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Bob Macondale
Posted: 26 June 2024 21:20:05(UTC)
#46

Joined: 24/03/2018(UTC)
Posts: 60

Thanks: 123 times
Was thanked: 152 time(s) in 43 post(s)
The Spanish Inquisition;309786 wrote:
Harry, interesting thread so thankyou for your efforts, would it be possible for you to post an annualised returns summary as in your post #41 for Vanguard SustainableLife 60-70 fund? Not so much data available yet but I've recently began a small position which I'm adding to, I like the fact that its actively run to a small degree compared to LS60.


Spanish,

In case you have not seen this, the attached link might be useful which has an analysis of the Vanguard Sustainable life 60-70 fund.

https://lt.morningstar.c...F1c6qh1t6k9default.aspx

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2 users thanked Bob Macondale for this post.
Helen L on 27/06/2024(UTC), The Spanish Inquisition on 27/06/2024(UTC)
Collie
Posted: 27 June 2024 08:29:40(UTC)
#53

Joined: 09/04/2015(UTC)
Posts: 47
Thanks for some positive data info regarding VLS 60 but i'm struggling interpreting the graphs. In post 43, for example, the y axis percentages show approximately 142% after 13 years so i'm getting an average return of 10.9%. Obviously something i'm not seeing!
Then in the later graphs , including cpi of 3% and 4% i'd expect annualized real returns to be lower but they appear higher. Also struggling to see why VLS.60 would be expected to finish where the red line is if its data had started in 1990! Again , its probably me but it does sound very positive!
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Harry Trout
Posted: 27 June 2024 09:02:24(UTC)
#54

Joined: 08/06/2014(UTC)
Posts: 1,012
Collie;309856 wrote:
Thanks for some positive data info regarding VLS 60 but i'm struggling interpreting the graphs. In post 43, for example, the y axis percentages show approximately 142% after 13 years so i'm getting an average return of 10.9%. Obviously something i'm not seeing!

The Trustnet figure of 7.1% is the annualised figure since the start, taking account of compounding

So ((1+0.071)^13)-1=1.439 or 143.9%

Hope this makes sense now?
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Collie
Posted: 27 June 2024 11:06:53(UTC)
#55

Joined: 09/04/2015(UTC)
Posts: 47
Harry Trout;309858 wrote:
Collie;309856 wrote:
Thanks for some positive data info regarding VLS 60 but i'm struggling interpreting the graphs. In post 43, for example, the y axis percentages show approximately 142% after 13 years so i'm getting an average return of 10.9%. Obviously something i'm not seeing!

The Trustnet figure of 7.1% is the annualised figure since the start, taking account of compounding

So (1+0.071)^13-1=1.439 or 143.9%

Hope this makes sense now?


Thanks, i'd forgotten about compounding! So, when Vanguard show their forecasts for the next ten years for equities and bonds for the U.K and the U.S, theyre possible returns excluding any compounding?

However, the above sum is wrong. It would be 1.03^12=1.425 or c.143%
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Harry Trout
Posted: 27 June 2024 11:50:54(UTC)
#58

Joined: 08/06/2014(UTC)
Posts: 1,012
Collie;309886 wrote:
Harry Trout;309858 wrote:
Collie;309856 wrote:
Thanks for some positive data info regarding VLS 60 but i'm struggling interpreting the graphs. In post 43, for example, the y axis percentages show approximately 142% after 13 years so i'm getting an average return of 10.9%. Obviously something i'm not seeing!

The Trustnet figure of 7.1% is the annualised figure since the start, taking account of compounding

So (1+0.071)^13-1=1.439 or 143.9%

Hope this makes sense now?


Thanks, i'd forgotten about compounding!

However, the above sum is wrong. It would be 1.03^12=1.425 or c.143%

I think it is correct. I'm taking Trustnet's 7.1% annualised return since launch (see my posts above) and compounding that for 13 years (the age of the fund since June 2011) to give me a return of 143.9% which ties to Trustnet's chart today. See "Start of Data" figure bottom right ....... ........

VLS60% 2

I'm not sure what you're doing, sorry !!
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SSJ
Posted: 27 June 2024 12:12:46(UTC)
#56

Joined: 13/09/2010(UTC)
Posts: 512
Collie;309886 wrote:
Harry Trout;309858 wrote:
Collie;309856 wrote:
Thanks for some positive data info regarding VLS 60 but i'm struggling interpreting the graphs. In post 43, for example, the y axis percentages show approximately 142% after 13 years so i'm getting an average return of 10.9%. Obviously something i'm not seeing!

The Trustnet figure of 7.1% is the annualised figure since the start, taking account of compounding

So (1+0.071)^13-1=1.439 or 143.9%

Hope this makes sense now?


Thanks, i'd forgotten about compounding! So, when Vanguard show their forecasts for the next ten years for equities and bonds for the U.K and the U.S, theyre possible returns excluding any compounding?

However, the above sum is wrong. It would be 1.03^12=1.425 or c.143%

The "12" exponent is your problem - think about maths for the return after just 1 year, or after just 2 years. The exponent is the number of years, not the number of years minus 1.
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SF100
Posted: 28 June 2024 14:20:18(UTC)
#42

Joined: 08/02/2020(UTC)
Posts: 2,254
Harry Trout;309759 wrote:
I use LifeStrategy 60% as a benchmark for my 50%:50% portfolio and a challenge I regularly pose is "why wouldn't you put all your pot in LS60?".

To aid discussion:

For those who don't wish to 'hedge' their fixed-income-duration exposure, why employ currency-hedging for same?

Would also put it out there that LS60 is potentially a 70:30, dependant on your outlook and classification of some of the bonds held within LS.

Would also highlight the favourable performance of GBP vs USD for the last 10 yrs in particular (and also over much longer term), for those wishing to spend their VLS investment in the UK (rather than holiday in $$$ lands...)
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Collie
Posted: 29 June 2024 11:00:54(UTC)
#57

Joined: 09/04/2015(UTC)
Posts: 47
SSJ;309899 wrote:
Collie;309886 wrote:
Harry Trout;309858 wrote:
Collie;309856 wrote:
Thanks for some positive data info regarding VLS 60 but i'm struggling interpreting the graphs. In post 43, for example, the y axis percentages show approximately 142% after 13 years so i'm getting an average return of 10.9%. Obviously something i'm not seeing!

The Trustnet figure of 7.1% is the annualised figure since the start, taking account of compounding

So (1+0.071)^13-1=1.439 or 143.9%

Hope this makes sense now?


Thanks, i'd forgotten about compounding! So, when Vanguard show their forecasts for the next ten years for equities and bonds for the U.K and the U.S, theyre possible returns excluding any compounding?

However, the above sum is wrong. It would be 1.03^12=1.425 or c.143%

The "12" exponent is your problem - think about maths for the return after just 1 year, or after just 2 years. The exponent is the number of years, not the number of years minus 1.



Thanks , i understand now! The exponent should also have been in the brackets with -1 outside it
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1 user thanked Collie for this post.
Aminatidi on 29/06/2024(UTC)
Aminatidi
Posted: 29 June 2024 11:55:32(UTC)
#59

Joined: 29/01/2018(UTC)
Posts: 5,865
Compound interest still fries my brain.

I look at LS60 and it "only" returning 6.7% annualised the last ten years.

But if I use Trustnet that still sees £100K turned into almost £200K over that ten years.
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Collie
Posted: 14 July 2024 10:40:01(UTC)
#50

Joined: 09/04/2015(UTC)
Posts: 47




Re: (Also added CPI + 3% & CPI + 4% lines just to give a sense of real terms returns). post #49 !




Hi, ive just come back to this again and i'm struggling to interpret the CPI 3 and 4% lines of the graph in post number #49.
So, over the timescale inflation will compound too presumably? Are these the performances of VLS60 and IA mixed investment 40-85% shares with inflation taken off showing the real returns? If so, why are they almost identical to VLS60 and IA 40-85% respectively without inflation?
Or does 4% annualised inflation need to be deducted from 6.9% annualised return (for VLS60) since the start of the data to give a real return of 2.9% annualised return? Then again, if 4% inflation compounds for 13 years i'm getting 66.5% which deducted from VLS 60's 7.1% over 13 years (143.9% compounded) = 77.4%

Thanks in advance for any help!
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