What is the Vanguard Lifestrategy 100% equity fund? This fund is a portfolio of comprising approximately 100% shares from around the world. The Fund gains exposure to shares by investing more than 90% of its assets in Vanguard passive funds that track an index. In short, it’s an index fund. The accumulation aspect is that reinvesting of the dividends into the fund to buy more equities. This generates compound interest and can multiply your investment returns.
You may be investing into the Lifestrategy 100 Equity Fund and considering a switch to something like the FTSE Global All Cap Index Fund. Alternatively, you might be thinking about a switch to the Vanguard Lifestrategy 100% fund. There are some critical distinguishing features that you need to know before switching. You may also want to know:
- What is LifeStrategy 100% equity fund accumulation?
- Is Vanguard 100 LifeStrategy a good investment?
- Does Vanguard LifeStrategy 100 pay dividends?
- Are Vanguard LifeStrategy funds any good?
You can find the answers to these questions here. To truly understand the performance of the LS100 we need to dig a little deeper. We need to understand the key differences between the LS100 and other global funds. For example, how does the Vanguard Lifestrategy 100% Equity Fund and FTSE Global All Cap compare. In short, these are some major historical differences in performance. This leads to the question of switching to or from the L100 fund or just leaving everything as it is?
Disclaimer: This is not financial advice and you are responsible for your own investment decisions. When Investing capital is at risk.
Vanguard Lifestrategy 100 Review
This article is my personal Vanguard Lifestrategy 100 review. When reviewing a fund such as the Vanguard Lifestrategy 100, I review the fund costs, historical returns, potential future returns, asset allocation and potential alternatives. I want to make sure that the fund I select is appropriate for my personal financial goals and situations. Make sure you do the same or consult a qualified financial advisor if you’re not sure. This Vanguard Lifestrategy 100 review is just a few key points from my own research.
What is The Vanguard LifeStrategy 100% Equity Fund Accumulation?
What exactly is the Vanguard lifestrategy 100 equity fund? This fund is a portfolio of comprising approximately 100% shares from around the world. The Fund gains exposure to shares by investing more than 90% of its assets in Vanguard passive funds that track an index. In short, it’s an index fund. The accumulation aspect is that reinvesting of the dividends into the fund to buy more equities. This generates compound interest and can multiply your investment returns.
Is Vanguard LifeStrategy 100% Equity Fund A Good Investment?
Past performance is not a reliable indicator of future results. However, if past results are anything to go by then this is what a good fund looks like. Since its inception the Vanguard lifestrategy 100 equity a acc has returned 182.58%. Over 10 years it returned 173.78%. This means that had you invested £10,000 it would now be with £28,169. (*Correct as at date 31 Oct 2022)
In isolation this looks great but it’s all relative. We need understand a funds returns in relation to the benchmark index and other funds. For example, how does this fund compare the S&P500, to the MSCI World Index or even the FTSE Global All World Index. In truth, it lags behind both and there is a good reason for this. This might be a good thing going forwards.
Read more about the Vanguard lifestrategy 100 equity fund performance by clicking here.
10 Year Vanguard Lifestrategy 100 vs SP 500 vs MSCI World Index
LifeStrategy 100: Any reason not to go for 100% equities?
The other reason a good investment is a relative term is because investing is a personal experience. Your circumstances, investment time-horizon and tolerance to volatility are all unique to you. This means that 100% equities may not be right for you as an individual. You need to consider the following factors:
- Is your investment time horizon less than 5 years?
- Can your finances tolerate losing money in the short to mid-term?
- Would you panic sell your investments if the value of your investments fell?
If the answer is “yes” to any of these questions, you might want to consider another fund. Panic selling is one of the most costly things you can do. This doesn’t mean all LifeStrategy Funds are out of the question. You can invest in Vanguard’s other Lifestrategy products. Whilst a 100% equities fund might not make sense, you can opt for a more balanced asset allocation.
Are The Other Vanguard LifeStrategy Funds Any Good?
The Vanguard LifeStrategy 100% Equity Fund is not your only investment strategy choice. There are a range of funds that may be more suitable for certain investors. For example, those wanting to reduce the volatility of their investments through a more balanced asset allocation.
This might be more suitable for those who are deriving dividends from the LifeStrategy Fund. You can see the other Lifestrategy products here. Vanguards Lifestrategy funds are a great way to diversify your investments. For example, the LifeStrategy® 60% Equity Fund has over 27,000 holdings!
These products are ready made portfolios that range from 20% Equities and 80% stocks to 100% equities as you know already. All funds have an on-going fee of circa 0.22%, which keeps investing costs low! Whilst the growth rates of the LifeStrategy® 100% Equity Fund will be higher than the LifeStrategy® 80% Equity Fund it will also be exposed to great volatility.
The same applies to the Vanguard LifeStrategy 80% Equity Fund vs the FTSE Global All Cap or VUSA. This is because there are fewer stocks and more bonds. The later of which usually smooth out volatility. As a general rule of thumb, the higher the bond allocation, the less volatility.
Does Vanguard LifeStrategy 100 Pay Dividends?
Yes, you can choose to reinvests any dividends with the aim of growing your investments over time or distribute any dividends to you, to take as an income. You simply need to select either income or accumulation when you set-up your fund.
Assuming you are looking for growth rather than income, then you will probably want to reinvest your dividends. This means you would be looking to invest in the Vanguard lifestrategy 100 equity a accumulation. On the other hand, if you wanted to derive an income, you would look to invest in the Vanguard LifeStrategy 100% Equity Fund A Inc.
Conclusion: Is Vanguard Life Strategy A Good Fund?
What is the conclusion to my Vanguard Lifestrategy 100 review? Well, the Vanguard LifeStrategy funds offer a relatively cheap way of getting a global, diversified portfolio with an adjustable level of risk. This is determined by the share component of the portfolio. Vanguard offers 20%, 40%, 60%, 80% and 100% equity portfolios at a very low ongoing cost of 0.22%.
The Vanguard Lifestrategy 100 offers high exposure to Global Equities. It can therefore be considered one of the Lifestrategy growth funds available with Vanguard. With a bias towards UK equities which has influenced historical performance. As such there has been an underperformance against funds which have a higher allocation towards North American equities. To caveat, this is what could be setting up the Vanguard LifeStrategy 100 fund for a spectacular breakthrough.
