VWRP vs. LS 100

cisamcgu

Dear knowledgeable people,

A quick, and hopefully simple question ..

Is Vanguard VWRP [FTSE All-World UCITS ETF]

comparable, as an EFT, with

Vanguard LifeStrategy 100% Equity ?

i.e. If I was to sell some of the fund and buy the EFT, would this be pretty much a "like for like" swap ?

I'm asking because I assumed it was, but on Friday, for instance :
The EFT lost 0.43% whereas the Fund gained 1.18%

Thanks

ColdIron

VWRP tracks the FTSE All-World Index, VLS100 doesn't track any single index. It is comprised of several other trackers and the allocations are set by Vanguard which could of course change. Then there are the structural differences between an ETF and an OEIC. Not a 'like for like' swap at all

cisamcgu

Thanks.

I understand that there are technical differences, but would one expect them to move in the same direction most of the time ?

AlanP_2

As a starting point you could compare the geographical spread for both funds and see where the differences are as I suspect that is what you are seeing the results of.

The ETF will invest in x number of global companies aligned with its chosen index.

The VLS range overweight UK stocks significantly compared to a global index.

No idea what happend in markets on Friday to Stocks or Sterling but if UK Stocks went up more than a baket of global stocks and / or Sterling rates moved in the right direction then VLS 100 would move up whilst ETF went down.

As stated above they are not identical productsn except in the generl sense of being ways to gin exposurre to global equities in some form.

Powysshrew

As AlanP says they are very different in geographical spread: VLS100 is 22.45% UK and 42.57% USA, meanwhile VWRP is 5.1% UK and 52.22% USA.

bowlhead99

Also note that VWRP is traded on the public market (London stock exchange) throughout the market hours, with last price set at 4.30pm - so the price change you saw for Friday will be the movement from the last trade reported at 4.30 Thurs to 4.30 Fri.

However, the price for Lifestrategy is based on the valuation of its assets at 9pm (after the North and South American markets close), and is not published until the next day. So, even if you're waiting until the price is properly updated on your investment platform or media outlet of choice, and taking the 'right' price for Friday, the fund valuation is going to reflect another half day of North American market activity.

It's quite possible for the valuation change in the market to be down from 4.30pm to 4.30pm the next day (as shown by the ETF price) while being 'up' from 9pm to 9pm the same day (as shown by the open ended fund price), even if it was the exact same market being tracked. And in this case it isn't the exact same market - it's a different blend of markets.

As markets can move a percent or two in a day, this offset timing difference can result in a percent or two difference over a day, month, or year - whatever date range you look at. You can get this even when looking at two trackers that track the same index, if they have different valuation point within a day - so need to be careful not to jump to conclusions that one fund is doing a better job than another. But this effect won't build up over time, so it's not like 1% in a given month would build up to 12% a year, for example; the offset is still about 4.5 hours at the beginning of the data and 4.5 hours at the end of the data.

bowlhead99

quirkydeptless wrote: »

What's the difference between VWRP and VWRL?

The newer VWRP is an accumulating share class i.e. it doesn't pay out dividends - so if you are not using an ISA or pension to hold it, you will need to study their reports published once annually to see what excess income was earned and reinvested rather than distributed to shareholders in the time you held it, so you can track your taxes properly.

cisamcgu

Thanks everyone, that is much clearer !

I hadn't considered the valuation time.