Vang US Equity Idx on AT v. HSBC Amer Idx on iii

deadpeasant

I have a £5k lump sum which I intend to put into Vanguard US Equity Index fund on Alliance Trust or HSBC American Index on Interactive Investor (neither account is wrapped). As far as I can see it's swings and roundabouts - just thought I'd ask on here to see if I'm forgetting an obvious deciding factor?

(And while I've been getting the cash out of HL to avoid their tracker tax, I've missed the recent increases, grrrrrrrr)

Thanks for any opinions.

jimjames

I've been moving my HSBC funds to Cofunds using Cavendish. It seemed to be a better deal than Alliance trust as they were costing £12.50 for every purchase whereas Cofunds do not.

kharne

Alliance Trust have an annual fee don't they? Might be insignificant but probably worth factoring in.

Performance wise, they're very similar, with Vanguard delivering ~5% more since July '09 (compared using HL's charts). The Vanguard fund has a lot more holdings than the HSBC tracker (3001 v 503) which could factor in-exposure to smaller companies might be better in periods of recovery but worse in a poor climate. Interestingly you can sort of see this effect when comparing the performance directly. Vanguard also has a slightly higher historic yield and a lower TER.

To be honest, these differences are likely to be pretty small long term, especially compared to the £24pa charge of HL!

Ilya_Ilyich

HSBC US Index tracks the S&P 500 whereas the Vanguard tracks the S&P Total Market so holds more medium/smallcap -- 2500 more firms and (back of the envelope) about 14% more total market cap.