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In terms of income funds then trackers seem to perform fairly poorly.
I've got the vanguard uk version and it's underperformed in its sector, it's maybe an area where managers can anticipate dividend cuts and capital drops from issues like dividend cover, cash flow etc whereas most trackers just focus on a particular yield.
It's very heavy in uk given predominance of uk stocks, my default is to use passives but income is an area where managers seem to have an edge.
Thanks, how would you compare holding that vhyl etf to this one (the dividend income is about half for this one):
http://www.hl.co.uk/shares/shares-search-results/v/vanguard-funds-ftse-all-world-etf-usdgbp?tab=security_details
I don't mind trackers not competing with the top funds, I don't want to take the chance of ending up with a poor performing fund, I hope I am correct in thinking that I am likely to be around the average with a tracker?
What I am very unsure of is getting the balance between higher dividend income and growth performance, and also defensive qualities in a crash like situation?Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
chucknorris wrote: »Thanks, how would you compare holding that vhyl etf to this one (the dividend income is about half for this one):
http://www.hl.co.uk/shares/shares-search-results/v/vanguard-funds-ftse-all-world-etf-usdgbp?tab=security_details
I don't mind trackers not competing with the top funds, I don't want to take the chance of ending up with a poor performing fund, I hope I am correct in thinking that I am likely to be around the average with a tracker?
You'll get exactly what they track, whether that's good, bad or indifferent. This below might help explain the differences in the two you mentioned:
http://www.ftse.com/Analytics/FactSheets/Home/DownloadSingleIssue/AWHDY?issueName=AWHDY0 -
You'll get exactly what they track, whether that's good, bad or indifferent. This below might help explain the differences in the two you mentioned:
http://www.ftse.com/Analytics/FactSheets/Home/DownloadSingleIssue/AWHDY?issueName=AWHDY
Thanks but I know what they consist of, what I meant was that one pays circa 2% and the other 4% in dividend income, that probably means that the 2% etf will probably have more growth potential. But how are they likely to perform in a downturn? Will the higher yield etf tend to not crash as much. I can see that the non high yield etf is more diverse, but I was wondering in a downturn would the higher yielding etf be perceived as more defensive, and tend to perform better than the other one, in terms of it not crashing as much?Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
chucknorris wrote: »But how are they likely to perform in a downturn? Will the higher yield etf tend to not crash as much. I can see that the non high yield etf is more diverse, but I was wondering in a downturn would the higher yielding etf be perceived as more defensive, and tend to perform better than the other one, in terms of it not crashing as much?
Not sure there's a definitive answer to that question. VHYL targets the highest-yielding segment of the FTSE All-World Index so I'm not sure you can say whether the highest yielders are more or less likely to fare better in a crash. Especially when as far as I can see, there's not any further selection criterion than the yield.
Unlike other dividend-focused indexes, the FTSE All-World High-Dividend Yield does not evaluate the ability of its constituents to sustain their dividend payments. Morningstar's equity factor analysis shows that the companies within the portfolio are, on average, less profitable and more leveraged in comparison with other dividend-focused funds. They reckon this could translate into higher probability of capital losses and/or lower realised income since the companies are more likely to cut their dividends.0 -
Not sure there's a definitive answer to that question. VHYL targets the highest-yielding segment of the FTSE All-World Index so I'm not sure you can say whether the highest yielders are more or less likely to fare better in a crash. Especially when as far as I can see, there's not any further selection criterion than the yield.
Unlike other dividend-focused indexes, the FTSE All-World High-Dividend Yield does not evaluate the ability of its constituents to sustain their dividend payments. Morningstar's equity factor analysis shows that the companies within the portfolio are, on average, less profitable and more leveraged in comparison with other dividend-focused funds. They reckon this could translate into higher probability of capital losses and/or lower realised income since the companies are more likely to cut their dividends.
Thanks, that actually answers my question, so they are not traditionally defensive type companies (I should have realised of course). I need to think out my strategy because in 2-3 years after selling investment property, my main investment will become equities, as well as my main source of income.Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
HarryFlatters wrote: »Its finding an all world tracker on IWeb that I'm struggling with, I am waiting for them to come back to me with the reasons for not accepting the HSBC fund. May just bite the bullet and set out funds for each region.
i see that iweb do have fidelity index world (class W or class I - either class has the same charges now). that only covers developed stock markets, unlike the HSBC fund, which covers both developed and emerging.
so you'd need to add an emerging markets fund (e.g. vanguard's) if you want to include them. that would be 2 funds for equities, compared to about 6 if you buy a fund for each region.0 -
Thank you for looking, I am nearly there with my research now, I had considered Black Rock emerging markets tracker too as part of a wider collection on fund types, will have another look at Vanguard, they do seem to cover most angles !!
I did also find within HSBC a Global Strategy Balanced Portfolio with an OCF of 0.19 and a bond holding giving a not dissimilar outlook to VLS60 with a smaller (3.5%) exposure to UK equity.0 -
i hadn't looked at that HSBC global strategy fund before. it does look comparable to VLS60. apart from the lower allocation to UK equities, it also has a specific property allocation (unlike VLS).0
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HarryFlatters wrote: »Monroe, thanks for persevering
Its finding an all world tracker on IWeb that I'm struggling with, I am waiting for them to come back to me with the reasons for not accepting the HSBC fund. May just bite the bullet and set out funds for each region.
I prefer buying separate ex-UK, UK, and EM trackers to an All-World tracker like the HSBC one you mention, buying UK and ex-UK in proportion to their global capitalisation. It's slightly cheaper (about 0.15% plus additional trading costs vs 0.2%), it allows me to have a small tilt to EM by giving it a slightly higher weighting, and I'm buying separate small cap, property, and value trackers as tilts anyway so its not any additional work. It gives me a little more flexibility to chase OCFs as they proceed further down, and exploit that competition, not only in funds but in platform charges. It just seems more future proof a strategy. Sure, trading costs are a little higher, but with a large enough portfolio not enough to substantiate choosing a higher OCF. Crank the numbers.
Or you could go the other direction with an even wider tracker to capture small caps, such as the FTSE Global All Cap Index instead of the FTSE All World index, by using a tracker like the new Vanguard FTSE Global All Cap Index Fund albeit at 0.24%, but may be appealing if the portfolio size is of the right size (i.e. small enough to be easily swayed by trading costs but large enough to be on a per-trade priced platform). Crank, crank, crank, ...0 -
i agree the new vanguard global all cap fund looks good if you want an all-in-1 solution (for your equities). it's not on iweb yet, though.
you can do the split-into-3 approach on iweb. e.g. using vanguard dev world ex-UK + vanguard UK all share + an EM tracker.0
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