Leaning heavily towards investment in the US and the UK has fueled positive returns for the Vanguard LifeStrategy 80 per cent Equity Fund.
With 40 per cent exposure to the US, 35 per cent of which is invested in equities, the fund has delivered a return of more than 18 per cent over three years, according to data from FE.
It scores highly against its peer group, the IA Mixed Investment 40-80 per cent share sector, which on average has delivered a return of 12.9 per cent since 2013.
The £550.4m fund has more than a quarter invested in the UK and nearly 8 per cent invested in Japan, with the remaining asset allocation split across European and Asia Pacific markets.
The fund management team seeks to achieve income and capital returns through a diversified portfolio comprising approximately 80 per cent equity exposure and 20 per cent fixed income.
In the first quarter of last year, the fund hit a three-year peak, returning over 30 per cent. It experienced a dip in September, but never fell far below 15 per cent throughout the whole of 2015.
Nearly 18 per cent of its holdings are in financials and 14 per cent in global bonds, while 10 per cent is allocated to consumer discretionary companies.
Its top holdings are the Vanguard US Equity Index, at 19.4 per cent; Vanguard FTSE Developed World ex UK Equity Index, at 19.3 per cent; and Vanguard FTSE UK All Share Index, at 18.2 per cent.
The minimum investment is £100 through a nominee account, and the ongoing charge is 0.24 per cent.
By comparison, the BlackRock NURS II Consensus 70 has fallen short against the 40-85 per cent mixed investment sector average, returning 9.8 per cent over three years.
The fund also peaked in the first half of last year, but delivered just over 15 per cent at its top level over a three-year period.
Around 32 per cent of the fund is invested in UK equities, with 20 per cent in global corporate fixed interest, followed by European equities, which constitute almost 11 per cent of the portfolio.
Fund manager Stephen Walker seeks to achieve a total return for investors by investing in global collective investment schemes across several asset classes, including transferable securities, money market instruments, deposits and cash.
The portfolio has 21 per cent allocated in financials, 15 per cent in industrials and 13 per cent in government bonds, and the top holding is in BCIP UK Equity Tracker at 31.6 per cent.
The minimum initial investment is £500, and the ongoing charge is 0.6 per cent.
| Vanguard LifeStrategy 80 Equity | BlackRock NURS II Consensus 70 |
| Vanguard US Equity Index Acc 19.4% | BCIF UK Equity Tracker L Acc 31.6% |
| Vanguard FTSE Developed World ex-UK Equity Index 19.3% | BCIF-BLK Os Corporate Bond Tracker 12.47% |
| Vanguard FTSE UK All-Share Index 18.2% | BCIF North American Equity Tracker 9.3% |
| Vanguard Global Bond Index Fund 14.1% | BCIF Continental Europe Equity Tracker 9.3% |
| Vanguard FTSE Developed Europe ex-UK Equity Index 6.8% | BCIF UK Gilts Al STKS Tracker 8.8% |
Adviser view
Rob Morgan, pensions and investment analyst at Charles Stanley Direct, said: “The Vanguard fund might appeal to investors who simply want a spread of assets across different markets.
“It offers cost-efficient exposure to a diversified portfolio and is automatically rebalanced to maintain a fixed-asset allocation, in this instance 80 per cent equities and 20 per cent bonds.
“Each fund in the range invests in a variety of Vanguard’s index trackers. The annual charge is currently just 0.24 per cent, so it could represent a value-for-money solution for those requiring a low-maintenance portfolio.
“The BlackRock Consensus fund aims to match a certain risk profile, according to varying weights of equities, fixed income and cash.
“The portfolio is made up of BlackRock passive funds tracking various markets, which keeps costs down. The asset allocation is designed to mirror that of the ABI Pension Sector average, which can obviously change over time.
“Given the passive approach, the cost is fairly low, with the operating cash flow being 0.64%.”
katherine.denham@ft.com
