Global Tracker Funds

dunstonh

MPN wrote: »

Thanks for pointing that out dunstonh about the VLS100. Everybody I have spoken to seems to talk about the VLS funds as trackers so good to know that it isn't.

Yes, you sometimes see VLS incorrectly referred to as a tracker here. A tracker is a fund that invests in a single sector following a specific index/benchmark. VLS is not a tracker but a fettered fund of funds that reinvests into a selection of in-house (hence fettered) trackers using allocations decided by Vanguard. The charge is increased to cover the management decisions made by Vanguard with VLS. Whereas a tracker would not have it's price increased for management decisions as it just tracks whatever it is tracking.

For many people, VLS is a better option than picking a tracker. Single sector investing is bad investing. The exception being when you want to go 100% equity. In which case, global inc UK is a viable option. However, some people make the mistake of going for something like 100% in a FTSE all share tracker. That would be poor quality investing.

MPN

so if I wanted to go 100% equity then you personally think global inc UK is a viable option. I was really thinking of going for the Vanguard FTSE World Developed Ex UK and the L&G fund because I already have enough UK investments. Is there any particular reason as to why you would favour the global inc UK?

dunstonh

so if I wanted to go 100% equity then you personally think global inc UK is a viable option.

If it is what you want to do then it's fine. I wouldnt do that but generically it is a viable option and you could do a lot worse.

I was really thinking of going for the Vanguard FTSE World Developed Ex UK and the L&G fund because I already have enough UK investments. Is there any particular reason as to why you would favour the global inc UK?

If you bring in two funds then you are going to need to rebalance. How much UK allocation are you going to have? That is a management decision and rebalance requires a little work. That means it is not ideal for a fire and forget solution. Global inc UK would allow single fund.

When you say UK investments, is this to supplement them or is this something completely different?

buffman

Do take into account when you invest in a global fund you are in effect 'selling' sterling at these levels. If sterling was to appreciate to levels seen at the beginning of the year (and global stock markets are static), you would lose about 15%.

MPN

So global inc UK is either the Fidelity Index World Fund or a Vanguard Life Strategy fund so as to include the UK?

coastline

MPN wrote: »

So global inc UK is either the Fidelity Index World Fund or a Vanguard Life Strategy fund so as to include the UK?

From the links I posted yesterday you can see a breakdown of the fund..

https://www.msci.com/world

VLS 100%..select the breakdown tab..

https://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=ACFDV&univ=O

Fidelity World..again select breakdown tab..

https://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=I1F0J&univ=O

Linton

MPN wrote: »

So global inc UK is either the Fidelity Index World Fund or a Vanguard Life Strategy fund so as to include the UK?

Or L&G Global Equity Index which tracks FTSE World (including UK).

DrSyn

Have you thought about an ETF which tracks a world index such as the FTSE ALL WORLD INDEX or the MSCI World?

MPN

I'm not experienced as yet with ETF's but I will look into it.

Funnily enough I am now debating with some colleagues about the merits of passive vs active funds! One of my colleagues (from the company I used to work for) said his Fundsmith Equity Fund has far exceeded any of the tracker/ index funds so said why would you want to invest in trackers?

dunstonh

MPN wrote: »

I'm not experienced as yet with ETF's but I will look into it.

Funnily enough I am now debating with some colleagues about the merits of passive vs active funds! One of my colleagues (from the company I used to work for) said his Fundsmith Equity Fund has far exceeded any of the tracker/ index funds so said why would you want to invest in trackers?

There are quite a lot of viable managed funds in the UK. You should always keep an open mind and invest where is best. If it is passive then pick that. If it is managed, then pick that.