Share dealing platforms - totally confused

ValiantSon

A_T wrote: »

No it's not answered. So where did I say Vanguard FTSE Global All Cap Index fund was cheaper than VLS100?

Yes, your question is answered in the post that you quoted! For your benefit, however, I shall quote the relevant paragraph again for you (with some bolding of text to help you out)!

The implication of this was that the OCF would be the drag on the portfolio (you can't have meant that all actively managed funds will be outperformed by an index tracker - not that these are actively managed - because that is demonstrably untrue). I demonstrated that one of the two funds you cited was actually more expensive than the ones the OP was considering. It is, therefore, reasonable to point this out, and (once again) disingenuous of you to suggest that the higher price is, "very small". You used that fund as an example of a cheaper option that would therefore have less drag on returns, but it is not cheaper, and so returns might well reasonably be lower by using it. Equally, the returns might be better due to sector or geographical allocation, but the point remains that the OCF difference can have drag on returns, and that you had clearly implied that these were better options because of the costs.

bowlhead99

A_T wrote: »

I value your opinion bowlhead so over long periods of time which do you believe will perform better?

After a long period of time (like 8 years), X may perform better than Y. After a different long period of time (like 15 years), Y may perform better than X. And after another long period of time (like 25 years), X may perform better than Y. And if we left it a couple of years before we started the clock, and only invested in 2020 instead of 2018, the X and Y rankings might flip around for all those time periods.

I think it's fair to say that I don't think one fund is 'more likely than not' to prevail over a generically 'long' time period just because of one being passive and the other being active, or one having a marginal advantage on costs. That was why I was asking what was your basis for expecting the global trackers to perform better: ("The two funds you mention are actively managed funds. Over long periods of time it is more likely than not that they will be outperformed by funds which tracks a global index")

Generally, I don't think UK listed companies will produce the greatest or the worst growth over the next [multi decade investment period]; I expect they will be beaten by Asia-ex-JP and EM - however with Japan's demographics there could be another 'lost decade' in Japan as there has been in the past, and Europe on average doesn't seem better poised for growth in sterling terms than UK is. So the main question (as it's the largest component of a global index or a Consensus fund) is USA market performance.

Historically one would say that the US has and will produce the best results because of it being, fundamentally, a more capitalist country. Comparing that biggest and best free market in the world with UK and Europe with their higher levels of regulation, government intervention and taxes, one would presume that a world index with a large US allocation would - over a long period - produce a better return (albeit more volatile) than 'overweighting' the UK and Europe against US and EM as is done by the Blackrock Consensus fund.

However of course at the moment we can see that US listed companies are priced at particularly high earnings multiples vs historic averages, in part due to recent taxation changes from their madcap president which may reverse with a future government. And who knows how the whole 'trade war' will work out. So, buying a higher weight of US today via a global tracker - rather than buying a lower weight and periodically rebalancing - may have adverse consequences for the next decade or however long it takes for the negative effect of buying at a large CAPE to work through the system. Certainly if you look at an old chart of Japan's stock exchange returns when that country went from being the largest market by market cap, to not being by a long way - you can see some countries can spectacularly fall from grace.

Of course, the long long term is longer than a decade or so, and over the long long term it's not much of a stretch to say that the markets of capitalist USA will outperform those of socialist Europe and UK, even if it loses ground over China or someone else.

On balance, my own expectation is that having an extra 10% in each of UK and Europe, and a corresponding reduction in US and EM, would be enough of a detractor from the performance of Blackrock Consensus to see it beaten by a global tracker over the long term. Though as it is a managed fund, those specific overweights and underweights you see in the last factsheet may not endure.

What you can say is that Blackrock did not create their Consensus fund range to give the greatest performance at all costs. At some level they look to take the 'consensus' asset allocation being used by certain industry participants. Not what the global marketcaps of different regions happen to be. As their target investor base is UK and Europe it is not surprising that they have higher weightings to those areas because that is a rational way to invest and that is what the investors whose 'consensus view' the fund is taking, are doing. Blackrock (or Vanguard in their equivalent) are deliberately creating a product for people who don't want to ride the volatility wave of a global tracker, while offering it at a similar cheap price to the global tracker, and making available separately a global tracker product for those who want that instead.

Because the target is not directly to get a higher longterm valuation than a global tracker, it may be fair comment to say that we'd expect a lower outright longterm valuaton, though we couldn't be surprised if at some points it was higher than the global index based on its different mix of assets working out well.

ValiantSon

bowlhead99 wrote: »

Of course, the long long term is longer than a decade or so, and over the long long term it's not much of a stretch to say that the markets of capitalist USA will outperform those of socialist Europe and UK, even if it loses ground over China or someone else.

There are no socialist governments in Europe, nor have there been for well over 20 years. The economic model (and state regulation) within European countries is not socialist either. More appropriate would be referring to them as social market economies (which are fundamentally capitalist).

bowlhead99

ValiantSon wrote: »

There are no socialist governments in Europe, nor have there been for well over 20 years. The economic model (and state regulation) within European countries is not socialist either. More appropriate would be referring to them as social market economies (which are fundamentally capitalist).

Yes agreed. Really I was just being lazy struggling for 'what's the opposite of capitalism' to make a point about the US being very capitalist, but didn't want to use communism

Capitalism and lack of government intervention into people doing what they want with their resources rather than having someone control and regulate what they do, is what gives rise to raging high stockmarkets. In the US, the democrats as the most left-wing political party are more liberal than the republicans but would still be regarded as being on the 'right' (in terms of communism / capitalism ; regulated market / free market) when looking at the average postion of UK/European mainstream political parties. Leading to greater profit potentials and a motivator for higher rates of revenue/ profit/ valuation growth. Which is (to an extent, but not entirely) priced in to what people will have to pay for a US listed company today.

A_T

ValiantSon wrote: »

Yes, your question is answered in the post that you quoted! For your benefit, however, I shall quote the relevant paragraph again for you (with some bolding of text to help you out)!

That's you quoting yourself. Where have I said the Vanguard FTSE Global All Cap Index fund was cheaper than VLS100? Provide a quote rather than attempting to misrepresent others' positions.

ValiantSon

A_T wrote: »

That's you quoting yourself. Where have I said the Vanguard FTSE Global All Cap Index fund was cheaper than VLS100? Provide a quote rather than attempting to misrepresent others' positions.

I'm sure that you do actually understand what I have written as it is pretty clear. I'm not going to continue this with you because it is evident that you are spoiling for an argument.

A_T

ValiantSon wrote: »

I'm sure that you do actually understand what I have written as it is pretty clear. I'm not going to continue this with you because it is evident that you are spoiling for an argument.

You should know that I don't believe the Vanguard FTSE Global All Cap Index fund is cheaper than VLS100. It clearly isn't. And you know I never said this.

You claim that I "used that fund as an example of a cheaper option that would therefore have less drag on returns". I've never claimed this and you won't be able to demonstrate that I did.

You said that

The buying power of £6,000 is low and the chance of creating a well-diversified portfolio with that amount of money is infinitesimally small except through purchasing one multi-asset fund. There is no advantage at that level of buying additional funds as the sums invested would be extremely low and the concomitant costs disproportionately high.

It was demonstrated to you that this was not true. You didn't like the fact you'd been proved wrong. Then bowlhead destroyed your arguments and you decided you didn't want to talk about it any more.

ValiantSon

A_T wrote: »

You should know that I don't believe the Vanguard FTSE Global All Cap Index fund is cheaper than VLS100. It clearly isn't. And you know I never said this.

You claim that I "used that fund as an example of a cheaper option that would therefore have less drag on returns". I've never claimed this and you won't be able to demonstrate that I did.

You said that It was demonstrated to you that this was not true. You didn't like the fact you'd been proved wrong. Then bowlhead destroyed your arguments and you decided you didn't want to talk about it any more.

Believe what you want. Bowlhead didn't comment on what you are trying to argue with me about.

You are spoiling for an argument (which I think is pretty pathetic), but I am not going to give you one. I have decided to withdraw from this because you are trying to pick an argument, and for no other reason. I have no interest in continuing this simply because I don't like your attitude.

Don't bother replying as you have now joined the rarefied company of my ignore list. So rarefied, in fact, that you are the only name on it.

A_T

ValiantSon wrote: »

Believe what you want. Bowlhead didn't comment on what you are trying to argue with me about.

You are spoiling for an argument (which I think is pretty pathetic), but I am not going to give you one. I have decided to withdraw from this because you are trying to pick an argument, and for no other reason. I have no interest in continuing this simply because I don't like your attitude.

Don't bother replying as you have now joined the rarefied company of my ignore list. So rarefied, in fact, that you are the only name on it.

You can't expect to misrepresent posters and expect not to be challenged on it. Also there's no shame in admitting you're wrong sometimes.

ValiantSon

A-T, you are on my ignore list. There is no point replying to me.

You have tried to pick an argument because I said that what you wrote implied something and you have continued to insist that I show you where you said something. You have become increasingly aggressive over it, even though I have shown you exactly what I said, which was that this was an implication of what you said. I don't like your attitude.

In your previous post you conflated two issues. If I am wrong then I will admit that I am. A search of my post history will reveal several instances where I have done so. I am now ignoring you, not because I can't admit that I am sometimes wrong, but because I find you to be overly aggressive and determined to pick a fight. The very fact that you felt it necessary to reply after I had said you were on my ignore list just demonstrates that you have to have the last word and you can't let things go.

I'll say it one more time, just so we are clear: I don't like your attitude and you are on my ignore list.