VWRL, SWDA or HMWO?

grey_gym_sock

technically, only vanguard's US-domiciled funds own vanguard itself. but their UK/irish-domiciled funds in practice benefit from the same pricing policy.

i.e. they are trying to retain minimal profits inside vanguard itself, so they cut charges when they can, mainly when assets under management have grown, allowing them to spread fixed costs across a larger pool of funds. if passive management continues to grow in popularity, then they will be able to cut charges more in future.

other managers of passive funds do sometimes match or beat vanguard on cost. at the same time, they often have other funds where the cost seems excessive.

e.g. blackrock(/ishares) have many very cheap passive funds, including SWDA and their other "core" ETFs. but their FTSE 250 ETF (MIDD) is still charging 0.4%, which was once reasonable, but looks pretty expensive now that vanguard have a similar ETF (VMID) charging 0.1% .

Glen mentioned that he doesn't want to sell some ETFs because he'd be paying CGT. some investors who bought MIDD a few years ago in a taxable account must have the same problem.

for this reason, i'd particularly favour using vanguard in a taxable account. in ISA/SIPP, i'm less bothered about it (and there's something to be said for using a variety of managers).

Glen_Clark

From what I have seen, HSBC and BlackRock funds all used to be expensive. Vanguard undercut them, by the time HSBC took Vanguard seriously enough to drop its own charges invesors had already gone to Vanguard. HSBC held on to its high charges for too long. So now HSBC has an ETF cheaper than Vanguard (HMWO) its struggling to get traction. But its cheaper, and backed by a strong bank, so it looks like the Best Buy at the moment. Of course it may not remain cheaper than Vanguard as grey gym sock points out.

StellaN

ArchBair wrote: »

Over 5 years the Henderson Global Growth as delivered 125.7 and Witan 103.3, whereas VWRL 78.2 and SWDA 84.3.

HMWO only has figures for the past 3 years but they are very similar, in fact there is only about 1% difference between all three ETF's over the past 3 years..

I personally would always prefer to hold a global IT or fund rather than either of these ETF's. The performance figures speak for themself. I also noticed that during this recent small correction a global fund such as Fundsmith and a global IT like Bankers has less of a downturn than these ETF's so I can't really see the attraction? I know the charges are very low but this doesn't really compensate holding them bearing in mind the above points.

MonroeM

StellaN wrote: »

I personally would always prefer to hold a global IT or fund rather than either of these ETF's. The performance figures speak for themself. I also noticed that during this recent small correction a global fund such as Fundsmith and a global IT like Bankers has less of a downturn than these ETF's so I can't really see the attraction? I know the charges are very low but this doesn't really compensate holding them bearing in mind the above points.

As I have already mentioned you cannot compare these ETF's to other global funds/IT's because they are totally different types of investments.

Glen_Clark

StellaN wrote: »

I personally would always prefer to hold a global IT or fund rather than either of these ETF's. The performance figures speak for themself. I also noticed that during this recent small correction a global fund such as Fundsmith and a global IT like Bankers has less of a downturn than these ETF's so I can't really see the attraction? I know the charges are very low but this doesn't really compensate holding them bearing in mind the above points.

Some global ITs and funds will do better than Index ETFs, some will do worse. Either way Index ETFs will follow the market down and up more closely because they stay closer to net asset value. When the assets in an IT go down/up it may be a while before the holders start selling/buying. Wheras with an Index ETF its almost immediate.

Eco_Miser

MonroeM wrote: »

As I have already mentioned you cannot compare these ETF's to other global funds/IT's because they are totally different types of investments.

It is always possible to compare things. The result of the comparison may be that they are completely unlike, but that is still a valid comparison.

In this case, both options are collective investments on a world-wide basis, into company shares and/or bonds. So they are not totally different.