Lifestrategy 100 vs vanguard global all cap index vs vwrl

Fatbritabroad

Hi possibly silly question but i read a comment on here the other day that people buying lifestrategy 100 may as well buy vanguard global all cap. I assume thats not the case and there are differences. I'm just trying to educate myself as to what they are!

Ive held life strategy 100 for about 5 years but have always been slightly concerned about the uk home bias which I believe the global all cap has less of.
I get a bit confused between the lifestrategy 100 vwrl and vanguard global all cap as to what the difference is (other than i realise one is an etf,one js a fund of funds and one is an index tracker). I also note vwrl holds less companies than the all share. Can someone explain in words of one syllable for me what the differences are and when its appropriate to use them

Would i be right in thinking that vwrl and global all cap are perhaps best suited for someone with a slightly larger portfolio for use as a core investment with satellites in areas they wanted to be overweight? Is vwrl and global all cap both also fine as a one stop solution?

Apologies if these are silly questions.i don't pretend to be an experienced investor hence why im currently in a one stop solution! but at some point I'll want to try and build my own and i enjoy learning any way:j

Prism

Lower fees is one consideration. The OEIC version of the Vanguard FTSE all cap tracker has a charge of 0.24%, and the ETF version has a charge of 0.15%. Both represent a market cap view of the world equity market. The VLS 100 has a charge of 0.22%.

Secondly as you point out, VLS is heavy on the UK 25% vs 5.8%. Hard to say if this is a good or bad thing.

Alexland

Prism wrote: »

The VLS 100 has a charge of 25%.

0.22% surely?

Prism

Alexland wrote: »

0.22% surely?

Yes, cheers. Still never sure if to add the 0.08% transaction that the ETF doesn't report on and the OEIC says is 0%. If we do that makes it 0.3%, 0.24% and 0.15%

Alexland

Prism wrote: »

Yes, cheers. Still never sure if to add the 0.08% transaction that the ETF doesn't report on and the OEIC says is 0%. If we do that makes it 0.3%, 0.24% and 0.15%

The transaction costs are interesting but probably too immature to be used as the basis of meaningful comparison. For example it's not clear to me why the transaction costs for Blackrock Consensus are so much lower than VLS when they are very similar strategies? Is it really true that Vangaurd are incurring high costs or are they performing the calculations differently?

They can be meaningful at the extremes where the transaction costs on a concentrated buy-and-hold fund (such as Lindsell Train or Fundsmith) are very low or with momentum strategies (such as the Vanguard Momentum factor ETF) can be higher than the OCF.

Alex.

Prism

Also, access to the low cost ETF seems limited as its in USD. My platform has the 0.24% OEIC fund and a 0.25% ETF. From what I can tell HL doesn't offer the low cost version either

A_T

Vanguard report the total cost of investment for VLS100 (less platform fee) as 0.30%. Their FTSE Global All Cap Index fund is 0.24%.

https://www.vanguardinvestor.co.uk/content/documents/legal/vanguard-full-fund-costs-and-charges-2018.pdf

The only good reason I can see for choosing VLS100 is if you believe a UK biased fund will perform better.

bostonerimus

If you want more of a UK bias use VLS100, but it's more important to pick one and invest regularly through the ups and downs rather than worrying about which one will do "better". Choice is bad when it produces paralysis.