Selecting a global index fund

TheShape

TheShape wrote: »

BlackRock Consensus 100 has a UK allocation very close to what you're after.

aroominyork wrote: »

So that's a four way split, or I could hold out for another few suggestions and become the world's most egalitarian investor!

Sorry if I wasn't clear. Rather than being a suggestion to add BlackRock Consensus to any other number of funds, it would be to only hold Black Rock Consensus because that achieved your 15% UK allocation in just one fund.

aroominyork

TheShape wrote: »

Sorry if I wasn't clear. Rather than being a suggestion to add BlackRock Consensus to any other number of funds, it would be to only hold Black Rock Consensus because that achieved your 15% UK allocation in just one fund.

Yup, I know - I was just being flippant.

EdSwippet

NedS wrote: »

... I'd go for whichever has the lowest fees on your platform. For example, L&G International Index Trust (ex UK) is 0.08% on HL so that would be my choice as it's cheapest on my platform.

To my mind, this puts the cart before the horse. The way I approach this, I decide first what I want to invest in, and only then do I select the most efficient platform on which to hold it.

Taking your example fund, Hargreaves Lansdown discounts this fund's fee by 0.05%, but then add on their own 0.45% platform charge. Anyone wishing to hold this fund would do better to pay the full 0.13% to L&G on a different platform that charges less than 0.4%. There are plenty of these -- in fact, aside from Hargreaves Lansdown, no percentage-based platform that I have found charges more than 0.4%.

Absent other effects (such as SIPP charge differences), Hargreaves Lansdown's 0.05% "discount" on this fund fee is an illusory saving.

Alexland

We mostly use ETFs to cap charges on our Fidelity and AJ Bell accounts however it makes no difference on iWeb so we hold the HSBC FTSE All World fund. My logic is that it's more comprehensive than the Fidelity World and cheaper than the Vanguard All Cap.

Alex

Frenske

You might find that mixing more specialized funds may give you better performance than Global funds e.g. one fund focuses on Europe e.g. Man GLG European Growth Fund and an other on America e.g. L&G North America Fund; add a fund that focuses on Asian markets/emerging markets and you are pretty well covered.

Malthusian

aroominyork wrote: »

Very true, but if I get clear in my head on what I'm trying to achieve I'm less likely to mess around with it later.

If you later mess around by switching from one global index fund into another global index fund that differs in observed performance by less than 1% a year (and where the expected effect on performance of choosing one or the other is nil), the only thing that happens is you lose trading costs (if any).

And mental energy, but you saved mental energy when you made a snap decision earlier, so that balances out.

MPN

Alexland wrote: »

We mostly use ETFs to cap charges on our Fidelity and AJ Bell accounts however it makes no difference on iWeb so we hold the HSBC FTSE All World fund. My logic is that it's more comprehensive than the Fidelity World and cheaper than the Vanguard All Cap.

Alex

Alex, would you mind me asking which global ETF's you hold in your Fidelity/AJ Bell accounts as I am currently looking at a global ETF for my SIPP as Fidelity cap the charges at £45 per annum.

Alistair31

MPN wrote: »

Alex, would you mind me asking which global ETF's you hold in your Fidelity/AJ Bell accounts as I am currently looking at a global ETF for my ISA as Fidelity cap the charges at £45 per annum.

SWDA might be a good one to look at ? Works for me

Sally57

Is there any difference in performance between global all world ETF's such as VWRL or VWRP and the OEIC equivalents such as the HSBC FTSE All World Index, or are they very similar?

I know it is cheaper to hold the ETF's on some platforms so is this the best option if the performance figures are roughly the same?

bowlhead99

Sally57 wrote: »

Is there any difference in performance between global all world ETF's such as VWRL or VWRP and the OEIC equivalents such as the HSBC FTSE All World Index, or are they very similar?

Performance wise you would not expect massive differences between them other than operating /transaction costs

I know it is cheaper to hold the ETF's on some platforms so is this the best option if the performance figures are roughly the same?

The main differences which might not be characterized as 'performance' would include:

- ETFs are traded on a stock exchange so have real time pricing, OEICs don't;

- OEICs have FSCS protection, ETFs don't;

- ETFs would be be domiciled overseas eg Ireland or Luxembourg; open-ended funds could be UK (but may also be overseas);

- ETFs may be physically replicated or synthetic (latter having some added counterparty risk) while OEICs would be physically replicated - though practically speaking, the biggest/most mainstream European-based ones these days are big enough to use physical replication efficiently.

-ETFs may be more likely to indulge in stock lending or gearing as their regulatory environment can be more accommodative of that. They will if course tell you if the strategy is to track a geared index rather than a more 'natural' one.