Unwrapped Vanguard ETFs and Index Funds - Best Platform?

bigfreddiel

grey_gym_sock wrote: »

it looks like TD don't have any vanguard funds, but do have some vanguard ETFs. this would make sense, because they would literally be paid nothing on their current charging model if they did let you buy the funds (if you have a balance over £7,500); but for ETFs, they can charge dealing commissions, the same as for shares in general.

true but remember no stamp duty when buying etf's

so using td's regular investment option all you pay is £1.50 per trade

fj

bowlhead99

bigfreddiel wrote: »

true but remember no stamp duty when buying etf's

so using td's regular investment option all you pay is £1.50 per trade

fj

Is that from personal experience with Vanguard ETFs regular investing through TD? I ask because of Premierfella's post #24 which noted that some ETFs may not be eligible where the primary listing is not GBP.

So for example the Vanguard All-World or S&P500 tracker can be bought in a GBP flavour but the fund NAV and accounts are produced in USD and therefore might be more likely that the USD ticker is its primary listing (there is only one ISIN so far as I can see on the Vanguard UK site)?

Whereas the FTSE 100 tracker ETF with its 0.10% TER is GBP all the way and so you could get it cheap on the regular investing program?

Vanguard's UK ETF range currently seems a bit limited anyway with only 4 equity trackers (certainly compared to the range they promote in the US where they have loads of sector options) but it would be good to know which ones qualify.

My TD accounts are not currently set as regular investing but I would be grateful if anyone whose are, could let us know if you can put the GBP All-World (VWRL) or GBP S&P500 (VUSA) into your regular investment for the 1.50 a month. Thanks:)

TCA

TCA wrote: »

I'm not sure the index fund and the corresponding ETF are always identical. e.g. from the ATS website:

Vanguard Emerging Markets Stock Index has Fund Benchmark MSCI EM NR USD and Vanguard FTSE Emerging Markets ETF has Fund Benchmark FTSE Emerging TR USD.

When looking at the composition of both, the ETF seems more heavily weighted towards Latin America and Africa and less so for Asia. According to my sums anyway.

I see Vanguard are dropping the MSCI indices and moving to FTSE on some of their funds.

http://www.reuters.com/article/2012/10/02/vanguard-indexes-idUSL1E8L24PN20121002

Anybody know if their Irish domiciled Emerging Markets Stock Index Fund is included as part of this shuffle? I can only see "Vanguard’s switch affects six international equity funds" but no idea what that means. If VWO is changing does this mean VIEMKT will too?

Edited to say that below gives the answer. It's only the U.S. domiciled Vanguard Emerging Markets Stock Index Fund (VEIEX) that's affected:

http://www.businessweek.com/news/2012-10-03/vanguard-switch-to-ftse-may-prompt-selling-in-south-korea-stocks

TCA wrote: »

Reply in from TD Direct:

"Vanguard unit trusts are not part of the funds offering available through TD Direct Investing/Co-funds Fund Supermarket so we cannot trade them for you.

I see that Cofunds are now getting Vanguard trackers but don't yet see them offered via TD Direct. I feel another email coming on.

https://www.vanguard.co.uk/documents/portal/press_releases/cofunds-release.pdf

Oddly I don't see the Vanguard FTSE Developed Europe ex-UK Equity Index Fund in that list above. An omission?

dunstonh

I see that Cofunds are now getting Vanguard trackers but don't yet see them offered via TD Direct. I feel another email coming on.

I believe Cofunds are making them available on their unbundled pricing but not bundled pricing model. Is TD Direct unbundled yet?

TCA

According to this it is: http://monevator.com/no-fee-discount-broker-options/

Retail Distribution Review (RDR) adapted

"The main reason I favour TD Direct is because it’s already made its RDR move. From July 1 (2012), TD is introducing a platform fee. But this one isn’t like the Hargreaves Lansdown flat-rate slap in the face. The platform fee of 0.35% is only charged if your fund pays over 0.5% trail commission. Otherwise the charge is zero."

http://www.tddirectinvesting.co.uk/choose-an-account/rates-and-charges/brokerage-banking-services/

Trail Commission
Fund managers levy an Annual Management Charge (AMC) on their funds. Typically this is around 1.5% of the value of the fund. This may include a payment to us as the distributor known as Trail Commission. From 1st July 2012 any Trail Commission received by us from the Fund Manager will be rebated in full to your appropriate account as cash on or after 31st December 2012.

Platform Fee
A Platform Fee may be charged against the value of your fund holding as follows:
Funds paying Trail Commission of 0.5% or more annually 0.35%
Funds paying Trail Commission of less than 0.5% annually Nil
The Platform Fee will be applied at the same time as the Trail Commission rebate. Both transactions will be individually marked on your statement.

grey_gym_sock

that's not fully unbundled, because they're not rebating platform commission, only trail commission (and are also indirectly keeping some of the trail, by charging you 0.35% only when trail >= 0.5%).

TCA

Would this matter in the case of Vanguard products? I thought they pay neither trail commission nor platform commission.

grey_gym_sock

it matters in that TD are unlikely to offer any vanguard funds, precisely because they don't pay any trail or platform commission, because then TD wouldn't be paid at all.

if TD had a fully unbundled charging structure, they'd charge explicitly, regardless of which funds you held. and then there'd be no reason for them not to offer vanguard funds.

TCA

Yet TD currently offer Vanguard ETFs, which would only earn them the dealing commission if an investor was using their regular investment account or holding a balance of over £7,500.

dunstonh

As siad above, TD is not unbundled. They have gone hybrid. Some of the platforms are trying to drag out another year of hidden commissions before the platform review bans them.

A platform that relies on hidden commissions and/or marketing payments from fund houses in its pricing model is not going to offer Vanguard funds as Vanguard do not pay platforms to hold their funds. Hence why you only see them on unbundled platforms.

Yet TD currently offer Vanguard ETFs, which would only earn them the dealing commission if an investor was using their regular investment account or holding a balance of over £7,500.

ETFs are a directly held asset like shares. TD's model still contains bias in its pricing by including commission payments on funds.