Global Tracker Funds

JohnRo

I'd question why you're choosing those two together, use one or the other imho.

OK Lifestrategy has a bond element and the VWRL ETF doesn't but that can be obtained separately if you must have bonds.

You need to think about the charges you're going to incur on the type of investment vehicle you've chosen and try to reduce those charges as much as possible. Not to the point it dictates what you invest in but certainly to the point of what type of vehicle to use for the chosen investments.

TD will levy a 0.30% annual custody fee on funds so that includes the Lifestrategy fund.

They won't charge anything for holding the ETF currently, if certain account balance criteria are met. You also need to ensure you purchase the ETF via the TD regular monthly investment scheme, that will then only cost you £1.50 commission to purchase with no stamp duty or anything else to pay until you sell.

bowlhead99

No comment on the investment choices, if those are what you want - but you seem to have the right idea of investing outside an ISA until you have more isa allowance available and then selling up and putting the proceeds into the isa at that point.

The fees from TD - 0.3% a year for platform access for Lifestrategy, plus a transaction fee (at special intro rate) to buy the ETF and another to sell it later - will not come to a whole heap of money.

blizeH

So, due to the heavy UK bias in LifeStrategy funds I've switched my focus onto the VWRL (FTSE All-World) ETF.

However, I've just seen that Vanguard have launched a new FTSE Global All Cap Index Fund - any thoughts on this please? It seems to have roughly the same diversification as VRWL (they're so similar I wonder if it's just because the fund lags slightly behind the ETF) but it is 0.01% cheaper.

Is it simply down to preference between going for ETF and a fund? Thanks!

coastline

blizeH wrote: »

So, due to the heavy UK bias in LifeStrategy funds I've switched my focus onto the VWRL (FTSE All-World) ETF.

However, I've just seen that Vanguard have launched a new FTSE Global All Cap Index Fund - any thoughts on this please? It seems to have roughly the same diversification as VRWL (they're so similar I wonder if it's just because the fund lags slightly behind the ETF) but it is 0.01% cheaper.

Is it simply down to preference between going for ETF and a fund? Thanks!

You can view factsheets and total returns in the links below..

http://www.ftse.com/products/indices/geis-series

file:///C:/Documents%20and%20Settings/Administrator/My%20Documents/Downloads/GEISLMS_20161031.pdf

file:///C:/Documents%20and%20Settings/Administrator/My%20Documents/Downloads/AWORLDS_20161031.pdf

DrSyn

A quick look the Global invests in Large/medium/small, companies while the All World invests in Large/medium, companies.

HarryFlatters

Just to jump on the end of this interesting thread, I am considering using the Vanguard Lifestrategy 60% equity fund, however as a true global passive fund it does have a UK focus of 15% which is askew to the global ethos, would an alternative be to use the Global All Cap Index Fund mentioned above split with their Global Bond Index Fund 60/40, I appreciate there would be future rebalancing involved, the Lifestrategy bond split uses nearly 20% in this fund then manually splits the remaining 20% into various individual areas but unsure why ?

jdw2000

Just read a fascinating (from a newbie perspective) article:

http://monevator.com/10-why-houses-are-a-better-investment-than-shares/

Essentially, it's houses v shares as investments. Didn't think of it this way before, but one of the 10 points it makes is that investing in houses is leveragable in a way that shares are not.

ie: you have £10k in your pocket, you can borrow and invest in £100K of house.... you have £10 in your packet, you can only buy £10K of shares because there is no cheap shares mortgage available.


Interesting article for beginners.

dunstonh

HarryFlatters wrote: »

Just to jump on the end of this interesting thread, I am considering using the Vanguard Lifestrategy 60% equity fund, however as a true global passive fund it does have a UK focus of 15% which is askew to the global ethos, would an alternative be to use the Global All Cap Index Fund mentioned above split with their Global Bond Index Fund 60/40, I appreciate there would be future rebalancing involved, the Lifestrategy bond split uses nearly 20% in this fund then manually splits the remaining 20% into various individual areas but unsure why ?

VLS is not a passive fund or a tracker. it is a fettered fund of funds. The underlying funds are passive but to an active asset allocation. The fund is not risk targeted. It is return focused.

For someone that doesnt have the risk profile for 100% equity, a multi-asset fund is usually more suitable.

DrSyn

jdw2000 wrote: »

Just read a fascinating (from a newbie perspective) article:

http://monevator.com/10-why-houses-are-a-better-investment-than-shares/

Essentially, it's houses v shares as investments. Didn't think of it this way before, but one of the 10 points it makes is that investing in houses is leveragable in a way that shares are not.

ie: you have £10k in your pocket, you can borrow and invest in £100K of house.... you have £10 in your packet, you can only buy £10K of shares because there is no cheap shares mortgage available.


Interesting article for beginners.

The other side of the same coin is that if you cannot keep up payments, the bank sells the house and you may end up with nothing. Neither house to live in or any money in the bank.

Investment Trusts do a similar thing when they take a loan from the bank to buy shares. All good when those shares rise in price. If those shares became worthless they still have to repay the loan.

Investment Trusts can have a discount/premium. A good reason why they are not suggested to beginners on this forum.

In 1920's USA buying on margin was very popular. That is borrowing money to buy shares. Before the crash, nearly forty cents of every dollar loaned in America was used to buy stocks. It caused a lot of pain when the crash occurred.

Its not recommend you try it!

There's no such thing as a free lunch. Someone has to pay for it, just be careful its not you.

jdw2000

dunstonh wrote: »

VLS is not a passive fund or a tracker. it is a fettered fund of funds. The underlying funds are passive but to an active asset allocation. The fund is not risk targeted. It is return focused.

For someone that doesnt have the risk profile for 100% equity, a multi-asset fund is usually more suitable.

So...

VLS is is a fund comprising of other % stakes in other funds within Vanguard's own (hence "fettered") offerings?

And VWRL is an actual fund in its own right as it directly has a stakes of various difference stock exchanges around the world? And VWRL is also a tracker, as it's value tracks the various exchanges within it's fund? And as it simply tracks the exchanges, it is also passive?


And aren't all passive funds ultimately sitting on active assets?