Following the communication earlier this week regarding discipline being one of an investor’s greatest ‘weapons’ we thought it would be beneficial to impart some of the very latest information provided by Vanguard to the United Kingdom’s adviser force via a webinar on 26th March 2020.
As we previously stated, the ability to ‘sit tight’ in uncertain financial times has never been more important and this is borne out by some of the empirical evidence provided by Vanguard.
The majority of our clients invest within a cautious to moderate or moderate environment utilising Vanguard’s LifeStrategy range of funds.
Between the 1st January 2020 and 24th March 2020 the LifeStrategy40% Equity Fund has demonstrated losses of 7.7% with the sector average showing losses of 16.2%.
The LifeStrategy60% Equity Fund has shown a loss of 11.8% against a sector average of 19.4% over the same period.
Although losses are not a desirable outcome the fact that the LifeStrategy funds are significantly outperforming their peers is very encouraging and testament to Lifetime’s investment principles.
It is also vital to once again stress the importance of having the discipline to wait for recovery if at all possible. Information provided by Vanguard on Thursday (26th March) provides reassurance in this regard.
At the height of the financial crisis (December 2007 to February 2009) the back-tested LifeStrategy40% showed maximum losses of 14.54%. The recovery time for the fund following that time period was 6 months. The LifeStrategy60% fund showed back-tested maximum losses of 21.80% and took a slightly longer 9 months to recover. If nothing else this demonstrates the need for patience.
Of course, if you have any questions or concerns please do not hesitate to contact your adviser directly who I’m sure will be happy to address them.
Rupert Smith – Director (Chair of Investment Committee – Lifetime)