I am interested in the Vanguard UK Lifestrategy mutual fund. Assuming direct investment with Vanguard is possible. Alternatively, I am weighing up the 'bad' ETF route as discussed on this forum.
The aim of the investment is to accumulate over the next 5-8 years and then be drawn down to pay the bills or supplement a lower income. Am I missing any information which could make one option more attractive than the other?
Common disadvantages to both:
LifeStrategy Mutual fund advantages:
ETF advantages:
ETF disadvantages:
Allocation to underlying Vanguard funds
As at date 31 January 2016
Percentage
Vanguard FTSE Developed World ex-U.K. Equity Index Fund 19.5%
Vanguard Global Bond Index Fund 19.0%
Vanguard FTSE U.K. All Share Index Unit Trust 15.4%
Vanguard U.S. Equity Index Fund 14.4%
Vanguard U.K. Government Bond Index Fund 6.1%
Vanguard FTSE Developed Europe ex-U.K. Equity Index Fund 4.2%
Vanguard Emerging Markets Stock Index Fund 3.8%
Vanguard U.K. Investment Grade Bond Index Fund 3.5%
Vanguard U.K. Inflation-Linked Gilt Index Fund 3.1%
Vanguard Japan Stock Index Fund 2.3%
Vanguard Euro Government Bond Index Fund 1.8%
Vanguard Investment Series PLC - US Government Bond Index Fund 1.8%
Vanguard U.S. Investment Grade Credit Index Fund 1.8%
Vanguard Japan Government Bond Index Fund 1.3%
Vanguard Pacific ex-Japan Stock Index Fund 1.1%
Vanguard Euro Investment Grade Bond Index Fund 0.8%
Vanguard U.K. Government Bond UCITS ETF 0.1%
Total 100%
The aim of the investment is to accumulate over the next 5-8 years and then be drawn down to pay the bills or supplement a lower income. Am I missing any information which could make one option more attractive than the other?
Common disadvantages to both:
- Conversion of euro funds to either US$ or £UK.
LifeStrategy Mutual fund advantages:
- Low TER of 0.24%
- Accumulating with no distribution of income.
- Diversity within the fund, sub funds listed below.
- Losses within the fund are offset against gains within the fund.
ETF advantages:
- Low TER.
- Gains subject to CGT as compared with Exit Tax.
- Losses can be offset against other capital gains.
ETF disadvantages:
- Not accumulating, distributions are subject to income tax+PRSI+USC. Although distributions can be reinvested subject to fees.
Allocation to underlying Vanguard funds
As at date 31 January 2016
Percentage
Vanguard FTSE Developed World ex-U.K. Equity Index Fund 19.5%
Vanguard Global Bond Index Fund 19.0%
Vanguard FTSE U.K. All Share Index Unit Trust 15.4%
Vanguard U.S. Equity Index Fund 14.4%
Vanguard U.K. Government Bond Index Fund 6.1%
Vanguard FTSE Developed Europe ex-U.K. Equity Index Fund 4.2%
Vanguard Emerging Markets Stock Index Fund 3.8%
Vanguard U.K. Investment Grade Bond Index Fund 3.5%
Vanguard U.K. Inflation-Linked Gilt Index Fund 3.1%
Vanguard Japan Stock Index Fund 2.3%
Vanguard Euro Government Bond Index Fund 1.8%
Vanguard Investment Series PLC - US Government Bond Index Fund 1.8%
Vanguard U.S. Investment Grade Credit Index Fund 1.8%
Vanguard Japan Government Bond Index Fund 1.3%
Vanguard Pacific ex-Japan Stock Index Fund 1.1%
Vanguard Euro Investment Grade Bond Index Fund 0.8%
Vanguard U.K. Government Bond UCITS ETF 0.1%
Total 100%