks… Both funds have a Vanguard risk ranking of ‘5’. One of the most common questions I find myself addressing for people is the one we will focus on today. Beyond this, in your shoes I would look to answer the following questions to form a guide to work from: 1. Using the switch function would instruct Vanguard to sell LS100 –> Buy Global All Cap. Both funds hold thousands of stocks spanning industries and countries all across the world. All Cap appears to have more turnover than All World and less than a momentum fund – flatly, this is what we'd expect so is consistent at least. @Foxfreebz – Hastily taken photos serving as a miniature archive. If you do opt for individual stocks, how much are you planning on putting into them as a % of your overall investment portfolio? The fund seeks to track the performance of the FTSE Global All Cap Index. In terms of considering currency fluctuations, I’ve yet to see compelling evidence to suggest this is actually required at all. These funds are very similar in many ways, so below will be a long list of everything I think is worth noting. Supposedly everything is priced in already. This is obviously highlighted in terms of long term rate of return. The exact composition of the portfolio can be found on Vanguard’s website. Nonetheless, good catch, thanks for pointing it out. The fund seeks to track the performance of the FTSE Global All Cap Index. GB00B545NX97:GBP. The GAC is a more ‘true’ representation of the global market. on LifeStrategy 100 vs FTSE Global All Cap – FIGHT! The LS100 and GAC are two funds offered by Vanguard that broadly appear to do the same thing; provide a one-stop shop where an investor can set and forget their investment. Vanguard’s global all cap, which I own in my SIPP, only samples the constituents (c.4k of c.7k), so Vanguard’s global small cap has about the same *number* of underlying shares (c.4k). Considering that the funds are managed in GBP, investing 25% in UK companies would possibly hedge against a future strengthening of the sterling ? Lifestrategy funds were around before FTSE Global All-Cap. This is just provided for general info. This article will aim to broadly assess the similarities, differences and strategies that both funds take to hopefully clear up the confusion about which may be better for a UK investor to include in their portfolio. I personally went with the All … To give this number context, I'd look at other similar funds and see what they are like and consider what the stock market is doing when the turnover rate was last calculated. – The FI Fox, https://www.vanguard.co.uk/adviser/adv/detail/mf/overview?portId=8617&assetCode=EQUITY##performance, https://thefifox.wordpress.com/2019/03/28/our-stocks-and-shares-isa-portfolio-explained-what-do-we-invest-in-and-why/, The first three steps on the road to financial competence, Budgeting basics: Part 1 – Myth busting and starting out. So I decided to go with the GAC. Both funds are passive in nature… Sort of. Was just wondering what percentage of investment I should be putting into both. Rather paradoxically this falls under a similarity and a difference at the same time. Is this correct? All in all, I personally feel that All Cap is a solid fund to choose and use if you want a Global All Cap tracker. – Mr Fox. Ultimately, I can’t tell you what to do, but I hope I gave you some food for thought. Much appreciated I definitely agree with your sentiment that reducing total costs are mission critical when choosing your investments, but I think there may be a small case of tail wagging the dog here so to speak! At first I wasn’t sure which to invest in, so I decided to pit them against each other and see which appeared to be better. However, I’m sure I read an article or a comment on Monevator saying that, although the US has beaten the rest of the world (ROW) for the last 10 years, there are plenty of periods of time where the ROW has outperformed the US as well. Let’s kick things off with the similarities. If we are talking 1-5% of your holdings and these would be more “for fun”, then you could look at having your ISA on one platform and your individual stocks on another; this would obviously cirvumvent the issue you highlighted that Vanguard do not allow individual stock purchasing. If not and like the rest of us you admit you have no edge, sticking to index trackers for 99%+ of your investment choices is the wisest play. If you’d like to discuss any of this in more detail and perhaps share some personal numbers (and do not want the rest of the world reading them!) Each of the five LifeStrategy funds holds over 1,000 assorted securities. As the article suggests, there isn’t much in it! Vanguard’s global all cap, which I own in my SIPP, only samples the constituents (c.4k of c.7k), so Vanguard’s global small cap has about the same *number* of underlying shares (c.4k). If you've been stuck searching for Large Cap Blend funds, consider Vanguard LifeStrategy Conservative Growth Fund (VSCGX) as a possibility. What platform are you currently using to invest? Of course, I wouldn’t want to bet against the US in the short term either. My understanding is a good fund should be <2%. The usual warnings apply, but especially here where I’m talking about actual investments – I am not a financial adviser! I write a personal finance blog dedicated to bringing FIRE concepts to a UK audience. Essentially, most investors will feel an affinity for their home market and will want to invest in what they know. Past returns are not an indicator of future success and all that. Tracking error is the difference between the price of a fund and the price of the benchmark that it is attempting to track. I have no interests in bonds currently as I’m fairly young with a decent time horizon. Simple and ridiculously easy to manage over the many decades you’ll be doing so! This tweet in particular made me laugh – https://twitter.com/benjaminluk/status/1263606245774131200. Personally, if you’re tempted to do that, I’d just go with the GAC and a global bond fund, in the ratio that suits your risk appetite. Further to point 2, both funds can be bought as either income or accumulation variants. Hi, Im currently investing in both LS80 and FSTE GAC (75% budget to LS80, 25% to GAC). From my basic understanding (as very new to this world of investing), the turnover rate of 55% does not necessarily project negatively on the All Cap? Global Large-Cap Blend Equity: IMA sector: Global: Launch date: 23 Jun 2011: Price currency: GBP: Domicile: United Kingdom: ISIN: GB00B545NX97: Manager & start date: Not Disclosed. The LifeStrategy series truly shines when you start to factor in bonds as well. With FTSE All Cap you get a lot more transparency in regards to how it will be shaped in the future. Heed Lars Kroijer in this: https://www.kroijer.com/ If you read my ISA article you will see I am a strong advocate of the efficient market hypothesis and I personally believe that doing anything that the market is not is a bad call. 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