In my defence, I wrote £100, not £1,000. It’s not necessarily pointless.. LifeStrategy 100% looks good but I've read that it's over-indexed in the UK. Check out the Vanguard FTSE Global All-Cap fund. GB00B545NX97:GBP. 2) Most people are already over exposed to the country that they live in – the job they work in is dependent on the country doing well, their house price is dependent on the local economy, etc. However, that is not always the case, as a higher turnover can mean cutting dead weight stocks and buying better stocks (momentum-like) more regularly. All Cap appears to have more turnover than All World and less than a momentum fund – flatly, this is what we'd expect so is consistent at least. Portfolio overview for Vanguard LifeStrategy 100% Equity Fund A Acc (GB00B41XG308) plus latest price and performance data, dividend information, expert insights and more. If yes, go down the route and pick the stocks. GB00B545NX97:GBP. The Vanguard LifeStrategy® 100 (LS100) and the FTSE Global All Cap Index Fund (FTSE All Cap) appear to be very similar on first glance but fundamental differences exist between the two. Contrast this to the actual market cap weight of the UK at around 5.5% of the global economy and we can see there is a home bias here. Unless you step in every few months, your asset allocation could become increasingly out of line with your original intentions as prices fluctuate. But ,then I’ve seen the Vanguard momentum fund you’ve mentioned, and there is a lot of talk on forums about the Fidelity Allocator World Fund Y and HSBC FTSE All-World Index Fund C (though the All Cap looks more diversified which is what I am looking for). Would it be worth investing 60% of my money into the LS60 and the remaining 40% into the global all cap? 0.01% of £100,000 is £10/year, not £1000;). Is there any harm to this approach at all ? If not and like the rest of us you admit you have no edge, sticking to index trackers for 99%+ of your investment choices is the wisest play. What platform are you currently using to invest? There are two typical ways that tracking error is calculated; the most traditional way is the approach you mention, comparing historical returns (backward-looking) whereas the other method would be by comparing predicted future returns (forward-looking). Portfolio overview for Vanguard LifeStrategy 100% Equity Fund A Acc (GB00B41XG308) plus latest price and performance data, dividend information, expert insights and more Do you think I am over-thinking this and that a 90% entry into FTSE All Cap and a 10% entry into the Vanguard Global Bond Index Fund is enough for my needs? UK investor has a 30%~ home bias in their portfolio, How to invest your first £1,000. You’re right, investing more in your home country should help avoid currency risk, but then you may be overexposed to one country. You note that you wish to invest in individual stocks. Change ). I also note the turnover rate of the fund is 55%. feel free to drop me a line using the contact form and we can continue this chat via email. I just opened both a Vanguard LifeStrategy 80% Equity Fund and Vanguard FTSE Global All Cap Index Fund as my main two investment portfolios. With FTSE All Cap you get a lot more transparency in regards to how it will be shaped in the future. The GAC seeks to accurately reflect this, whereas the LS100 does not. Specifically, WHY and HOW can you justify this? Thank you for a very helpful, article as I have been considering these two funds to open my first investment with. I am not qualified or licensed to give financial advice. What about looking at a fund that we expect to have an abnormally high turnover, say a momentum fund? For instance, a change in the fund’s asset base (the turnover ratio’s denominator) can give a false impression of a fund’s trading activity without manager having changed the trading pace. I got here from a reddit post as I’ve been trying to narrow down my options since I started down this path through JL Collins’ Simple Path to Wealth guide. After reading the reddit forums and digging a little deeper, I’ve bottled it a little bit, and opened a FTSE Global All-cap (put £500 in, and started up £100 direct debit per month) Outflows and inflows into a fund can drive the change within the turnover ratio as the fund manager needs to purchase/sell the underlying holdings”. Simply set and forget? Thanks for the kind words. As we have been talking about Vanguard specifically, their ISA stops being the lowest cost option if you have an ISA of greater than £30,000. From my basic understanding (as very new to this world of investing), the turnover rate of 55% does not necessarily project negatively on the All Cap? The All Cap is my top choice fund to open currently, having been swayed through my reading from the LifeStrategy 100%. Find basic information about the Vanguard Lifestrategy 100% Equity Fund A Acc mutual fund such as total assets, risk rating, Min. However, there are obviously plenty of other choices. Was just wondering what percentage of investment I should be putting into both. Vanguard’s global all cap, which I own in my SIPP, only samples the constituents (c.4k of c.7k), so Vanguard’s global small cap has about the same *number* of underlying shares (c.4k). FTSE All Cap has the simplest objective of the two and simply aims to track the FTSE Global All Cap Index as closely as possible. – The FIRE Shrink, https://twitter.com/benjaminluk/status/1263606245774131200, https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F000003VEC, https://monevator.com/how-hedging-your-shares-against-currency-risk-can-boost-returns/. As long as you’re investing in one of them, you’ll be just fine! Essentially, most investors will feel an affinity for their home market and will want to invest in what they know. The Vanguard LifeStrategy® 100 (LS100) and the FTSE Global All Cap Index Fund (FTSE All Cap) appear to be very similar on first glance but fundamental differences exist between the two. – Mr Fox. Your suggestion of 90% All Cap and 10% Global Bonds is, in my opinion, a much cleaner choice than utilising LS80 and All Cap together. The fund is actively managed; an investment adviser has discretion in which funds the LifeStrategy 100 invests in and the relative allocations. All in all, I personally feel that All Cap is a solid fund to choose and use if you want a Global All Cap tracker. Now I am not advocating copying this mindlessly, as everyone’s situations differ widely, but it can be helpful to see exactly what other people are doing and the whys behind it. Therefore I was intending to invest 50% of my annual savings budget into a Vanguard SS ISA FTSE Global All Cap Index Fund and 50% of my annual savings budget into a LifeStrategy 80 fund. It really depends, why did you choose these two funds? If you wanted some bond exposure, but thought that 20% was too much, then it may have been better to put 85% to the GAC and 15% into a dedicated bond fund. Handily this information is available from Vanguard directly: https://www.vanguard.co.uk/adviser/adv/detail/mf/overview?portId=8617&assetCode=EQUITY##performance and can even be exported as a spreadsheet if you want to dig deeper into the numbers. What’s even better is that we have this choice- and can choose as we see fit, rather than just have to pick without the choice. Agreed – when/if I do add some bonds to my portfolio, I won’t be selling all of my GAC and moving to LS80. However, you would have to manage the two funds yourself as the prices of both rise and fall. In books like Investing Demystified, it is recommend that you should own shares in all of the market’s stocks, weighted according to their fraction of the overall value of the market (the author of the book, Lars Kroijer, explained his reasoning in an excellent post over at Monevator). For example, £500 initially and £100 a month thereafter. is a third fund that exists called ‘FTSE All-World ETF’. You can always change your mind later! This roll includes everything Mrs Fox and I have obtained for free! As you note, the fund is fairly new so we do not have much historical data to work with, but we have enough to generate some potentially useful data. You’ll have to vaguely pay attention, to make sure the asset allocation doesn’t stray too far off course. Your current overall allocation is 85% equites and 15% bonds. As a rule of thumb you should expect turnover rates to be between 0% and 100% and an index fund should usually fall below 30%. I thought I could tidy them up and post them on the blog. The LifeStrategy fund has no benchmark. I have to confess, I did contribute to both the LS100 and the FTSE GAC for a short time, before deciding to contribute solely to the GAC. You might decide to invest 80% of your portfolio in the GAC and the remaining 20% in a bond index (for example, Vanguard’s Global Bond Index Fund. Supposedly everything is priced in already. Should I just pick one?? (Vanguard actually provide their own tracking error estimate on that link at 0.15% for the past three years, which I mostly agree with as you’ll read below). GB00B41XG308:GBP. on LifeStrategy 100 vs FTSE Global All Cap – FIGHT! The FTSE 100 make their money globally not solely in the UK. Of course the total costs are a key component to choosing a fund. ( Log Out /  I do think you are correct in saying you’re over thinking it. As the article suggests, there isn’t much in it! Each of the five LifeStrategy funds holds over 1,000 assorted securities. Vanguard do not charge a commission on trades so you could freely switch your LS100 holdings into FTSE Global All Cap. Ultimately, if choosing solely between these two, then I think the GAC makes the most sense. LS100 sits around 7% and FTSE All Cap is in the region of 10%. Rather paradoxically this falls under a similarity and a difference at the same time. Vanguard LifeStrategy 100% equity fund, a full on 100% equities; ... unlike Vanguard’s FTSE Global All Cap index fund, and I’m fine with that. Vanguard's FTSE All World ETF (ticker:VWRL) which tracks the FTSE All World Index has a turnover rate of -11.4%. Lifestrategy funds were around before FTSE Global All-Cap. The fund seeks to track the performance of the FTSE Global All Cap Index. This index uses market capitalisation to determine allocation and is entirely passive in its method of doing so.