All-World vs. LS80 in current market
All-World vs. LS80 in current market
I would be happy if someone can answer the one or other question:
1. Is it right to say that Vanguard's Life Strategy (LS80) Euro hedged is basically the Vanguard FTSE All-World (A1JX52) combined with the Vanguard Global Aggregate Bond (A2PJZJ)?
Because both, stocks and bonds within that product are seperated in regions. Why would they do this if they could just offer an automatic rebalancing between the All-World and the Aggregate Bond? Maybe they do some active management by shifting weight between the different regions?
2. If you want to be long term invested in the LS80 but have to invest a bigger sum starting from now within the next 12 months. Do you think it makes sense in the current market situation to buy instead the All-World and once we are back into a bull market shift piece by piece into the LS80?
1. Is it right to say that Vanguard's Life Strategy (LS80) Euro hedged is basically the Vanguard FTSE All-World (A1JX52) combined with the Vanguard Global Aggregate Bond (A2PJZJ)?
Because both, stocks and bonds within that product are seperated in regions. Why would they do this if they could just offer an automatic rebalancing between the All-World and the Aggregate Bond? Maybe they do some active management by shifting weight between the different regions?
2. If you want to be long term invested in the LS80 but have to invest a bigger sum starting from now within the next 12 months. Do you think it makes sense in the current market situation to buy instead the All-World and once we are back into a bull market shift piece by piece into the LS80?
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Re: All-World vs. LS80 in current market
cp03525, Welcome! I moved your question to our Non-US Investing forum, where the members are more experienced with non-US investment options.
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Re: All-World vs. LS80 in current market
1. Lifestyle funds are meant to be a one stop product for the beginners or those that do not want be involved in any way beyond an initial selection of a fund. Set it and forget it kind of product. It is balanced by the fund and it reflected in the price of fund.
Vanguard UK doesn't offer auto rebalancing, not sure about in other EU countries.
Google can't find any Lifestyle fund that is EU hedged BTW.
2. Sounds like you are proposing a dynamic asset allocation based on the the performance of your investments, that is frowned on this forum (market timing is a cardinal sin here).
Vanguard UK doesn't offer auto rebalancing, not sure about in other EU countries.
Google can't find any Lifestyle fund that is EU hedged BTW.
2. Sounds like you are proposing a dynamic asset allocation based on the the performance of your investments, that is frowned on this forum (market timing is a cardinal sin here).
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Re: All-World vs. LS80 in current market
The LS80, LS60 etc. products offered here in Europe are basically equivalent to FTSE All-World on the equity side and Global Aggregate Bond (EUR hegded) on the bond side.
The only reason why Vanguard uses different regional funds is that under EU UCITS rules, a mixed fund of funds like this is not allowed to have more than 20% in one fund. So, for example, the 80% world equity in LS80 cannot simply be FTSE All-world. So Vanguard tries to come close to that by using different regional funds like FTSE North America, FTSE Developed Europe etc. below the 20% threshold. I think that is the explanation.
The only reason why Vanguard uses different regional funds is that under EU UCITS rules, a mixed fund of funds like this is not allowed to have more than 20% in one fund. So, for example, the 80% world equity in LS80 cannot simply be FTSE All-world. So Vanguard tries to come close to that by using different regional funds like FTSE North America, FTSE Developed Europe etc. below the 20% threshold. I think that is the explanation.
Re: All-World vs. LS80 in current market
Thank you.
Did somebody understand whether the 0,25% TER are the total costs or whether they are onny for the product in the sense of that they do the rebalancing for you and you must pay in addition pay fees for the different etf they are holding?
Did somebody understand whether the 0,25% TER are the total costs or whether they are onny for the product in the sense of that they do the rebalancing for you and you must pay in addition pay fees for the different etf they are holding?
Re: All-World vs. LS80 in current market
Can not find but this was discussed before - you just pay 0,25 and do not pay additional TER for each individual ETF.
Re: All-World vs. LS80 in current market
Just to add, the Lifestrategy funds are not quite the same as All World and Global Aggregate Bond. The Lifestrategy equity side has a strong home bias e.g. If you buy the UK Lifestrategy product the equity component has a much higher UK equity weighting than All World. It is your choice over whether that is good or bad.
AA: 75/22/3: 50% VWRL | 25% MSFT | 22% VAGP | 3% Cash. |
Age 50. Early retiree 7 years now, renting my property whilst fulltime travelling, focused on health & happiness
Re: All-World vs. LS80 in current market
thanks
this is strange. I once saw the British All-World and yes, the UK were overweighted. But I am located in the EU (Germany) with 58% US, 3,3% China 3% UK.... and less than 1,8% Germany this seems to be a neutral market capitalization which is exaclty what I want. I think a healthy anti-home-bias makes morse sense when you imagine in how many ways your prosperity depends already on your country....bdr1000 wrote: ↑Sun Oct 09, 2022 7:07 am Just to add, the Lifestrategy funds are not quite the same as All World and Global Aggregate Bond. The Lifestrategy equity side has a strong home bias e.g. If you buy the UK Lifestrategy product the equity component has a much higher UK equity weighting than All World. It is your choice over whether that is good or bad.
Re: All-World vs. LS80 in current market
Agree with your sentiment, which is one of the reasons as a UK domiciled investor I don't like Lifestrategy and prefer All-World.
Don't know why vanguard chose this allocation, their market research must indicate a majority of UK investors want to be overweight on home bias.
Don't know why vanguard chose this allocation, their market research must indicate a majority of UK investors want to be overweight on home bias.
AA: 75/22/3: 50% VWRL | 25% MSFT | 22% VAGP | 3% Cash. |
Age 50. Early retiree 7 years now, renting my property whilst fulltime travelling, focused on health & happiness
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Re: All-World vs. LS80 in current market
Even Vanguard is critical of homebias, I was incredulous reading this blog post of theirs thinking about the LS funds.bdr1000 wrote: ↑Wed Oct 12, 2022 11:58 am Agree with your sentiment, which is one of the reasons as a UK domiciled investor I don't like Lifestrategy and prefer All-World.
Don't know why vanguard chose this allocation, their market research must indicate a majority of UK investors want to be overweight on home bias.
Re: All-World vs. LS80 in current market
Correct, no home bias in the EU version of LScp03525 wrote: ↑Mon Oct 10, 2022 3:29 pmthanks
this is strange. I once saw the British All-World and yes, the UK were overweighted. But I am located in the EU (Germany) with 58% US, 3,3% China 3% UK.... and less than 1,8% Germany this seems to be a neutral market capitalization which is exaclty what I want. I think a healthy anti-home-bias makes morse sense when you imagine in how many ways your prosperity depends already on your country....bdr1000 wrote: ↑Sun Oct 09, 2022 7:07 am Just to add, the Lifestrategy funds are not quite the same as All World and Global Aggregate Bond. The Lifestrategy equity side has a strong home bias e.g. If you buy the UK Lifestrategy product the equity component has a much higher UK equity weighting than All World. It is your choice over whether that is good or bad.
Also correct: we believe it's better that you get LS80 if you think that's your long-term choice. If you get all world you'd start thinking about when "is this a bull" to decide about moving to LS80, and you'd probably make a bad choice. You might have a dynamic asset allocation based on year to retirement though, that'd make more sense, and it's probably easier to implement with a all world + global aggregate bond than LS80+ global aggregate bond.