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Vanguard Lifestrategy 80: Opinions and Reviews

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Vanguard Lifestrategy 80: Opinions and Reviews

Co-founder of Affari Miei

February 28, 2024

Vanguard Lifestrategy 80 (ISIN: IE00BMVB5R75) is a passively managed fund offered by Vanguard and which is part of the gamma Vanguard Lifestrategy.

Today we will analyze this in detail ETF which, among the four proposed by the Vanguard range, is the riskiest since it invests 80% of its assets in shares.

We will start by analyzing the KID (Key Investor Document) and thus we could investigate all its main features, including costs, advantages and disadvantages.

At the end of the article you will also find mine opinions about.

This article talks about:

A few words about Vanguard

Vanguard is an investment company founded in 1975 in the United States: it is a very famous company in the world and above all highly listed, since it recently also won the morningstar award for being the best management house of 2023.

It was founded on a revolutionary, albeit simple, idea, namely that an investment company should manage its funds in the exclusive interest of its clients, supporting them in achieving their goals through simple, low-cost investments.

Therefore, the Group’s interests are in line with those of investors.

Thanks to his portfolio widely diversified, Vanguard has become the second largest ETF provider in the world. In 2012 it began launching ETFs in Europe.

Here you can learn more about its entire ETF offering.

Lifestrategy: what are we talking about?

It’s about a investment strategy which puts it at the centre 4 ETFs of ETFs. They are portfolios that aim to offer value to investors.

This way an investor can access low-cost and well-diversified multi-asset investment solutions.

I talked about it in great depth here.

Vanguard LifeStrategy 80% Equity UCITS ETF: Caratteristiche

The fund in question has a large size of 364 million euros and was listed at December 2020. It is therefore a fairly recent fund.

There is no fixed maturity date for the fund, although it may be terminated in certain circumstances, such as if the value of the fund’s net assets falls below $100 million.

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The objective of the ETF is to achieve a combination of capital appreciation in the long period against a certain level of income, investing in fixed income and equity securities.

The replication method is physical and has no currency hedging.

The domicile of the fund is in Ireland.

The umbrella fund Vanguard LifeStrategy 80% Equity invests in various ETFs globally. About the80% of assets are invested in equity securities of developed and emerging markets. The remaining 20% ​​is invested in bonds. The issuers come from developed and emerging markets, but the bonds are either denominated or hedged in Euros.

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The benchmark

The fund pursues an investment strategy a active managementaccording to which the investment manager is free to choose the composition of the portfolio holdings, and is not managed on the basis of a reference parameter.

However, the fund is managed through pre-determined asset allocations into equity and fixed income securities using a combination of underlying collective investment schemes.

The composition

As we have already mentioned, the fund intends to achieve its investment objective with exposure to a diversified portfolio which is composed of 80% of its value by equity securities and the remaining 20% ​​by fixed income securities.

Since this is an ETF of ETFs, it means that the fund itself invests in other ETFs.

But what are they?

I attach the screenshot directly from KID so you can have a complete list of ETFs which are part of the basket with their relative percentage weights:

As regards the geographical and sectoral composition I attach the graphs taken directly from the official Lifestrategy prospectus, so you can have a detailed overview:

The risk

The risk profile for this ETF is equal to 4 on a scale ranging from 1 to 7. It is a medium/high risk that fits into the natural logic, given that it invests mainly in shares.

Distribution Policy

This ETF pursues an ad distribution policy accumulationi.e. the coupons are reinvested in the fund itself and are not distributed to investors.

However, I can tell you that if you are looking for an income fund, and therefore need the distribution of periodic coupons, you can also find this Lifestrategy ETF in the category distributioncon ISIN IE00BMVB5S82.

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The costs of Vanguard LifeStrategy 80

We now come to the costs of the fund.

In this case we have no subscription commission, nor exit costs.

The management fees amount to 0.25% of the investment value per year.

I transaction costs instead they are 0.06% of the value of the investment per year, and refer to the costs incurred to buy and sell investments underlying the fund.

The recommended holding period is 5 years,

Historical returns

Bearing in mind that the past performances However, they cannot tell us how much it will yield in the future because past returns are not predictive of future ones, let’s see some data.

The fund has only been active since the end of 2020, so we don’t have a lot of data.

I can tell you that in 2021 the fund achieved a performance of 16.93%, while in 2022 (a difficult year for all markets) it recorded a negative -6.06%. 2023 was again a positive year, with returns rising to 11.92%.

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Affari Miei’s Opinions on Vanguard LifeStrategy 80

It is best to choose this fund which is part of the gamma Vanguard Lifestrategy?

First of all, I always remind you that, before investing, you need to be very clear on your own strategy and the risk profile that characterizes us: only then, with this data available, could we better understand how to move and what to do to invest as much as possible and obtain interesting returns.

My suggestion is to always invest in long periodalso because the LifeStrategy range also thinks in the long term.

But who is this fund aimed at?

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I can tell you that this solution is suitable for passive investors, for those who are interested in build a PAC and also for those who perhaps have limited capital and therefore do not want to buy too many different instruments: in this way, with an ETF they will be able to have many in a basket, all together and at the same time reduce costs.

Vanguard is a serious group and therefore the fact that it offers a new range of ETFs is an added value: I advise you to keep an eye on these instruments and try to understand if you can include them in your portfolio to diversification: this is truly a very interesting solution, which in my opinion should be controlled and monitored.

That said, I think the ETF Vanguard are advantageous, and what we have just analyzed I believe can meet the needs of an investor looking for interesting capital growth.

If you are looking for ideas for building your portfolio I recommend you read here.

Before investing, increase your knowledge

Before choosing the instrument for investing, you need to collect information and data: it is essential to best define your investment strategy, focusing on your objectives and your profile as an investor.

Without it, you won’t go anywhere.

Before saying goodbye, I’ll give you the opportunity to download a report containing 3 ETFs for free to start investing: it could be a first step towards the world of investments if you are interested in these tools.

If you are at the beginning of your investment journey and don’t have the basics, here are some guides designed for you:

I also suggest a route of guide that I have developed for you to delve into the financial and investment reality in a broad way:

Happy continuation on Affari Miei, see you soon!

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