Global Tracker Funds

MPN

I still don't know whether Vanguarrd FTSE All World ETF rebalances like the VLS?

jdw2000

Linton wrote: »

The key difference between the two funds is that the FTSE All World fund will be based on whatever the allocation is in the real world. So the % to each geography will vary over time. With the VLS100 fund the manager decides what %s to allocate to each geography and so will have to rebalance over time to keep these %s constant. The FTSE All World based fund shouldnt need to rebalance. You can see what the current %s are if you look at the details of the funds in https://www.trustnet.co.uk. You could choose on the basis of which % allocation you like - an active decision.

In terms of performance the difference isnt great. I guess it's more of a religious thing - a true passive believer cant regard the VLS100 as a passive fund as the manager has made a decision on % allocations which as regards the %UK is far in excess of what it should be. On the other hand the FTSE All World index doesnt represent the world either as its % China mainland is only 2.6%, which surely cant be right. Its possibly because IIRC Chinese internal markets are not available to outsiders.

By the way VLS60 has 60% equity/40% bonds annd so is very different to the other two.

That's a very useful explanation. Many thanks.

So the All World re-balances automatically? And as it is not managed, the charges are less? And on that vein, are the charges considered low overall on this product?


On the video posted above, it would seem to me that the VLS 60 is the closest match to what he was describing as he mentioned in the video having less risky assets as part of the mix. But having said that, I am assuming that the equities share of the VLS would actually be managed in the same way that the VLS100 is?

Linton

MPN wrote: »

I still don't know whether Vanguarrd FTSE All World ETF rebalances like the VLS?

A pure index fund like the FTSE All World one holds the Index, which will effectively be a defined number of shares in each of a defined list of companies. As the index moves so will the fund by definition. So no rebalancing. However there will be some admin as companies disappear and appear.

VLS100 is defined to be x% by value of a US tracker, y% by value of a UK tracker etc etc. As the values of the constituent trackers change by different amounts the actual % by value allocations will change. It will be necessary to for example sell some US in order to buy some UK so that the %s return to their specified values. This is rebalancing.

Why do you care - its all the internal operations of the fund?

coastline

jdw2000 wrote: »

Very interesting and informative thread.

For a novice such as myself a passive, simple tracker sounds appealing.

The standouts seem to be the Vanguard FTSE All World ETF and the Vanguard Life Strategy 60 / 100 funds.

Any key or important differences between them to be kept in mind? I believe a question was asked earlier as to whether the FTSE All World one re-balanced as the VLS one does?

For a view of performance you can set both Vanguard funds against the MSCI World Index..

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

Select IA Unit Trusts & OECI's...Vanguard Investments UK Ltd...then Vanguard Lifestrategy 100% Equity Acc and 60% Equity Acc..

Again using the MSCI World link you can see the performance of 1 3 and 5 years which shows 23.6% 42.7% and 99.3%.
You can see from the link below that the MSCI World Index is currently around 50th out of 257 Global funds using the 1 3 and 5 year tabs.

https://www.trustnet.com/ratings/?moreresult=true&univ=O&Fr_Sector=O:GLBLGRTH&Fr_Submit=true&Fr_sortedColumn=P12M,UnitNameFull&Fr_sortedDirection=DESC

From the above list of funds I've noticed Orbis Global Equity Standard which is actively managed and is showing well over 1 3 and 5 years.As far as I know its not a fund which gets a mention on here so maybe someone will comment on it ?
I've viewed it on the MSCI World link below and it goes back to 1990 and seems to have a decent track record.
Just thought I'd mention it to get some views from posters..
Select IA Unit Trusts & OEIC's...Orbis...Orbis Global Equity Standard.

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

jdw2000

So, the Vanguard FTSE All World ETF sounds like the best one for a novice like me then.

- Low-charges (as it's not managed)
- No trading (as it has a pre-selected portfolio)
- Safe-ish as it is diverse geographically and industrially
- Hopefully a decent return over time as it's 100% equity (which I don't mind)

I'm assuming these performance figures are considered good, which they look to me:

2013: 15.24%
2014: 9.21%
2015: -2.38%
2016: 27.89%

http://www.morningstar.co.uk/uk/etf/snapshot/snapshot.aspx?id=0P0000WAHE&tab=1


Overall, a decent first choice for a novice investor?

(Other than it being 100% equity, it seems also to tick all the boxes in the video on monevator, too: whole world; don't try to beat the markets, low cost; un-managed; diverse; not selecting your own investments etc).

MPN

Yes I agree the Vangusrd FTSE World ETf or the Life Strategy 100 seem to meet the remit for most people on the forum but we can't dismiss the L & G funds?

jdw2000

Is there a best place to buy these products? Trustnet?

Also, a Financial Adviser I was speaking to mentioned something about setting up an 'investment account'. Is this a specific type of account, or did he mean simply a normal bank account set up for the purposes of using to keep money which will be invested?

dunstonh

jdw2000 wrote: »

Is there a best place to buy these products? Trustnet?

Also, a Financial Adviser I was speaking to mentioned something about setting up an 'investment account'. Is this a specific type of account, or did he mean simply a normal bank account set up for the purposes of using to keep money which will be invested?

That would be for unwrapped holdings. Outside of any tax wrapper.

coastline

jdw2000 wrote: »

Is there a best place to buy these products? Trustnet?

Also, a Financial Adviser I was speaking to mentioned something about setting up an 'investment account'. Is this a specific type of account, or did he mean simply a normal bank account set up for the purposes of using to keep money which will be invested?

A guide used by posters on here which is updated on a regular basis..

http://monevator.com/find-the-best-online-broker/

http://monevator.com/compare-uk-cheapest-online-brokers/

jdw2000

dunstonh wrote: »

That would be for unwrapped holdings. Outside of any tax wrapper.

So that's just a normal bank account then?

He seemed to think that there should be an investment account alongside my pension and ISA accounts with Aegon, but there isn't one there.

At present I have just put £15,240 into my Aegon ISA. Come April next year I plan to put another £20K into the ISA. The investment account was to put the money in the meantime. Does it make any difference if those funds are kept in my Santander 123 account in the interim?