Life Strategy / Vanguard FTSE Global All Cap Index

Alexland

Agree, the HSBC FTSE All World fund is more attractive if holding larger sums using on a fixed price platform (iWeb, Halifax SD or II). The Vanguard ETF might be useful for a larger sums on a platform without funds (Jarvis X-O). For smaller amounts its hard to beat Vanguard Investor.

short_butt_sweet

MrWizard wrote: »

The vanguard one is very new and only has a size of £93 million. Tiny versus VLS and HSBC. Do you think that's a concern?

in this case, no. IMHO, you probably should avoid buying a fund that is in danger of not being viable and being closed down.

however, vanguard don't generally open and then close down lots of funds; they are usually in it for the long haul. and i think they already have a larger US-based fund, tracking the same index as this UK-based fund, which should reduce some costs. in that context, £93m is not too bad.

MK62

Linton wrote: »

Vanguard FTSE Global AllCap has outperformed VLS100 in the two years it has been available. Like you I would be tempted by its broader diversification and lower UK

According to Trustnet, over the 2 years the AllCap fund has been available, the returns are practically the same....

Granted, two years may not be long enough to make a true judgement, but on the face of it, there's currently little in it - it doesn't appear you will gain much by switching, though it doesn't appear you would lose anything either.

So, all in all, there doesn't appear to be much in it at the moment - it's going to come down to a conviction call here (basically opinion) on the likely future returns on offer......the sterling exchange rate could have more of a bearing than the underlying investment performance, though at the moment that could go either way too.

A_T

MK62 wrote: »

According to Trustnet, over the 2 years the AllCap fund has been available, the returns are practically the same....

Granted, two years may not be long enough to make a true judgement, but on the face of it, there's currently little in it - it doesn't appear you will gain much by switching, though it doesn't appear you would lose anything either.

So, all in all, there doesn't appear to be much in it at the moment - it's going to come down to a conviction call here (basically opinion) on the likely future returns on offer......the sterling exchange rate could have more of a bearing than the underlying investment performance, though at the moment that could go either way too.

Exchange rate won't make much difference to VLS100 vs FTSE Global All Cap because the FTSE100 is 75% overseas earnings.

AnotherJoe

MrWizard wrote: »

I was thinking of swapping my VLS 100 for the Global All Cap.

However the 22% weighting in the UK is probably 3x overweight however if you look at the top 10 holdings about 90% report revenues in USD, so I wouldn't really look at this being as overweight.

Does the global all cap automatically adjust like VLS?

It's overweight in a few volatile and risky sectors. That's why IMNSHO it should be avoided. Yes the global adjusts in exactly the same way. It's an index fund, that's what they do.

Audaxer

MrWizard wrote: »

Does the global all cap automatically adjust like VLS?

No, the global all cap is one index so nothing to adjust, whereas the VLS100 is made up of a number of indexes which I believe are automatically rebalanced back to their original percentages.

MK62

A_T wrote: »

Exchange rate won't make much difference to VLS100 vs FTSE Global All Cap because the FTSE100 is 75% overseas earnings.

True, but then I didn't claim any difference would be "much".....

In any case, many FTSE100 companies continuously hedge at least part of those overseas earnings anyway, so it's not quite as simple as that - granted, forex risk won't have as much effect as it would if VLS100's UK exposure was all Sterling earnings, but it will still have an effect.


The bottom line is that there isn't much performance difference between the funds anyway.....and tbh, personally I wouldn't expect there to be that much difference in the future either - all I'm saying is that "the sterling exchange rate could have more of a bearing than the underlying investment performance, though at the moment that could go either way".....nobody really knows though!

System

MK62 wrote: »

True, but then I didn't claim any difference would be "much".....

In any case, many FTSE100 companies continuously hedge at least part of those overseas earnings anyway, so it's not quite as simple as that - granted, forex risk won't have as much effect as it would if VLS100's UK exposure was all Sterling earnings, but it will still have an effect.


The bottom line is that there isn't much performance difference between the funds anyway.....and tbh, personally I wouldn't expect there to be that much difference in the future either - all I'm saying is that "the sterling exchange rate could have more of a bearing than the underlying investment performance, though at the moment that could go either way".....nobody really knows though!

Do you have any examples?

Linton

Any large multinational company, no matter on which exchanges they are quoted, may use currency hedging as part of its normal operations. However that is very different to hedging the share price.

Rookie13

Given long enough timewise, do these things not even out? A genuine question for the "seasoned" investors here.

Sorry, I was referring to Another Joe`s post 16.