Cheapest global tracker through iWeb?

blizeH

Hi, I'd like to invest in a global index tracker through iWeb and was wondering which the cheapest one is please? Sites like Monevator are super useful but the rates on iWeb always seem to differ.

I've mostly used Vanguard LifeStrategy before (mixture of 80/100) but they have a huge UK bias which I'm very keen to avoid right now.

Thank you!

bowlhead99

Vanguard do a FTSE All-World tracker as an ETF, with OCF of 0.25%. Ticker of the one priced in GBP on London stockmarket is VWRL.

https://www.vanguard.co.uk/uk/portal/detail/etf/overview?portId=9505&assetCode=EQUITY##overview

http://www.ftse.com/Analytics/FactSheets/Home/DownloadSingleIssue/GAE?issueName=AWORLDS

Glen_Clark

blizeH wrote: »

Hi, I'd like to invest in a global index tracker through iWeb and was wondering which the cheapest one is please?

Thank you!

Cheapest one I have seen is ticker code HMWO (from HSBC) at 0.15% : http://funds.ft.com/uk/Tearsheet/Summary?s=HMWO:LSE:GBX

Ray_Singh-Blue

From http://monevator.com/low-cost-index-trackers/

World Tracker. Cheapest

Fidelity Index World Fund I (GB00B7LWFW05) OCF 0.15%
HSBC MSCI World ETF (HMWO) OCF 0.15%
Vanguard FTSE Developed World ETF (VEVE) OCF 0.18%
db X-trackers MSCI World ETF (XDEX) OCF 0.19%
iShares Core MSCI World ETF (SWDA) OCF 0.2%
HSBC FTSE All-World Index Fund C (GB00BMJJJG09) OCF 0.2%

The HSBC index fund contains an emerging market component. The rest cover the developed world only.

Some broader info at https://www.bogleheads.org/wiki/UK_investing but not as detailed about your specific Q

bowlhead99

Worth noting that unlike the FTSE All-World, the cheaper ones using FTSE Developed or MSCI World don't cover the emerging markets.

For example MSCI World is only 23 developed countries and so it covers less than 90% of what the "proper" MSCI ACWI index covers.

https://www.msci.com/world

Whereas your lifestrategy fund or a "proper" global tracker would cover emerging markets. You might or might not feel you'd miss that bit, but having 10% of your assets in an area that goes up by 10% more than the average of the rest, improves portfolio performance by an entire percent, which it about 20x the effect of saving 0.05% on management fees.

Glen_Clark

My biggest holding is SWDA: http://funds.ft.com/uk/Tearsheet/Summary?s=SWDA:LSE:GBX The charge is 0.2% Being a very large fund dealing spreads are low, and being an accumulator reinvesting the dividends looks more cost effective than paying commission to have your dividends converted from dollars to Sterling. and paying more commission to buy more units with it?

Linton

As Bowlhead says, what a fund invests in is far more important than the odd fraction of a % in charges. Consider the % US. The wider trackers are around 54% US which would worry me. The more narrow "developed world" ones are at 60% US which is a real concern in my view. One of the main intellectual reasons for using a global tracker is that it represents the world market. However if you look at world data on the net you will see that the actual US% is below 40% at least according to 2013-2014 data..

Glen_Clark

Warren Buffet advised his wife to invest 90% in the S&P 500, so 60% wouldn't be a great concern to me. It doesn't look great value after the huge rises since QE, but then what does?
My last re-investment of dividends was to my FTSE100 ETF to rebalance, and in the hope the FTSE100 will catch up. But I am well aware I may be wrong.

blizeH

Thank you all so much for the responses!

Very interesting, I think what bowlhead said about emerging markets in particular is very eye opening, because whilst I do already have some coverage through the Vanguard LifeStrategys the Fidelity fund I'm invested with has none.

The HSBC FTSE All-World Index Fund seems like the best option in this case then? Slightly cheaper then the Vanguard alternatives and seems to have a nice balance of both developed and emerging markets.

Ray_Singh-Blue

HSBC FTSE All-World Index Fund has 2002 holdings, Vanguard Funds plc FTSE All-World UCITS ETF has 2973 holdings.

blizeH

Thanks! In the past I've gone for funds over ETFs, but I'll look up the difference now (I don't think there are many differences other than ETF trading is instant) and probably go with VWRL then