Please help! Target Date Funds 2050

[petaaus]

Hey!

So I am very new to investing and I recently got a bit of additional income that I would like to put into EFT's.

I was recommended the Vanguard 2050 Retirement EFT however this is unavailable to purchase in Aus and so I wondered if there was something that is the same / similar but for Australia as in an EFT that rebalances itself with little input from me.

As I am a beginner I am wanting to invest in a few EFTs and then leave the money for 10+ years, I'm not looking for short term flashy gains.

If anybody could make any recommendations that would be really helpful.

Thanks so much

Peta

 

[Sean K]

Hey!

So I am very new to investing and I recently got a bit of additional income that I would like to put into EFT's.

I was recommended the Vanguard 2050 Retirement EFT however this is unavailable to purchase in Aus and so I wondered if there was something that is the same / similar but for Australia as in an EFT that rebalances itself with little input from me.

As I am a beginner I am wanting to invest in a few EFTs and then leave the money for 10+ years, I'm not looking for short term flashy gains.

If anybody could make any recommendations that would be really helpful.

Thanks so much

Peta

Sounds like you might need a financial advisor or accountant to provide you with some clear recommendations taking into consideration your overall financial position.

In regards to this ETF, is it this one that you're looking at: VFIVF ?

 

[petaaus]

Hey,

Thanks for your response, yes that was the one but it is unavailable on InteractiveBrokers.

Oh ok, is that something a financial advisor can give advice on without taking a cut of the profits themselves?

Thanks

 

[divs4ever]

Hey,

Thanks for your response, yes that was the one but it is unavailable on InteractiveBrokers.

Oh ok, is that something a financial advisor can give advice on without taking a cut of the profits themselves?

Thanks

have you tried buying it direct from Vanguard ??

Vanguard offers a range of 'wholesale funds ' ( which means you cannot trade them on the ASX )

please try to learn ( about shares/ETFs/investing ) BEFORE finding a financial advisory so you know what questions YOU need to ask

looking 25 plus years ahead ( for your target ) will give you time to learn ( good work for making that decision early )

 

[petaaus]

have you tried buying it direct from Vanguard ??

Vanguard offers a range of 'wholesale funds ' ( which means you cannot trade them on the ASX )

please try to learn ( about shares/ETFs/investing ) BEFORE finding a financial advisory so you know what questions YOU need to ask

looking 25 plus years ahead ( for your target ) will give you time to learn ( good work for making that decision early )

Thankyou so much, I am still very new to this, I'm just trying to put some money aside for my daughters future (she is currently 1).

I didn't know I can buy shares through Vanguard directly, I will look into this.

Also good advice on the financial advisor I'm just very cautious of being stitched up.

Thanks so much

 

[Sean K]

Hey,

Thanks for your response, yes that was the one but it is unavailable on InteractiveBrokers.

Oh ok, is that something a financial advisor can give advice on without taking a cut of the profits themselves?

Thanks

It's unavailable on ANZ and CMC Markets also, so it might be restricted to US investors or something else.

I've also checked Vanguard Australia's ETF Section and they don't list this ETF. So, maybe keep googling to find it, or go to the financial planner for what else might be comparable for your needs.

Most of the stuff you find on ASF is relatively short-medium term investing discussion. With a 25 year horizon you might need to invest in that financial advisor or keep researching yourself through these threads to find things that match what you're after. The ETF Forums is probably a good start.

 

[divs4ever]

Thankyou so much, I am still very new to this, I'm just trying to put some money aside for my daughters future (she is currently 1).

I didn't know I can buy shares through Vanguard directly, I will look into this.

Also good advice on the financial advisor I'm just very cautious of being stitched up.

Thanks so much

very new AND asking , that's extra bonus points

and being cautious is an excellent trait as well ( there are plenty of traps to step in )

i can't help you on a financial adviser , the corporation that provided me with financial advice ( which i didn't take ) got an unfavorable mention in the Hayne Royal Commission ( maybe if i knew the right questions back then , the outcome might have been better )

i notice your original selection looked to be heavily tilted towards US financial instruments , is that your preference over , say an Australian equivalent ( or a nation you/your daughter may move to in the future )

stay calm, there is so much to learn (i am still learning 11 years into this)

 

[InsvestoBoy]

Hey!

So I am very new to investing and I recently got a bit of additional income that I would like to put into EFT's.

I was recommended the Vanguard 2050 Retirement EFT however this is unavailable to purchase in Aus and so I wondered if there was something that is the same / similar but for Australia as in an EFT that rebalances itself with little input from me.

As I am a beginner I am wanting to invest in a few EFTs and then leave the money for 10+ years, I'm not looking for short term flashy gains.

If anybody could make any recommendations that would be really helpful.

Thanks so much

Peta

Hello @petaaus

You can learn more about Target Date funds here https://www.investopedia.com/terms/t/target-date_fund.asp

In summary the way they work is balanced around two groups of assets:

1. "Aggressive" assets like stocks and corporate bonds which tend to provide a return during good economic times and suffer during bad economic times.
2. "Conservative" assets, mostly just government bonds which are supposed to provide a return during bad economic times (although recently government bonds have not been doing very well as an asset class due to rising interest rates).

In Target Date funds the mix of aggressive and conservative is tilted one way or the other depending on how far away the target date is. They start out mostly aggressive and become more conservative over time.

e.g. a Target Date fund for 2025 might be mostly conservative assets with only a small amount of aggressive assets and will become entirely conservative as 2025 rolls around.

e.g. a Target Date fund for 2050 will be mostly aggressive assets with only a small amount of conservative assets, slowly becoming more conservative and less aggressive over time until by 2050 it's entirely conservative.

We don't have listed Target Date funds on the ASX.

But we do have funds that mix Aggressive/Conservative at varying degrees and you can just move down the spectrum slowly over time yourself.

Vanguard offers the following funds on the ASX:
VDCO (Conservative, 30% Aggressive/70% Conservative),
VDBA (Balanced, 50% Aggressive/50 %Conservative),
VDGR (Growth, 70% Aggressive/30% Conservative)
VDHG (High Growth, 90% Aggressive/10% Conservative)

There are similar offerings from BetaShares and iShares you can see in the Mixed Asset section of this link https://www2.asx.com.au/markets/trade-our-cash-market/asx-investment-products-directory/etps you can also see the above mentioned funds and click through to their sites to look at fact sheets and Product Disclosure Agreements about each of them to learn as much as you can before you put any money into one.

These sort of allocations are also very common in the Superannuation industry (if you login to your super website you can probably find an option to pick an allocation like one of the above).

A 2050 Target Date fund would be allocated to the High Growth type fund today and for the forseeable future, at least 40 years for a 1 year old. Just remember to tell your kid to move to Growth when they hit 40 years old if you want to keep matching what a Target Date fund would do.

Hope that helps.

 

[petaaus]

Hello @petaaus

You can learn more about Target Date funds here https://www.investopedia.com/terms/t/target-date_fund.asp

In summary the way they work is balanced around two groups of assets:

1. "Aggressive" assets like stocks and corporate bonds which tend to provide a return during good economic times and suffer during bad economic times.
2. "Conservative" assets, mostly just government bonds which are supposed to provide a return during bad economic times (although recently government bonds have not been doing very well as an asset class due to rising interest rates).

In Target Date funds the mix of aggressive and conservative is tilted one way or the other depending on how far away the target date is. They start out mostly aggressive and become more conservative over time.

e.g. a Target Date fund for 2025 might be mostly conservative assets with only a small amount of aggressive assets and will become entirely conservative as 2025 rolls around.

e.g. a Target Date fund for 2050 will be mostly aggressive assets with only a small amount of conservative assets, slowly becoming more conservative and less aggressive over time until by 2050 it's entirely conservative.

We don't have listed Target Date funds on the ASX.

But we do have funds that mix Aggressive/Conservative at varying degrees and you can just move down the spectrum slowly over time yourself.

Vanguard offers the following funds on the ASX:
VDCO (Conservative, 30% Aggressive/70% Conservative),
VDBA (Balanced, 50% Aggressive/50 %Conservative),
VDGR (Growth, 70% Aggressive/30% Conservative)
VDHG (High Growth, 90% Aggressive/10% Conservative)

There are similar offerings from BetaShares and iShares you can see in the Mixed Asset section of this link https://www2.asx.com.au/markets/trade-our-cash-market/asx-investment-products-directory/etps you can also see the above mentioned funds and click through to their sites to look at fact sheets and Product Disclosure Agreements about each of them to learn as much as you can before you put any money into one.

These sort of allocations are also very common in the Superannuation industry (if you login to your super website you can probably find an option to pick an allocation like one of the above).

A 2050 Target Date fund would be allocated to the High Growth type fund today and for the forseeable future, at least 40 years for a 1 year old. Just remember to tell your kid to move to Growth when they hit 40 years old if you want to keep matching what a Target Date fund would do.

Hope that helps.

Thankyou so much for this response, it is fantastic.

I will look into all of the above and keep on learning.

Thanks so much for your help - I really appreciate it