Global Tracker Funds

MPN

Linton wrote: »

There are different indexes supplied by different companies with different criteria for inclusion. "World" never actually means everything in the world.

The Fidelity Index World Fund (that seems to be what they call it) follows the MSCI world index. This is actually an index of very large and moderately large (but not small) companies in the 23 countries which MSCI deem to be "developed". So it excludes for example India, most of China, South Korea, and Russia.

For detailed information including which counties a fund invests in see www.trustnet.co.uk

Thank you Linton that is very interesting. I just assumed a World Index would include Emerging Markets like China, India etc so really as well as a World Index I would have to select a fund to also cover the Emerging Markets?

bowlhead99

We seem to be going round in circles here. Maybe worth you re-reading some of the earlier answers.

A fund that tracks FTSE or MSCI 'world' is going to track the stuff around the developed world that features in that index.

A fund that tracks FTSE "All-World" or MSCI ACWI (all companies world index) will also include emerging markets.

A fund-of-funds with a strategy of investing across developed and emerging markets (such as Vanguard Lifestrategy) will include emerging markets.

Factsheets for all these funds and indexes are available so you can see what they hold

If you want emerging markets (and there is no real reason *not* to want them in a long term portfolio) then if your investment is only quite small it would make sense to use a fund that includes them rather than adding a second fund. For example, say you are investing £200 a month. It is much easier to find a fund that will accept £200pm and which includes emerging markets, than invest £185pm in a fund which ignores emerging markets and then find another EM specialist fund which accepts £15pm. *


*edit: That said, if the amounts are small, it doesn't make a lot of difference whether you include emerging markets or not, as a few percent a year on a few pounds is not going to make a large absolute impact on your total wealth. If you have £10k, £50k, £100k it is rather more important to consider what you are holding than if you have £1k. Still, understanding what's in your portfolio is a decent discipline to get into even with small amounts, you would just be better with simpler, one-product solutions if your amounts are at the small end.

MPN

Thanks to everybody who posted in this thread it made very interesting reading for a newbie like me and was very informative!

I have finally decided to invest in the VWRL instead of the VLS100 specifically because of the high percentage of UK allocation in the VLS funds.

I did also look at the L&G Global Equty Index but decided to go with VWRL in the end. Thanks again.

Frufru23

Did you look at the Fidelity World Index World Fund?
I hold my accounts with Charles Stanley and this is one of their Foundation Fundlist.

MPN

Frufru23 wrote: »

Did you look at the Fidelity World Index World Fund?
I hold my accounts with Charles Stanley and this is one of their Foundation Fundlist.

Yes, i did as per my previous posts on this thread but the Fidelity World Index does not have any UK allocation.

Frufru23

Are you sure? According to the fund information on the Charles Stanley website, UK Equities is the 3rd largest holding in the fund? (6.8%)

MPN

Frufru23 wrote: »

Are you sure? According to the fund information on the Charles Stanley website, UK Equities is the 3rd largest holding in the fund? (6.8%)

Apologies, I was getting mixed up because I have looked at so many factsheets its the Vanguard Developed World Ex UK and the L&G International Index Trust that doesn't have a UK allocation.

The Fiedelity World Index Fund does not include Emerging Markets so that's why I eventually went with VWRL.

Frufru23

MPN wrote: »

Apologies, I was getting mixed up because I have looked at so many factsheets its the Vanguard Developed World Ex UK and the L&G International Index Trust that doesn't have a UK allocation.

The Fiedelity World Index Fund does not include Emerging Markets so that's why I eventually went with VWRL.

Gotya, I wondered about that too.... but plan to just invest a smidge in to an emerging markets tracker instead. All good :T

MPN

I already have some money invested in the Vanguard World ETF (VWRL) and I've been looking into investing in the HSBC MSCI World ETF for the Developed World Markets only. However, I am wandering how safe these type of ETF's are as opposed to OEIC/UT Trackers? I think ETF's are not regulated are based offshore and have no FSCS protection - is this correct?

I realise ETF's trackers are cheaper than OEIC/UT funds especially when you add the platform fees which in general are not applicable to ETF's but how safe are they?

coastline

MPN wrote: »

I already have some money invested in the Vanguard World ETF (VWRL) and I've been looking into investing in the HSBC MSCI World ETF for the Developed World Markets only. However, I am wandering how safe these type of ETF's are as opposed to OEIC/UT Trackers? I think ETF's are not regulated are based offshore and have no FSCS protection - is this correct?

I realise ETF's trackers are cheaper than OEIC/UT funds especially when you add the platform fees which in general are not applicable to ETF's but how safe are they?

A few links below about safety and hopefully somebody can add to that.

https://www.moneyadviceservice.org.uk/en/articles/tracker-funds-index-funds-exchange-traded-funds

http://www.hl.co.uk/shares/exchange-traded-funds-etfs/knowledge-centre

VWRL in size is currently $975m according to the link below and is described as a physical fund on the factsheet.

http://www.hl.co.uk/shares/shares-search-results/v/vanguard-funds-ftse-all-world-etf-usdgbp

Not sure why you need another world fund but in the period below there's not much between them over 3 years..

https://www.trustnet.com/Tools/Charting.aspx?typeCode=E_FG2HB,NM990100