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This includes a huge weighting in favour of China at 31.4%, followed by Taiwan at 12.4%. The split between bonds and equity will depend on which year you choose. For example, if you opt for a super long-term plan, then most of your portfolio will be placed in equities.<\/p>\n<\/p>\n
However, as far as active funds go, the LifeStrategy is about the most passive form of active management you can get. The minimum investment levels and reinvestment options are the same for all three funds. As Vanguard will be conducting the execution on your behalf, you don\u2019t need to worry about the different execution methods. There\u2019s also no trading commission on ETFs when using the Vanguard platform, and both ETFs and index funds are equally easy to make repeat investments into. Our heritage in active fund management dates back to the year we were founded \u2013 1975. For almost half a century we have strived to provide long-term alpha at a cost that represents value to investors.<\/p>\n<\/p>\n
Currency exposure has proved to be a great help to sterling-based global investors over the last 9 years, but it won\u2019t always be the case. Starting with the similarities between all three funds, they\u2019re all unhedged. This means all three will be affected by currency fluctuations in the value of sterling. Particularly in the value of sterling versus the US dollar, given that the US makes up such a large portion of the global market.<\/p>\n<\/p>\n
Although Vanguard UK funds are attractive to most investor profiles, there are also some risks and drawbacks to consider. Across most of its 80+ UK funds, Vanguard has a fixed minimum investment amount of \u00a3500. You can also elect to set up a direct debit at just \u00a3100 per month. The latter is especially useful if you simply want to put a bit of money to one side at the end of each month. UK Vanguard funds are jam-packed with financial instruments that you as an everyday investor would find it difficult to reach. For example, while you can easily buy UK Gilts or US Treasuries, you likely won\u2019t be able to get your hands on bonds issued by the government of Kenya, India, or Brazil.<\/p>\n<\/p>\n
As the VWRL ETF has UK reporting status, it brings its tax treatment more into line with the other two funds. So that\u2019s great if you\u2019re investing into VWRL from outside a tax wrapper \u2013 it means you won\u2019t get slapped with a huge 45% tax bill when you sell. However, given all three funds have similar tax treatment, it doesn\u2019t help when trying to choose between them. UK individual investors in offshore funds are taxable on their investment gains at rates of either 20% or 45%. The lower tax rate is only available to individual investors in funds with UK reporting status.<\/p>\n<\/p>\n
The costs reflect the passive strategy used in these funds, with an ongoing charge on all five funds of just 0.22%. The reason Vanguard is so popular with UK investors is because of the wide range of funds available. This manager makes decisions on what the fund invests in based on market research, data analysis, expense ratios, and, naturally, their own investment prejudices.<\/p>\n<\/p>\n