Vanguard Trackers not Tracking

fezziwig

Hello all,

I'd recently invested in an ETF Vanguard FTSE 100 tracker, VUKE (through Hargreaves Lansdown) as Vanguard have low charges. But I'm at a loss to understand the reasons why it is down over 3% in one year compared to the FTSE 100 - I was using the chart tools provided by HL on ETF vanguard-funds-plc-ftse-100-ucits-etf-gbp (sorry, couldn't post a proper link - wasn't allowed, replace spaces with a . and @ with a / below)
hl co uk @shares@shares-search-results@v@vanguard-funds-plc-ftse-100-ucits-etf-gbp@share-charts

I then looked at a non ETF Vanguard tracker, the Vanguard FTSE UK Equity Income Index again using the HL chart tools at

hl co uk @funds@fund-discounts,-prices--and--factsheets@search-results@v@vanguard-ftse-uk-equity-income-index-income@charts

Over a five year period it looks to be about 17% down on the FTSE100.

Why is their performance so poor, are all trackers this bad? Your thoughts much appreciated

ColdIron

If you invested in VUKE 'as Vanguard have low charges' why did you choose HL, one of the most expensive platforms to hold it on? BTW comic sans is quite vexatious

Borrowedtune

ColdIron wrote: »

If you invested in VUKE 'as Vanguard have low charges' why did you choose HL, one of the most expensive platforms to hold it on? BTW comic sans is quite vexatious

I thought HL was still quite competitive for smaller portfolios ? I don't think the OP tells us how much is invested though, so it's hard to be sure what his best option would be.

ChopperST

Borrowedtune wrote: »

I thought HL was still quite competitive for smaller portfolios ? I don't think the OP tells us how much is invested though, so it's hard to be sure what his best option would be.

The exact opposite in fact if you only hold funds its one of the most expensive places to hold them at 0.45% They become cheaper at £250k at 0.25% but when you reach that amount you are much better off with a fixed fee broker.

ColdIron

Borrowedtune wrote: »

I thought HL was still quite competitive for smaller portfolios ?

For small portfolios they don't cost much but this doesn't make them competitive as nearly everywhere else is cheaper, 0.45% is still 0.45%. Don't get me wrong, I still like HL and continue to use them for part of my portfolio but I'm not kidding myself that they are cheap

Anyway, apologies to the OP, I didn't mean to hijack the thread. I think it was the font that got my dander up

westy22

Well, I'm also a little confused. Vanguard's official records show that the FTSE 100 ETF has tracked very close to the FTSE 100 index - a few bp below as one would expect.

However, I have looked at one year charts on several different websites and they all show a very significant drop in the ETF price in mid-March; causing a divergence from the index which has never recovered. This drop has had a profound effect on the 12 month and 6 month figures.

I don't know the reason for this - perhaps someone wiser can enlighten me?

SnowMan

fezziwig wrote: »

Why is their performance so poor, are all trackers this bad? Your thoughts much appreciated

There won't be any tracking difference of the size you mention.

You are probably not allowing for dividends paid out by VUKE but are comparing with a FTSE 100 index allowing for dividends.

A like for like comparison will only show a minimal tracking difference.

Borrowedtune

ChopperST wrote: »

The exact opposite in fact if you only hold funds its one of the most expensive places to hold them at 0.45% They become cheaper at £250k at 0.25% but when you reach that amount you are much better off with a fixed fee broker.

I've bailed out of HL so I haven't kept abreast, but when that spreadsheet tool was put together and circulated on here earlier this year, I thought the 0.45% was the 3rd lowest out of the 9 providers that were assessed. I've still got a copy and that's what it seems to say, anyway.


Of course, other providers might have lowered their charges since and my copy may be out-of-date...

westy22

SnowMan wrote: »

There won't be any tracking difference of the size you mention.

You are probably not allowing for dividends paid out by VUKE but are comparing with a FTSE 100 index allowing for dividends.

A like for like comparison will only show a minimal tracking difference.

That was my original thought but, as VUKE pays out dividends quarterly, I would have expected to see a small drop in price every 3 months or so as a regular pattern but the charts I'm seeing are showing a tight tracking of the index throughout 2012 and 2013 and then this major drop in March 2014.

RetiredInThailand

There was a 4% dividend paid around March 15. I think the size of this had something to do with the Vodafone sale, though I never really understood why it was so large or why the price didn't recover before the next dividend as it usually does. I bought just after this date so I'm not affected.

guymo

VUKE has tracked the FTSE 100 very closely as you can see if you look at the charts on e.g. Trustnet.

http://www.trustnet.com/Tools/Charting.aspx?typeCode=E_FG1XE,NUKX

The Vanguard UK Equity Income fund does not attempt to track the FTSE 100 but rather the FTSE Equity Income index, which it does rather closely (and has actually outperformed over five years, not sure how). It has also made more than the FTSE 100 over that time.

http://www.trustnet.com/Tools/Charting.aspx?typeCode=O_FFPC7,NBLRF