View more on these topics

Vanguard index funds of funds created with RDR in mind

Vanguard has recently launched a range of five funds of index funds that are designed for different levels of investor risk tolerance with the RDR in mind.

The five LifeStrategy funds are marketed by Vanguard as a low-cost all-in-one solution providing professional portfolio construction, management and risk control in a transparent way. The LifeStrategy fundsare built using a preset broadly diversified asset allocation and automatic rebalancing to avoid drifting away from this and ensure the portfolio stays in line with the investor’s objectives. The funds comprise amix of global equities, ranging from 20 per cent to 100 per cent, with the remainder in UK bonds using existing Vanguard index funds.

Vanguard believes that using index funds as the underlying building blocks reduces volatility relative to using active funds, while also providing a low-cost, transparent and broadly diversified portfolio.It is well known for its passive investment strategies, but not all IFAs are fans of passive only portfolio. Some advisers may also prefer passive portfolios with active asset allocation offered by companies such as Evercore Pan Asset and 7IM.

Defaqto insight analyst for funds Fraser Donaldson says: “The five funds are also categorised into three distinct investment periods and risk profiles –  short term at three to five years, medium at longer term of five plus years and longer term investing of 10 years plus.

These asset managed funds combine the attractions of low-cost passive investment with the increasingly popular risk banding, which will be popular with many IFAs looking for simple outsourcing options.

Advisers requiring passive investment will no doubt be excited by the cost of these funds. They are extremely competitive in a market where charges are under more scrutiny than ever before. However, access to these funds via Vanguard is restricted with a minimum investment of £100,000. Advisers with clients with less than £100,000 to invest should check the terms with their platform, where minimums are likely to be considerably less.”

Recommended

Tisa’s launch to ease fund re-registration

The Tax Incentivised Savings Association’s re-registration contract club has launched and it is inviting firms to become members. The Tisa Exchange Limited has been developed to help with the electronic transfer of assets between platforms and aims to become the industry standard for re-registration contracts. Members of TeX will pay a one-off joining fee of […]

MM leader: Stop scaring the public

The recent hysterical Consumer Focus “pension churning” report and Ivan Massow’s new business plan have put the issue of trail commission firmly into the public gaze. In the run-up to the introduction of the retail distribution review and with the FSA on the look-out for a potential commission closing-down sale it was always likely that […]

Barclays adds to offset range

Barclays has introduced a new range of Woolwich offset mortgages. The range includes a two-year offset tracker at 1.88 per cent above the Bank of England base rate for loans up to 70 per cent of valuation, giving a current pay rate of 2.38 per cent.

37

Nic Cicutti: Massow’s trail deal leaves me cold

Here is a confession for you – I am a massive bargain-hunter. I regularly spend many happy hours online, disproportionately far more than any saving I might make, to shave a few quid off the cost of our household’s potential purchases. Just to give you an example, at the back of my garage are a […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment