The GAC seeks to accurately reflect this, whereas the LS100 does not. However, you would have to manage the two funds yourself as the prices of both rise and fall. Don’t forget, I’m not a financial adviser or a professional. LS100 favours the UK due to ‘home bias.’ According to Investopedia, home bias is the tendency for investors to invest the majority of their portfolio in domestic equities, ignoring the benefits of diversifying into foreign equities. ... Category Global Large-Cap Blend Equity. Vanguard LifeStrategy 100% Equity A Acc Sector: IA Global (View sector) FE fundinfo Crown Ratings assign a rating to funds based on quant analysis of consistency, volatility and performance. Taking the timeframe into account i would go 100% equities on the SIPP and something lower on the ISA You seem to want to tinker with allocations. The reasons behind this seem to be familiarity with the ‘home turf’ (in that we feel more reassured and knowledgeable if we are buying slices of companies we see on the high street and on the news) and in reducing foreign currency exposure. – The FIRE Shrink, https://twitter.com/benjaminluk/status/1263606245774131200, https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F000003VEC, https://monevator.com/how-hedging-your-shares-against-currency-risk-can-boost-returns/. The ongoing cost for each fund is the first discrepancy. The index is made up of large-, mid- and small-cap stocks from around the world. As with most investments over a long time horizon, we expect a lot of “reversion to the mean”. bc1qk6ghr8sjhgcgg6pwqspm3mtfgkgd4g8wpwwxn3. Find the latest Vanguard LifeStrategy 100% Equi (0P0000TKZO.L) stock quote, history, news and other vital information to help you with your stock trading and investing. 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. The index is made up of large-, mid- and small-cap stocks from around the world. I have to confess, I did contribute to both the LS100 and the FTSE GAC for a short time, before deciding to contribute solely to the GAC. 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. Hi great post. What do you WANT to invest in? – Mr Fox. FTSE Global All Cap seems to be the most recommended and I'm inclined to go for that one. LS100 on the other hand is a ‘fund of funds’. 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. This is all just the result of me reading and collating info from various sources. Now without getting far too technical for a comment, here are a few thoughts. Hi, Im currently investing in both LS80 and FSTE GAC (75% budget to LS80, 25% to GAC). Why do the portfolios have more allocated to the UK market? 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. Great , thanks for the comprehensive answer, Hello Mr Fox However, there are obviously plenty of other choices. 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. 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%. I think sticking with the backward-looking model makes the most sense for your question. In other words, Vanguard think it is better to hold a hold a diversified portfolio that accurately reflects the global market cap. However, they choose to have a greater weighting towards the UK in the LifeStrategy funds as they think that is what investors will prefer. Using the switch function would instruct Vanguard to sell LS100 –> Buy Global All Cap. 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! My understanding is a good fund should be <2%. A passive fund that aims to track the performance of the FTSE Global All Cap Index. Having extensively reviewed these funds in the past, I'm surprised I never ran into this enigma myself, an interesting talking point for sure. If the alpha generated is high enough, the juice is worth the squeeze so to speak. Sorry, your blog cannot share posts by email. Change ), You are commenting using your Google account. The OCF for (I’m just going to call the fund All Cap now) All Cap has had been between 0.25% and 0.23% fees in the past three years. Each of the five LifeStrategy funds holds over 1,000 assorted securities. These funds are very similar in many ways, so below will be a long list of everything I think is worth noting. Outflows and inflows into a fund can drive the change within the turnover ratio as the fund manager needs to purchase/sell the underlying holdings”. ( Log Out /  Essentially, most investors will feel an affinity for their home market and will want to invest in what they know. Is a higher turnover rate bad? Do you have any further insights here please? 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%. Very odd! The LifeStrategy series truly shines when you start to factor in bonds as well. Specifically, WHY and HOW can you justify this? 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. Factor this back in and your “personal tracking error” metric for holding this actually dips down to somewhere between 0.05% and 0.02%. Is this pointless? This would take 2-5 working days to complete so you’d have a couple of days out of the market but other than that it would consolidate your investments as you desire. All you need is an email address. In a recent video we mentioned a Vanguard global fund we were using to capitalise on the cheap stock prices. Thanks for the kind words. Having read the fund information breakdown on Vanguard Investor for the Vanguard FTSE All Cap Index Fund, I am having difficulty working out it’s exact tracking error and tracking difference. If you do opt for individual stocks, how much are you planning on putting into them as a % of your overall investment portfolio? You’re right, investing more in your home country should help avoid currency risk, but then you may be overexposed to one country. But to me also is the possibility that it will (and I understand this is not a given as future performances cannot be assured) grow in the long-term over 15-20 years, with my compounding interest and pound cost averaging through monthly automated payments. View all posts by mrfifox, Great post. Find basic information about the Vanguard Lifestrategy 100% Equity Fund A Acc mutual fund such as total assets, risk rating, Min. What platform are you currently using to invest? This comes with the added bonus of allowing you control over rebalancing and the choice of which fund to sell if you need to liquidate at any point – Mr Fox. Hope there is some useful insight for you there . 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