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Would love some thoughts on my desire to move away from Vanguard investing

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
BigB
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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409501

Postby BigB » May 5th, 2021, 10:22 am

Arborbridge wrote:
turnaround wrote:
Arborbridge wrote:
Could I ask which fund you mean by this? Could you tell me the code - I get pretty mixed up looking at Vanguard as there are just so many funds!

Thanks.


47% in FTSE Global All Cap Index Fund Accumulation
43% in LifeStrategy® 80% Equity Fund - Accumulation
10% in Emerging Markets Stock Index Fund - Accumulation

Ill probably move all 100% into the FTSE GLobal All Cap as im no longer extra bullish on UK and ill seek my EM diversification in the new platform (currently thinking Halifax might be good idea if i understand their fee structure correctly).


So Im still a bit confused - this Global Fund is not the same as VWRP or VHYL, then - but i'm not sure what the difference is as they look like they invest similarly.

I need to make a decision in the next few days as I am advising my daughter who wants a fit and almost forget option. I'd been thinking of VWRP or FCIT being suitable. (Sorry, not wanting to highjack your thread, but just wondered what the difference was between your global fund and the VWRP I had in mind)

Arb.


I had a quick skim of the Vanguard fund pages and the 2 funds' investments look very similar. Only obvious/notable difference to me is that Global All Cap includes small companies as well as Med/Large. All World just says Med/Large. This can be seen in the portfolio analysis - 6895 entries in Global All Cap vs 3550 in the All World. Sector and Geography splits very similar.

All World for me - investing in smaller companies would be a specific separate thing for me, for which there are funds and indexes.

B

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409506

Postby AleisterCrowley » May 5th, 2021, 10:38 am

Arborbridge wrote:
AleisterCrowley wrote:
Arborbridge wrote:

And some private investors do much more badly! ;)
I'm not particularly thick or disorganised, but my feeling after being in the game since 1986 is that I find it difficult or impossible to consistently "outrun" professional active fund managers. Therefore I would not dismiss them lightly.

Arb.


But.... professional fund managers find it difficult to consistently "outrun" the index.


Quite, that's why I'm thinking of a global tracker for my daughter. She's a classic case where it would be the best option, just to get her investing and not overwhelm with having to think about opening the can of worms we've all been through.

Arb.


Yep, wish I'd gone for a simple cheap global tracker 20 years ago when I started!
I guess the 'journey' has been interesting..

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409516

Postby mc2fool » May 5th, 2021, 11:11 am

turnaround wrote:I could of course do something like: open another cash ISA, put 5-6k there (from this years allowance), transfer it to Vanguard so i have 50k there, then use last years 9k cash ISA, transfer it into a new S&S ISA then do my remaining 15-16k from this years allowance there (or something to that effect, unclear if i can do partial cash ISA transfers into S&S) so that i have an even higher weighting to global tracker to counteract the more riskier themed investments.

You can't do that. You can only subscribe new money into one of each type of ISA each year, and a transfer of new money from one type of ISA to another counts as that money being subscribed to the receiving type of ISA.

"Investors cannot subscribe to 2 (or more) cash ISAs, 2 (or more) stocks and shares ISAs, 2 (or more) innovative finance ISAs, or 2 or more Lifetime ISAs in the same tax year.

Where the investor transfers current year subscriptions from one type of ISA to another the subscriptions are treated as if they were made to the receiving ISA. For example, if current year stocks and shares subscriptions are transferred to a cash ISA, they are treated as if they made to the cash ISA so the investor is free to subscribe to a stocks and shares ISA following the transfer - subject to the overall subscription limit.
" https://www.gov.uk/guidance/who-can-invest-in-an-isa-if-youre-an-isa-manager

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409530

Postby turnaround » May 5th, 2021, 12:16 pm

mc2fool wrote:
turnaround wrote:I could of course do something like: open another cash ISA, put 5-6k there (from this years allowance), transfer it to Vanguard so i have 50k there, then use last years 9k cash ISA, transfer it into a new S&S ISA then do my remaining 15-16k from this years allowance there (or something to that effect, unclear if i can do partial cash ISA transfers into S&S) so that i have an even higher weighting to global tracker to counteract the more riskier themed investments.

You can't do that. You can only subscribe new money into one of each type of ISA each year, and a transfer of new money from one type of ISA to another counts as that money being subscribed to the receiving type of ISA.

"Investors cannot subscribe to 2 (or more) cash ISAs, 2 (or more) stocks and shares ISAs, 2 (or more) innovative finance ISAs, or 2 or more Lifetime ISAs in the same tax year.

Where the investor transfers current year subscriptions from one type of ISA to another the subscriptions are treated as if they were made to the receiving ISA. For example, if current year stocks and shares subscriptions are transferred to a cash ISA, they are treated as if they made to the cash ISA so the investor is free to subscribe to a stocks and shares ISA following the transfer - subject to the overall subscription limit.
" https://www.gov.uk/guidance/who-can-invest-in-an-isa-if-youre-an-isa-manager


ok understood, thanks! thought it was more about opening rather than subscribing. but that makes sense i guess.

maybe im just over thinking all of this and should just continue to focus on 1 global tracker only and only start thinking about other investments once i have more cash than i can put in ISA wrapper / over contributions into pension....

mc2fool
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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409539

Postby mc2fool » May 5th, 2021, 12:58 pm

turnaround wrote:
mc2fool wrote:
turnaround wrote:I could of course do something like: open another cash ISA, put 5-6k there (from this years allowance), transfer it to Vanguard so i have 50k there, then use last years 9k cash ISA, transfer it into a new S&S ISA then do my remaining 15-16k from this years allowance there (or something to that effect, unclear if i can do partial cash ISA transfers into S&S) so that i have an even higher weighting to global tracker to counteract the more riskier themed investments.

You can't do that. You can only subscribe new money into one of each type of ISA each year, and a transfer of new money from one type of ISA to another counts as that money being subscribed to the receiving type of ISA.

"Investors cannot subscribe to 2 (or more) cash ISAs, 2 (or more) stocks and shares ISAs, 2 (or more) innovative finance ISAs, or 2 or more Lifetime ISAs in the same tax year.

Where the investor transfers current year subscriptions from one type of ISA to another the subscriptions are treated as if they were made to the receiving ISA. For example, if current year stocks and shares subscriptions are transferred to a cash ISA, they are treated as if they made to the cash ISA so the investor is free to subscribe to a stocks and shares ISA following the transfer - subject to the overall subscription limit.
" https://www.gov.uk/guidance/who-can-invest-in-an-isa-if-youre-an-isa-manager

ok understood, thanks! thought it was more about opening rather than subscribing. but that makes sense i guess.

Yeah, a lot of places say you can only open one of each type of ISA each year when they actually mean "put new money into" (subscribe), which can lead to confusion. ;)

One other thing to note is that if you transfer from one ISA to another you must transfer the whole of any current year subscriptions you've made to the source ISA to the target one (and that makes sense if you consider the point above).

You are allowed, however, to do partial transfers of "old" funds (previous years subscriptions) -- assuming your ISA provider(s) allows it. I've seen that some cash ISAs have all or nothing conditions for transfers. I don't believe I've ever seen that with S&S ISAs though.

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409564

Postby AleisterCrowley » May 5th, 2021, 2:29 pm

Ah, ISA rules... I still get confused
I wasn't sure if I could open two new Cash ISAs last (tax) year with transfers in only
I figured i could, and I did, as I hadn't paid into either source ISA in that tax year

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409602

Postby XFool » May 5th, 2021, 4:27 pm

AleisterCrowley wrote:Ah, ISA rules... I still get confused
I wasn't sure if I could open two new Cash ISAs last (tax) year with transfers in only
I figured i could, and I did, as I hadn't paid into either source ISA in that tax year

You can.

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409617

Postby mc2fool » May 5th, 2021, 4:56 pm

AleisterCrowley wrote:Ah, ISA rules... I still get confused
I wasn't sure if I could open two new Cash ISAs last (tax) year with transfers in only
I figured i could, and I did, as I hadn't paid into either source ISA in that tax year

And you also could have even if you had paid into one of the source Cash ISAs in that tax year, provided that you transferred the entirety of that "new" money into the target Cash ISA.

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409619

Postby AleisterCrowley » May 5th, 2021, 5:01 pm

..but not paid into either of the new ones

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409626

Postby Adamski » May 5th, 2021, 5:24 pm

turnaround wrote:Tech (thinking ATT or PCT) - 30-40%
Healthcare / Biotech (Ishares Healthcare Innovation DRDR? BIOG?) 10-15%
Automation & Robotics (Ishares RBOD?) 10-15%
Water (L&G GLGG / Ishares IH20?) 10-15%
EV-Driving Tech (Ishares ECAR / Wisdom Tree CHRG?) 10-15%
Mining / Commodities (VanEck GDIG?) 10-20%
China exposure 10-20%


Hi there, I'd have Value on the list instead of Tech. Value is outperforming (for now at least whilst we are existing the pandemic). Cheers, Adam

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409628

Postby xeny » May 5th, 2021, 5:25 pm

turnaround wrote:
maybe im just over thinking all of this and should just continue to focus on 1 global tracker only and only start thinking about other investments once i have more cash than i can put in ISA wrapper / over contributions into pension....


Look at what pension options you've got open to you, and what your goals are - depending on when you want/need access to the money, and where you're likely to stand with your various pension allowances, you can get a useful boost in return from pension tax advantages, albeit at the cost of not having access until you're older.

I'm in the situation that my employer lets me make AVCs, but only into a series of "tilted" trackers - so ESG biased, Sharia compliant,EM or global equity. On the positive side they cover all the fees and the contributions are salary sacrifice, so no NI paid on them.

This means I have a global tracker in my pension, and put money I want to invest with a bias in my ISA, simply because that is most economical, and I've got enough outside the pension to meet my needs until I am old enough to have access to the pension.

If I had more flexibility in what I could invest in my pension, I'd choose to put the more volatile investments in there, and the boring global tracker in the ISA, simply so as the ISA potentially has a shorter investment horizon, I'd rather have the somewhat less volatile investments there, just in case I need to access any of it in a hurry.

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409633

Postby mc2fool » May 5th, 2021, 5:53 pm

AleisterCrowley wrote:..but not paid into either of the new ones

....until after the transfer of the one you had paid into is complete and you pay just into that new one (subject to overall limits of course) :D

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409680

Postby turnaround » May 5th, 2021, 9:38 pm

xeny wrote:
turnaround wrote:
maybe im just over thinking all of this and should just continue to focus on 1 global tracker only and only start thinking about other investments once i have more cash than i can put in ISA wrapper / over contributions into pension....


Look at what pension options you've got open to you, and what your goals are - depending on when you want/need access to the money, and where you're likely to stand with your various pension allowances, you can get a useful boost in return from pension tax advantages, albeit at the cost of not having access until you're older.

I'm in the situation that my employer lets me make AVCs, but only into a series of "tilted" trackers - so ESG biased, Sharia compliant,EM or global equity. On the positive side they cover all the fees and the contributions are salary sacrifice, so no NI paid on them.

This means I have a global tracker in my pension, and put money I want to invest with a bias in my ISA, simply because that is most economical, and I've got enough outside the pension to meet my needs until I am old enough to have access to the pension.

If I had more flexibility in what I could invest in my pension, I'd choose to put the more volatile investments in there, and the boring global tracker in the ISA, simply so as the ISA potentially has a shorter investment horizon, I'd rather have the somewhat less volatile investments there, just in case I need to access any of it in a hurry.


thanks thats an interesting take. go more risky with pension due to longer time horizon. i agree, whilst i said ~20-30 year time frame for ISA it could be ~10-15. My main potential outlay that i forsee would be private school for kids that id want to seek...but who knows they could get into grammar etc. i dont care about bigger houses or anything like that...

guess i could take another look at what i have in my pension. its one of those standard corporate provided Fidelity plans

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409698

Postby AshleyW » May 5th, 2021, 10:54 pm

During my 40 years or so of investing I tried many different styles but if I were to able to start again I would keep it simple and low cost - this rules out Vanguard´s platform as there are cheaper and more versatile platforms - I would have a look at IWeb, £5 dealing charge for shares and funds and no other charges apart from a joining fee and hopefully as part of Halifax it isn´t a giant Ponzi scheme!- but I don´t think there´s a facility for regular contributions. Then I would go for a global ETF or fund depending on your preference, MSCI or FTSE All World or developed - there doesn´t seem to be much difference in performance and perhaps Developed World will be a bit cheaper. I would also be inclined to go 50% with a World ESG as I suspect they will out-perform in the long term - but only time will tell. The Uk content of all these indices is only around 5% and if this worries you add in a FTSE All share tracker. The only other consideration is whether to go hedged or un-hedged - evidence is that it is marginally worthwhile for UK investors - I go unhedged as I spend a fair amount of the year outside the UK plus all my bond holdings are gilts so I overall the portfolio is fairly neutral currency wise but it's not always clear if the ETF or fund is hedged or not - Vanguard can be pretty opaque in this respect.

Do set yourself an annual portfolio target so you can see how well you are doing. I put a 30-year plan on a spreadsheet with a target based upon my target retirement income assuming a 4% drawdown and inflation-adjusted. In 15-20 years before your target retirement, you´ll need to start adding some government bonds. 30-40% seems to be the right amount for the UK retiree today but this may all change in 20 years!

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409705

Postby Hariseldon58 » May 5th, 2021, 11:28 pm

@turnaround

We all have an interest in investing on these boards , we feel we have to do something.

The thematic approach is easy to sell, but realistically it’s unlikely to add value over the years.

The less you do the better, it doesn’t matter if you go for OEICs or ETFs, the latter tend to be cheaper on many platforms.

It could be ETFs like Vanguard All World, or a combo of Vanguard Developed World plus Emerging Markets or the equivalent fund Vanguard Global All Caps, you can add a small portion of smaller companies or Vanguard Life Strategy 100 with its increased UK representation..you could use iShares equivalents.

None of it will make a huge difference, the main thing is to invest and give it time whilst doing as little as possible.

You could take the alternative route of good global Investment Trusts, the end result would be about the same, the use of gearing often offsets the slightly higher costs.

The killer of returns is trading too much, chasing the hot hand, overthinking it.

The biggest obstacle you face is your own emotions.

I have been guilty of all these things and still spend too much effort tweaking a portfolio for modest percentage gains. With a relatively modest portfolio you can use your time better, good luck.

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409716

Postby Itsallaguess » May 6th, 2021, 6:52 am

Hariseldon58 wrote:
The biggest obstacle you face is your own emotions.


Whilst that's true to a large degree, I think there's a flip-side to that which is rarely discussed when it comes to long-term investing...

One thing I've found over the years on here and also back on the old Motley Fool site is that a huge amount of emphasis is often placed on 'output-factors' such as total-return, with little emphasis placed on any potential variation on 'input-factors', which of course then feed into such things as 'delivered-returns' on the output side, but I think those 'input-factors' can also play a significant role for many investors as well, and this is an area that's rarely considered in these types of discussions.

As an example, let's consider long term exercise.....

Person A goes jogging twice a week. He doesn't particularly enjoy it, but he's aware that it helps him maintain a healthy lifestyle if he keeps it up over the long term. Let's say each run burns 500 calories, so that each week, on average, he's burning 1000 calories...

Person B prefers to go out walking, because he really enjoys that particular type of exercise. His individual walks, on average, only burn around 350 calories, but because he enjoys it so much, he finds that he manages to get out for three walks, which will generally burn up 1050 calories each week...

Person B has a higher 'Strategy Enjoyment Factor' over Person A, and as such, he finds himself providing an improved level of 'input', in the form of 'exercise sessions per week', when compared to Person A, so that even though on a 'per-exercise' basis, Person A is exercising 'more efficiently' during each of his individual sessions, Person B overcomes that 'higher-output-factor' by compensating on the 'input-factor' side of things, simply because he finds that he enjoys his particular 'lower-return' exercise so much, he finds it very easy and enjoyable to do more of it....

Turning back to investments, I think it's often the case that the 'A' group of investors might want to tell the 'B' group of investors to simply 'change the type of exercise they carry out' so as to move into a 'higher calorie-burn' (total-return) exercise strategy, and whilst that's of course a quite sensible and academic approach to this issue, it doesn't really get to the heart of how the 'B' group of people might wish to engage with the whole idea of 'long-term exercise/investment', which is to not only take 'calorie burn / total return' into account, but to also take more emotional enjoyment factors into account at the same time, which sometimes might even counterbalance some of those 'improved total-return factors' that might be lost on the 'output side' by doing so, if they can provide improved impetus on the 'input' side, due to that increased, long-term enjoyment....

Cheers,

Itsallaguess

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409732

Postby Urbandreamer » May 6th, 2021, 8:39 am

Itsallaguess wrote:Turning back to investments, I think it's often the case that the 'A' group of investors might want to tell the 'B' group of investors to simply 'change the type of exercise they carry out' so as to move into a 'higher calorie-burn' (total-return) exercise strategy, and whilst that's of course a quite sensible and academic approach to this issue, it doesn't really get to the heart of how the 'B' group of people might wish to engage with the whole idea of 'long-term exercise/investment', which is to not only take 'calorie burn / total return' into account, but to also take more emotional enjoyment factors into account at the same time, which sometimes might even counterbalance some of those 'improved total-return factors' that might be lost on the 'output side' by doing so, if they can provide improved impetus on the 'input' side, due to that increased, long-term enjoyment....

Cheers,

Itsallaguess


Indeed. Many years ago someone who didn't invest argued that I should include the cost of buying the Investors Chronicle in my investment costs. They were trying to make the point that I was spending money on a unsafe stratergy, to whit risking my money in stocks and shares while spending it to have a hope of making good decisions. Banks were paying decent interest back then.

I still enjoy reading the magazeen and chalk the costs to indulging myself. If the OP want's to move some of their funds to active investments, then who is to critisise?

Sure the right index tracker is a good investment, but I feel that there is a lot to be said for involving yourself in the process of investing. I truely enjoy listening to interviews with fund managers or presentations explaining why I should invest. Likewise when it's a small company rather then fund.

It's even more enjoyable if you feel that the world or peoples lives may be improved as a result of the money invested.

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409733

Postby Hariseldon58 » May 6th, 2021, 8:50 am

Itsallaguess wrote:
Hariseldon58 wrote:
The biggest obstacle you face is your own emotions.


Whilst that's true to a large degree, I think there's a flip-side to that which is rarely discussed when it comes to long-term investing...


Turning back to investments, I think it's often the case that the 'A' group of investors might want to tell the 'B' group of investors to simply 'change the type of exercise they carry out' so as to move into a 'higher calorie-burn' (total-return) exercise strategy, and whilst that's of course a quite sensible and academic approach to this issue, it doesn't really get to the heart of how the 'B' group of people might wish to engage with the whole idea of 'long-term exercise/investment', which is to not only take 'calorie burn / total return' into account, but to also take more emotional enjoyment factors into account at the same time, which sometimes might even counterbalance some of those 'improved total-return factors' that might be lost on the 'output side' by doing so, if they can provide improved impetus on the 'input' side, due to that increased, long-term enjoyment....

Cheers,

Itsallaguess


That’s a good point made about investing becoming a hobby, enjoying the process or challenge.

Guilty as charged !

By necessity I started in the late 80’s with investment trusts and have explored other approaches and that leads to the conclusion that the regular buying of diversified equities through thick and thin, reducing costs where practicable works really well.

There are no doubt many doing the same thing here but whilst I know that a lot of time and study has provided an education that has improved returns by a small % each year over the simplest approach, it’s doubtful that it’s a good use of time for most....

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409787

Postby 1nvest » May 6th, 2021, 12:14 pm

If you're investing for the longer term along with adding periodic new money then one of the safest choices is to maximise the capital. If for instance you retire where you've saved up 50 times yearly spending such that a 2% SWR might be employed, then that's safer than if you only have 20x spending where a 5% SWR is required. Which commonly is perceived as all-stock being the best potential for maximising potential capital.

Which stocks? Well you want something that wont fail, nor massively underperform the 'average'. A major broad stock index with a sound/solid provider/broker better provides such security. Buy the FT250 and you also buy nearly 50 Investment Trusts within that. Buy the FTAllShare and you have both the FT100 an FT250 within that, and where the FT100 includes all of the variations of HYP's. But that is still a concentrated risk, UK. Buy a world tracker and that includes the UK, and whatever next share(s) that rise to be the greatest performers, that as of yet may not even exist.

Dips when you're accumulating are beneficial, permit you to buy more additional shares than if no dip had occurred. Dips, that periodically occur can be very deep. At times historically each of cash, bonds, stocks ...etc. have all halved in real (after inflation) terms, at times all being down at the same/similar time - typically due to high inflation and interest rates being kept low (similar to conditions in present day circumstances but where inflation has yet to 'rage'). For those drawing from their portfolio (retired) such losses compounded with withdrawals can be devastating. For those in accumulation they can be great (longer term). As such when you're at around 10 years from retirement that is the time to consider de-risking your portfolio, in your mid 50's.

Costs and taxes can compound out to massive amounts over time and as such a broad low cost index held tax efficiently should be preferred.

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Re: Would love some thoughts on my desire to move away from Vanguard investing

#409939

Postby turnaround » May 6th, 2021, 10:46 pm

tbh now im actually wondering whether i should instead be focusing on maximising my pension instead of ISA if i dont have serious plans to use it before retirement.

atm i contribute 15% + 5% company match...even if i contributed the whole 20k ISA allowance id still be getting the 40% tax benefit....


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