- Vanguard LifeStrategy UCITS ETFs are multi-asset portfolios that combine stocks and bonds in different proportions to cater to the spectrum of investor goals and preferences.
- Advisers can select from four LifeStrategy UCITS ETFs, ranging from 20% equity to 80% equity, each providing global diversification at a competitive annual cost of 0.25%.
- Advisers that use LifeStrategy UCITS ETFs leverage Vanguard’s multi-asset expertise and client-focused approach.
In today's rapidly evolving investment landscape, financial advisers face an ever-growing challenge. With the complexity of investment options continually expanding and the time to evaluate these options increasingly scarce, professionals are under pressure to find efficient solutions that maintain high performance standards while simplifying portfolio management.
This environment demands tools that not only meet diverse client needs but also enhance decision-making efficiency, ensuring that advisers can focus on strategic oversight and client relationships.
Vanguard’s LifeStrategy UCITS ETFs (exchange-traded funds) offer a long-term solution to these challenges with a host of potential benefits to you and your clients.
What are LifeStrategy UCITS ETFs?
Vanguard LifeStrategy is an international family of multi-asset portfolios that offer uncomplicated and cost-efficient exposure to global equity and bond markets. Our LifeStategy offerings in the UK and Europe manage a combined €51.78 billion1 on behalf of investors.
The LifeStrategy UCITS ETF range is exclusive to investors in Europe and launched in December 2020, including four portfolios that consist of Vanguard’s world-renowned ETFs. Each portfolio is defined by the proportion of equities and bonds it holds. For investors with shorter time horizons and/or a lower tolerance for risk, there is the LifeStrategy 20% Equity UCITS ETF, which holds 20% equities and 80% bonds, and the LifeStrategy 40% Equity UCITS ETF (40% equities and 60% bonds). At the other end of the risk-tolerance spectrum is the award-winning2 LifeStrategy 60% Equity UCITS ETF and the 80% Equity UCITS ETF.
Each portfolio provides access to more than 20,000 individual securities3 for an annual ongoing charges figure (OCF) of only 0.25%4 a year. That means with only one multi-asset ETF advisers can provide clients with diversified exposure to global markets at a low cost.
With Vanguard LifeStrategy UCITS ETFs, investors reap the benefits of a global leader in multi-asset solutions with more than 45 years of index-investing expertise and experience in constructing multi-asset portfolios. Vanguard’s mutual, client-owned structure in the US5 aligns our interests with those of Vanguard investors globally. As a result, investors benefit from Vanguard’s stability, experience, low costs and client focus.
The benefits of strategic asset allocation
Research has shown that asset allocation tends to have a significantly greater impact on a portfolio’s long-term performance than factors such as stock selection or market timing6. That’s why the LifeStrategy UCITS ETFs maintain a fixed exposure to global equity and bond markets – we call this strategic asset allocation, in contrast to tactical asset allocation, whereby managers can change the mix of assets freely. By taking a strategic approach to asset allocation, not only do investors have a better chance of meeting long-term financial goals, but advisers and clients also know how their capital is invested at all times.
With LifeStrategy UCITS ETFs advisers only need to establish a client’s investment goals and risk preferences to then choose the most suitable equity-to-bond ratio – and leave the rest to Vanguard.
Once the most appropriate LifeStrategy UCITS ETF is chosen, Vanguard’s investment experts ensure that the portfolio maintains the target allocation to equities and bonds, rebalancing the portfolio appropriately on a regular basis. Not only does this process save advisers time, it also helps to guard against any tendency to chase returns by choosing assets based on recent short-term performance, effectively instilling discipline.
The principles underpinning the LifeStrategy range
The LifeStrategy range has been created in accordance with Vanguard’s four principles for investment success. These are:
- Goals: investors should first set measurable and realistic goals and then develop a plan to achieve them. LifeStrategy UCITS ETFs are available in four different variants for different client objectives and risk profiles.
- Balance: after choosing the appropriate balance of equities and bonds, LifeStrategy UCITS ETFs offer global market diversification that allows clients to participate in stronger-performing markets and sectors, while offsetting the negative impact of weaker-performing ones.
- Low costs: investors have no control over markets, but one thing they can reduce is their cost of investing. Every euro spent on costs and fees directly reduces the potential returns they realise.
- Discipline: investors should always address short-term fluctuations and the emotions they provoke by taking a long-term perspective and keeping an eye on the goals that have been set. LifeStrategy UCITS ETFs are broadly diversified so that they are particularly suitable for a long-term commitment. Automatic rebalancing within the portfolios also ensures that the targeted risk profile is maintained over a long period.
Peace of mind for clients and advisers
With LifeStrategy UCITS ETFs, advisers can leverage Vanguard’s expertise in portfolio construction and management at a low cost. For clients, this means a long-term investment that is designed to meet their financial goals and timeframes.
Effective communication also promotes trust among clients. This is why we regularly provide advisers with materials to aid client conversations by keeping them informed and helping to instil confidence. For example, quarterly portfolio performance updates and regular macroeconomic insights can help you provide clarity and context for clients, while behavioural coaching tips and aids can support effective conversations with clients during difficult and even sanguine market conditions.
With LifeStrategy UCITS ETFs, not only do advisers benefit from the knowledge that their clients’ capital is in safe hands, they are also able to free up time to engage in activities that provide additional support and value to their clients.
Look out for our next blog when we explore how LifeStrategy UCITS ETFs can help advisers spend more time on the services that investors value most.
1 Source: Vanguard, as at 31 July 2024.
2 The Vanguard LifeStrategy 60% Equity UCITS ETF (EUR Accumulating) won a Morningstar Award in March 2024 in the category: Germany – Best EUR Allocation Fund.
3 Source: Vanguard, as at 31 January 2024.
4 Source: Vanguard, as at 31 January 2024.
5 Vanguard Group Inc. (VGI) is owned by Vanguard’s US-domiciled funds and ETFs. Those funds, in turn, are owned by their investors. While we cannot replicate this structure in Europe, we believe that it drives the culture, philosophy and policies throughout the Vanguard organisation worldwide.
6 For example, see Gary P. Brinson, L. Randolph Hood, and Gilbert L. Beebower, 1995. 'Determinants of portfolio performance.' Financial Analysts Journal 51(1):133–8. (Feature Articles, 1985–1994).
Investment risk information
The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.
Performance figures shown may be calculated in a currency that differs from the currency of the share class that you are invested in. As a result, returns may decrease or increase due to currency fluctuations.
Some funds invest in emerging markets which can be more volatile than more established markets. As a result the value of your investment may rise or fall.
Investments in smaller companies may be more volatile than investments in well-established blue chip companies.
ETF shares can be bought or sold only through a broker. Investing in ETFs entails stockbroker commission and a bid- offer spread which should be considered fully before investing.
Funds investing in fixed interest securities carry the risk of default on repayment and erosion of the capital value of your investment and the level of income may fluctuate. Movements in interest rates are likely to affect the capital value of fixed interest securities. Corporate bonds may provide higher yields but as such may carry greater credit risk increasing the risk of default on repayment and erosion of the capital value of your investment. The level of income may fluctuate and movements in interest rates are likely to affect the capital value of bonds.
The Funds may use derivatives in order to reduce risk or cost and/or generate extra income or growth. The use of derivatives could increase or reduce exposure to underlying assets and result in greater fluctuations of the Fund's net asset value. A derivative is a financial contract whose value is based on the value of a financial asset (such as a share, bond, or currency) or a market index.
Some funds invest in securities which are denominated in different currencies. Movements in currency exchange rates can affect the return of investments.
For further information on risks please see the “Risk Factors” section of the prospectus on our website.
Important information
For professional investors only (as defined under the MiFID II Directive) investing for their own account (including management companies (fund of funds) and professional clients investing on behalf of their discretionary clients). Not to be distributed to the public.
The information contained herein is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. The information is general in nature and does not constitute legal, tax, or investment advice. Potential investors are urged to consult their professional advisers on the implications of making an investment in, holding or disposing of shares and /or units of, and the receipt of distribution from any investment.
Vanguard Funds plc has been authorised by the Central Bank of Ireland as a UCITS and has been registered for public distribution in certain EEA countries and the UK. Prospective investors are referred to the Funds' prospectus for further information. Prospective investors are also urged to consult their own professional advisers on the implications of making an investment in, and holding or disposing shares of the Funds and the receipt of distributions with respect to such shares under the law of the countries in which they are liable to taxation.
The Manager of Vanguard Funds plc is Vanguard Group (Ireland) Limited. Vanguard Asset Management, Limited is a distributor for Vanguard Funds plc.
The Manager of the Ireland domiciled funds may determine to terminate any arrangements made for marketing the shares in one or more jurisdictions in accordance with the UCITS Directive, as may be amended from time-to-time.
The Indicative Net Asset Value (“iNAV”) for Vanguard’s ETFs is published on Bloomberg or Reuters. Refer to the Portfolio Holdings Policy.
For investors in Ireland domiciled funds, a summary of investor rights is available in English, German, French, Spanish, Dutch and Italian.
London Stock Exchange Group companies include FTSE International Limited ("FTSE"), Frank Russell Company ("Russell"), MTS Next Limited ("MTS"), and FTSE TMX Global Debt Capital Markets Inc. ("FTSE TMX"). All rights reserved. "FTSE®", "Russell®", "MTS®", "FTSE TMX®" and "FTSE Russell" and other service marks and trademarks related to the FTSE or Russell indexes are trademarks of the London Stock Exchange Group companies and are used by FTSE, MTS, FTSE TMX and Russell under licence. All information is provided for information purposes only. No responsibility or liability can be accepted by the London Stock Exchange Group companies nor its licensors for any errors or for any loss from use of this publication. Neither the London Stock Exchange Group companies nor any of its licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE or Russell indexes or the fitness or suitability of the indexes for any particular purpose to which they might be put.
For Dutch investors only: The fund(s) referred to herein are listed in the AFM register as defined in section 1:107 Dutch Financial Supervision Act (Wet op het financieel toezicht).
For details of the Risk indicator for each fund listed, please see the fact sheet(s) which are available from Vanguard via our website.
Issued in EEA by Vanguard Group (Ireland) Limited which is regulated in Ireland by the Central Bank of Ireland.
Issued by Vanguard Asset Management, Limited which is authorised and regulated in the UK by the Financial Conduct Authority.
Issued in EEA by Vanguard Group Europe Gmbh, which is regulated in Germany by BaFin.
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© 2024 Vanguard Asset Management, Limited. All rights reserved.
© 2024 Vanguard Group Europe Gmbh. All rights reserved.