Fidelity Index World vs VLS100

Jeems

So I'm on the verge of the transferring my previous years cash ISAs (circa 40k) into my S&S ISA.

Currently I have a small amount amount in VLS80 but I've decided I would prefer to go down the 100% equities route - I'm in it for the very long term, and I dont need to touch the £40k at all.

So the 2 I'm considering are the funds I mentioned. I'm leaning towards Fidelity World at the moment due to less UK exposure although the 58% US exposure is a slight concern. There is also a lack of EM exposure within FW so I'd need to purchase a fund to cover that. The ongoing charge is also slightly cheaper than VLS100.

I'm by no means decided, so I'd appreciate any thoughts on this. I'd be happy to hear of similar funds that I can consider as well.

Also I noticed there are A, I, P and W versions of the FIW fund on HL. This may be a moot point as I'm with iweb who only have the W version available - but what is the difference between the letterings?

dunstonh

The ongoing charge is also slightly cheaper than VLS100.

it would be. One is a tracker and the other is a fettered fund of funds.

but what is the difference between the letterings?

Different share classes have different charges. Some are for different distribution channsels and may not be available to you on your chosen platform.

bowlhead99

They are very different funds.

One doesn't give you any exposure to emerging markets and it is a pretty strange thing to want to avoid emerging markets if you have decided you'd like the risk profile of 100% equities over the "very long term". So presumably if you bought that fund that concentrates solely on the developed world you would also buy an EM fund and rebalance from time to time.

The Fid fund puts 93%+ of your investments in foreign markets and the investments it holds that are listed in the UK are weighted to the very largest multinationals in a few specific sectors. That is an incredibly "anti UK" stance to have for the next few decades, presuming you are likely to retire here in the end.

So, as an "all in one" allocation for a pension I wouldn't use the fidelity fund because:
- avoiding emerging markets is silly
- having all but about 3% of your portfolio be either in foreign markets or the top ten London-listed oilers/miners, banks and pharma giants is unnecessarily aggressive as a UK investor.


On the fund lettering, many funds have multiple "classes" with same underlying asset exposure but a different rate of management fee and access terms. So there may be a version designed for institutions with £1 million minimum commitment and a version with £500 minimum investment for individuals at a different price, or even a super-cheap version accessible only with £50m invested unless at the managers discretion (such as by going to the manager's own in-house platform for a hefty fee).

Investing through a fund supermarket may let you access versions you couldn't access yourself because they already have a big chunk of money from their customers with that fund manager. Basically just buy the cheapest one you can in terms of all-in cost (fund running cost plus platform access cost).

Factsheet or prospectus will show the charges for the class you are looking at.

ColdIron

Jeems wrote: »

So the 2 I'm considering are the funds I mentioned. I'm leaning towards Fidelity World at the moment due to less UK exposure although the 58% US exposure is a slight concern. There is also a lack of EM exposure within FW so I'd need to purchase a fund to cover that. The ongoing charge is also slightly cheaper than VLS100.

The lower UK and higher US makeup of the Fidelity fund compared to the VLS is because it's tracking the MSCI World Index and that's what it's composed of. That's also why it has no EM component as the index restricts itself to the developed world. I you want a simple tracker with EM exposure perhaps look at something that tracks the MSCI ACWI Index orthe FTSE All-World Index. Myself I don't see some home bias as a bad thing and wouldn't feel comfortable with 6-7% but that's a matter of personal opinion

If you use HL for research they will show all the charge classes but they only make the W class available

Jeems

dunstonh wrote: »

it would be. One is a tracker and the other is a fettered fund of funds.

So in essence, not good to compare the two then? Is there another decent "all in one"that I can compare VLS to, I know L&G has a similar range but from what I recall they very little UK exposure.

bowlhead99 wrote: »

They are very different funds.

One doesn't give you any exposure to emerging markets and it is a pretty strange thing to want to avoid emerging markets if you have decided you'd like the risk profile of 100% equities over the "very long term". So presumably if you bought that fund that concentrates solely on the developed world you would also buy an EM fund and rebalance from time to time.

I want a balanced portfolio without the need to touch very much over the years. I was thinking a fund like a VLS or FIW as my "main" fund, complimented by an EM fund and possibly a specialist sector eg tech. Between 3-5 funds would be ideal for me.

Is that reasonable do you think?

Ray_Singh-Blue

Jeems wrote: »

Is there another decent "all in one"that I can compare VLS to

VWRL

from https://www.vanguard.co.uk/uk/portal/detail/etf/overview?portId=9505&assetCode=EQUITY##overview

"Objective

Vanguard FTSE All-World UCITS ETF seeks to provide long-term growth of capital by tracking the performance of the index, a market-capitalisation-weighted index of common stocks of large and mid cap companies in developed and emerging countries.


Investment strategy

This fund seeks to provide long-term growth of capital by tracking the performance of the index, a market-capitalisation-weighted index of common stocks of large- and mid-cap companies in developed and emerging countries. The fund employs a passive management or indexing investment approach through physical acquisition of securities, designed to track the performance of the index, a free-float-adjusted market-capitalisation-weighted index.
The fund will invest in a portfolio of equity securities that, so far as possible and practicable, consists of the component securities of the index.

About the benchmark

FTSE All World Index

The index measures the market performance of large- and mid-capitalisation stocks of companies located around the world. Includes approximately 2,900 holdings in nearly 47 countries, including both developed and emerging markets.Covers more than 90% of the global investable market capitalisation."

ColdIron

Jeems wrote: »

I know L&G has a similar range but from what I recall they very little UK exposure.

The Legal & General Multi Index range has a similar UK allocation to LifeStrategy