Hi everybody, I hope my query might be of curiosity for this subreddit.
I used to be trying out the allocations of Vanguard Lifestrategy UCITS funds and confronting them with the identical merchandise for the UK buyers.
What I discovered is that the Lifestrategy merchandise for UK have a heavy fairness dwelling bias. Check out for instance the 100% equity or the 40% equity: greater than 25% of equities are allotted in UK, a share far larger than the one given by capitalization weights.
Instead, the identical Lifestrategy merchandise for the European buyers have a basic capitalization weight allocation for the fairness half, as it may be seen in web page 4 of this pdf and thus the European a part of equities is < 15% of equities portfolio.
Why do you suppose there may be such a distinction? Why there’s a fairness dwelling bias for the UK however not for the European investor?
I’m not evaluating the bond elements as it’s identified that the fastened revenue a part of the portfolio needs to be hedged within the dwelling forex.