Vanguard extend ETF range

masonic

gadgetmind wrote: »

Do they provide ISAs and SIPPs?

https://www.vanguard.co.uk/uk/portal/investor-resources/support/investing-help

Are your funds available for ISA and SIPP investment?
Yes, all funds are UCITS products and qualify for inclusion within a tax wrapper - but Vanguard Asset Management, Limited does not offer an ISA or SIPP wrapper.

The £100,000 per fund minimum investment could be a bit of an obstacle if that is the minimum value you must hold on an ongoing basis - the site is unclear about that.

Glen_Clark

masonic wrote: »

https://www.vanguard.co.uk/uk/portal/investor-resources/support/investing-help


The £100,000 per fund minimum investment could be a bit of an obstacle if that is the minimum value you must hold on an ongoing basis - the site is unclear about that.

I asked on the phone what happens if you invest £100k and the fund price falls. They said you can let it go down to £70k

gadgetmind

masonic wrote: »

https://www.vanguard.co.uk/uk/portal/investor-resources/support/investing-help

"Yes, all funds are UCITS products and qualify for inclusion within a tax wrapper - but Vanguard Asset Management, Limited does not offer an ISA or SIPP wrapper."

masonic

gadgetmind wrote: »

"Yes, all funds are UCITS products and qualify for inclusion within a tax wrapper - but Vanguard Asset Management, Limited does not offer an ISA or SIPP wrapper."

Yes, it's also possible to include the same quoted text within quotation marks, rather than the quote tags I used in my post above

gadgetmind

masonic wrote: »

Yes, it's also possible to include the same quoted text within quotation marks, rather than the quote tags I used in my post above

Ah, drat, sorry, not awake yet today!

Glen_Clark

Reason I asked about Vanguard direct is, now that trackers are so cheap, I am thinking about selling the unwrapped FTSE 100 shares I hold direct and either adding to my Vanguard ETFs or starting a new Lifestrategy direct with Vanguard, and don't know which is best

bowlhead99

Glen_Clark wrote: »

I am thinking about selling the unwrapped FTSE 100 shares I hold direct and either adding to my Vanguard ETFs or starting a new Lifestrategy direct with Vanguard, and don't know which is best

Seems to me you could build your own set of trackers with ETFs for less pounds per year in trading costs than the AMC of a lifestrategy. The other advantage of full DIY rather than fund-of-funds would be that you could better take account of your existing holdings (i.e. the ETFs and ITs and whatever else you already held alongside your FTSE portfolio) - presumably your other holdings were already set up to sit alongside a UK largecap portfolio rather than a global one. When you build the DIY global portfolio out of ETFs you can tailor it to your current thinking of 'value' of one index vs another.

Being able to tinker and tailor the portfolio by buying and selling some of your ETFs from time to time is a double edged sword of course. The VLS gets you broadly fixed allocations across geographies - which as a side note, sounds better to me than VWRL - and so aside from saving you from ongoing rebalancing transaction costs it saves you from thinking too hard about which ratio to rebalance towards: what indexes should have a heavier allocation within the (say) £150k pot? You just get what you're given and accept that.

So you are perhaps less likely to stress about whether you should have selected 20% UK or 30% UK or 40% US or 33% US or whatever. You can just say that the loss of ability to pick and choose your exact allocation within your pot, and whether to 'run your winners' or not, and the the extra AMC vs ETF trading costs, is the price to pay for the quiet life which is what passive investing is all about - being passive!

Of course, if you are the type of person to still kick yourself when your 20% UK allocation via choosing the VLS turned out to be less lucrative than 40% via self-select ETF, just as much as you would if your selected 40% was worse than the out-of-the-box VLS allocation, then there isn't much 'lower stress' via choosing the VLS. Accepting the VLS allocations is in itself an active choice for which you have to take the blame.

At the end of the day, the stress free life of holding a large investment of VLS direct with the manager is only good if you like the out-of-the-box ratio it gives you. If not, you have to hold a portfolio of ETFs along side to give you the ratio that you really wanted for that chunk of your portfolio. In order to tweak what allocation VLS gives you, then you still have to hold a portfolio of self-selected ETFs on the side. That sounds like the worst of all worlds because if you wanted to maintain x% UK and y% Japan and z% USA, which differed from the VLS allocation, you are still paying for the transaction costs to rebalance and maintain the portfolio, and doing the work involved, and paying the VLS AMC which is a bit higher than the sum of its constituent parts.

gadgetmind

OK, switching to separate ETFs rather than VWRL will save me £125 pa in my SIPP and cost around £50 in fees to make the switch. I'm inclined to switch my SIPP fairly soon (next few weeks) and other portfolios as I add fresh cash and need to rebalance anyway.

I'm still fiddling with allocations, but what's in my spreadsheet currently is -
VUSA 25.00%
VJPN 6.00%
VEUR 30.00%
VUKE 10.00%
MIDD 5.00%
VAPX 10.00%
VFEM 14.00%

This gives the following territory allocations versus VWRL. It's much lighter on USA, much heavier on UK (home bias), and I'm also higher on Asia Pacific and EM.

VWRL Me
United States 47.00% 25.00%
Japan 8.40% 6.00%
United Kingdom 8.10% 24.96%
France 3.60% 4.20%
Switzerland 3.40% 4.05%
Canada 3.40% 0% (yes!)
Germany 3.30% 3.99%
Australia 3.20% 4.54%
China 2.00% 2.88%
Korea 1.70% 2.52%

I may lighten up further on UK (and I have mixed views about that MIDD holding!) and increase Europe, Japan and EM further.

Of course, I could instead crank up USA, wind back Europe, APAC and EM, and get close to Lifestrategy. However, the temptation to avoid (possibly!) overbought and bias towards value is strong within me!

Glen_Clark

gadgetmind wrote: »

OK, switching to separate ETFs rather than VWRL will save me £125 pa in my SIPP and cost around £50 in fees to make the switch. I'm inclined to switch my SIPP fairly soon (next few weeks) and other portfolios as I add fresh cash and need to rebalance anyway.

I'm still fiddling with allocations, but what's in my spreadsheet currently is -
VUSA 25.00%
VJPN 6.00%
VEUR 30.00%
VUKE 10.00%
MIDD 5.00%
VAPX 10.00%
VFEM 14.00%

This gives the following territory allocations versus VWRL. It's much lighter on USA, much heavier on UK (home bias), and I'm also higher on Asia Pacific and EM.

VWRL Me
United States 47.00% 25.00%
Japan 8.40% 6.00%
United Kingdom 8.10% 24.96%
France 3.60% 4.20%
Switzerland 3.40% 4.05%
Canada 3.40% 0% (yes!)
Germany 3.30% 3.99%
Australia 3.20% 4.54%
China 2.00% 2.88%
Korea 1.70% 2.52%

I may lighten up further on UK (and I have mixed views about that MIDD holding!) and increase Europe, Japan and EM further.

Of course, I could instead crank up USA, wind back Europe, APAC and EM, and get close to Lifestrategy. However, the temptation to avoid (possibly!) overbought and bias towards value is strong within me!

£50 fees but what about the buy/sell spread (which I found highest when I bought VEUR as its a smaller fund)
You might find they drop the fees on VWRL when you have done all that :mad:
I like the idea of several ETFs though as mine are unwrapped and I can sell one and buy another to use up CGT allowance.

Glen_Clark

Warren Buffet is being called Vanguards Best Salesman after recommending their ETF (VUSA) to his wife in his will.

link to FT article behind paywall: http://www.ft.com/cms/s/0/3be46964-2d2c-11e4-911b-00144feabdc0.html?siteedition=uk#axzz3C2tc7WMk