Global index trackers

Surreyboy

Hi everyone,

I've been investing in the Fidelity Index World tracker (A class) via III for the last 6 months. I initially tried to invest in the I class which has a low TER of 0.15%. But, after lots of delay and unhelpfulness (and despite initially claiming twice that I could invest in the I class), III eventually told me that the I class wasn't available. I wrongly assumed that the A class had a similar TER and invested in that instead (I should of course have checked more carefully). However, on reviewing my investments this week, I discovered that the TER for the A class is twice as expensive at 0.3% (and has underperformed the I class by c 0.15%).

Is any one able to recommend an alternative global index tracker or ETF with charges more similar to the Fidelity I class? It does not matter whether or not the fund has any UK allocation. I was considering possibly the Legal and General International Index Trust.

Thanks!

masonic

The L&G fund is very cheap and probably the best option. If you prefer ETFs, there's SWDA (iShares Core MSCI World ETF, TER 0.2%), but it isn't quite as cheap.

masonic

By the way, couldn't you get the P Class @ 0.18%?

Surreyboy

There only appears to be an A & W class when I search on the site? (although W is quite cheap)

masonic

It's listed here, but you're right, it doesn't seem to want to let me trade it.

Glen_Clark

I hold Vanguard All World ETF (0.25%) http://funds.ft.com/uk/Tearsheet/Summary?s=VWRL:LSE:GBP
But have to sell some this month to use up my CGT allowance so am thinking of re investing into their Developed World ETF (0.18%) http://funds.ft.com/uk/Tearsheet/Summary?s=VEVE:LSE:GBP

Glen_Clark

Glen_Clark wrote: »

have to sell some this month to use up my CGT allowance so am thinking of re investing into their Developed World ETF (0.18%) http://funds.ft.com/uk/Tearsheet/Summary?s=VEVE:LSE:GBP

I don't know why but my x-o account wouldn't accept an order for VEVE - it told me to contact the dealing desk
So I put the money in SWDA instead.
http://funds.ft.com/uk/Tearsheet/Summary?s=SWDA:LSE:GBX
Incredibly low dealing spread - less than half VEVE - but its a longer established and therefore far bigger fund.
Its an accumulation fund, which I have never had before I realise they use the dividend net of tax to buy new shares - which is presumably more cost effective than the commission charging broker changing dollars to pounds to pay your dividend. But I don't know how you find out the cost of the units to work out your capital loss or gain when you sell.

masonic

Glen_Clark wrote: »

Its an accumulation fund, which I have never had before I realise they use the dividend net of tax to buy new shares - which is presumably more cost effective than the commission charging broker changing dollars to pounds to pay your dividend. But I don't know how you find out the cost of the units to work out your capital loss or gain when you sell.

As it is a UK reporting fund, you need to look up the excess reportable income from the iShares website (look up the ETF, or indeed any reporting ETF, and select the 'All Documents' link at the top, filter by 'Tax' and you should see a downloadable spreadsheet for each year). For example for 2014, SWDA has:
"Excess of Reported Income per Unit" of 0.4493 USD
"Fund Distribution Date" of 31/12/2014.

Lots of information in this document.

Glen_Clark

masonic wrote: »

As it is a UK reporting fund, you need to look up the excess reportable income from the iShares website (look up the ETF, or indeed any reporting ETF, and select the 'All Documents' link at the top, filter by 'Tax' and you should see a downloadable spreadsheet for each year). For example for 2014, SWDA has:
"Excess of Reported Income per Unit" of 0.4493 USD
"Fund Distribution Date" of 31/12/2014.

Lots of information in this document.

Found it, Many Thanks :T.
This is new to me so I would be grateful for further advice
(I looked at iShares ETFs that distribute dividends quarterly but the expense ratio is much higher and far more than Vanguard)
Does this mean;
We convert the 0.4493 USD to pound sterling ourselves? - at todays rate thats about 29p, but I don't know what the exchange rate was then.
So do we declare 29p of dividend income, and increase the book cost of the share by 29p for Capital Gains Tax purposes?

masonic

Glen_Clark wrote: »

Does this mean;
We convert the 0.4493 USD to pound sterling ourselves? - at todays rate thats about 29p, but I don't know what the exchange rate was then.
So do we declare 29p of dividend income, and increase the book cost of the share by 29p for Capital Gains Tax purposes?

That would appear to be the case, but I can't say with any certainty. You can use Google or XE to find the exchange rate on the appropriate date, so that shouldn't be a problem.

I have no idea how the first nominal distribution should be treated for units purchased part way through the distribution period. Normally some or all of that distribution would be equalisation rather than income.

I don't hold this fund, but do have a small slug of CSP1 unwrapped, which has the same issue. Fortunately, I am quite some way off having a further income tax liability on my S&S income and should be able to comfortably avoid any CGT (at today's limits anyway), so I'll be making note of the necessary information, but am counting on not having to make a declaration.

If there was ever a case for putting something in an ISA...

Glen_Clark

masonic wrote: »

I am quite some way off having a further income tax liability on my S&S income and should be able to comfortably avoid any CGT (at today's limits anyway),.

So am I. As I have never had any further tax liability on dividends or gains I haven't reported it. But this year I have sold £54k of shares to realise £10,900 of Capital Gains. I know this is below the tax free limit of £11,000, so I have no further tax to pay. Nevertheless, I think I still have to report it due to the amount sold?
(To complicate matters further some of the shares were certificated transferred in to my x-o account. As they don't know how much I paid for them they have entered the book cost as zero, making my capital gain look far more than it really is)