Investing is all about the long term for the best probability of a good result. Investors therefore need a sound strategy which will provide them with every chance of lasting the course or ‘staying in the game’.
It is just over one year since I purchased VLS 60 for the first time. This represented a shift in strategy on several fronts -
A move to funds rather than shares and/or investment trusts,
A move towards passive index rather than actively managed, and
A move to selling units to provide ‘income’ rather than taking the natural yield
The LifeStrategy range of funds were launched on 23rd June 2011 and therefore now have a 5 year performance which can be compared to other funds.
Last week, I had a brief look at Trustnet’s Multi manager & Mixed Asset tables to compare the performance over the past 5 years since launch.
I was pleasantly surprised to see that the Lifestrategy range all performed well compared to other funds in the same sector. In fact the LS20 was the #1 fund out of 146 funds listed in the 0 - 35% equity section and all funds were in the top 10%.
Here is a brief table listing the 5 yr performance of each fund and I have included a couple of other Vanguard funds and also a selection of my investment trusts by way of comparison. (The figures for the LS returns are taken from the Vanguard site). I must say I was a little surprised to note how well the UK government bonds have done in recent years.
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Of course, five years is not such a long time over which to draw firm conclusions but at the same time, I think it is probably long enough to give me confidence to suggest my change of strategy last year is looking like a sensible move.
For me, and I am sure many other small investors, the appeal of the VLS strategy is its simplicity combined with low volatility compared to pure equities. At the same time it offers a good total returns for the level of risk involved compared to other strategies.
I intend to reallocate further investments between the VLS60 and possibly VLS40 over the coming year.