Selecting a global index fund

aroominyork

Malthusian wrote: »

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.

OK, let's dig into this.

An investment portfolio should have a strategy. If you don't have a strategy you are more likely to compare the performance of what you hold to what you might have held and then berate yourself when the one you hold underperforms. "Damn, that other one is the one I should have gone for; it perfectly fitted my [undefined] strategy and I've lost out. Maybe I should switch into it - after all, better late than never."

If you have a strategy you know you'll have to ride out periods of underperformance. If you make a bad pick - and we all make them sometimes - then after a decent period of time you might to switch tack, and that's fine.

So I want to be clear whether to pick an all cap index or to manage small/mid caps actively; or whether to pick a fully global index or to cover emerging markets actively. Now you might be different - you might figure any moderately similar handful of stocks will serve you well, but I'd rather be clear about my choices and not risk castigating myself later on if I suffer bad performance on holdings into which I never put enough thought.

stphnstevey

bowlhead99 wrote: »

- OEICs have FSCS protection, ETFs don't;
.

What does this actually mean in practise?
So if the investment company running the ETF, say Vanguard, goes bust then there is no FSCS
So possibly more well established companies running ETFs are better?
If your platform is covered by FSCS and platform goes bust, it doesn't matter if you have ETFs or OIECs, the platform is covered?

Alexland

Alistair31 wrote: »

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

SWDA is a good liquid World ETF but the 0.20% fee is starting to look a bit expensive. If you want accumulation consider Lyxor LCWL and for distributing consider Vanguard VEVE both at 0.12%. The initial purchase spread on these might be around 0.05% higher but that quickly pays back.

Alex

MonroeM

My platforms Fidelity and iWeb do not offer VWRP so I am trying to source an alternative accumulating All World ETF. Does anybody know of another accumulating all world ETF instead of VWRP?

Ixel

https://www.justetf.com/uk/find-etf.html?assetClass=class-equity&region=World&equityStrategy=none&sector=none&groupField=index&distributionPolicy=distributionPolicy-accumulating

I can't see another FTSE All World listed there necessarily, that's accumulating. There's MSCI World but that differs slightly from FTSE All World I guess. I don't know if that's really a deal breaker for you or not. Some possible options, though take into consideration things like the annual charge, spread and fund size.

C_Mababejive

Not an expert but doesnt VWRL pay out a divi whereas the OEIC equivalents can be bought in acc units??
Im looking to push some more money into a global tracker via the halifax isa platform but an struggling to see their individual fund charges which may assist my decision.

EDIT

Ive just found this..

https://www.investments.halifax.co.uk/funds-centre/fund-supermarket/

IanManc

MonroeM wrote: »

My platforms Fidelity and iWeb do not offer VWRP so I am trying to source an alternative accumulating All World ETF. Does anybody know of another accumulating all world ETF instead of VWRP?

IWEB does offer VWRP. Type VWRP into the "company code" box on the dealing screen and click on "verify" and it will give you a price.

bowlhead99

C_Mababejive wrote: »

Not an expert but doesnt VWRL pay out a divi whereas the OEIC equivalents can be bought in acc units??

For Vanguard's London stock exchange listed ETFs:
VWRL is their FTSE All-World ETF share class that pays out dividends and is priced in pounds
VWRD is their FTSE All-World ETF share class that pays out dividends and is priced in dollars

VWRP is their FTSE All-World ETF share class that accumulates dividends and is priced in GBP
VWRA is their FTSE All-World ETF share class that accumulates dividends and is priced in dollars

Vanguard and other providers also have OEIC products available in accumulation or dividend-paying versions. The Vanguard OEICs don't track the All-World, but will track something similar.

Whether or not they pay or accumulate dividends doesn't change the tax treatment of the dividends, it's simply an administrative choice. Vanguard's ETFs and OEICs are all UK reporting funds so if you go for the accumulating versions you will still be able to find out the amounts of undistributed income allocated to the shares you hold, to do your taxes.

Im looking to push some more money into a global tracker via the halifax isa platform but an struggling to see their individual fund charges which may assist my decision.

EDIT

Ive just found this..

https://www.investments.halifax.co.uk/funds-centre/fund-supermarket/

Yes, the Funds centre should allow you to get the info you want for the open-ended funds available on Halifax Share Dealing accounts. I expect the ETFs would come under 'shares' rather than 'funds' as they are available for market trading on a stock exchange, rather than being distributed to investors through a funds platform.

ColdIron

MonroeM wrote: »

My platforms Fidelity and iWeb do not offer VWRP so I am trying to source an alternative accumulating All World ETF. Does anybody know of another accumulating all world ETF instead of VWRP?

Use the Shares Centre tab instead of the Funds Centre tab

aroominyork

bowlhead99 wrote: »

Whether or not they pay or accumulate dividends doesn't change the tax treatment of the dividends, it's simply an administrative choice. Vanguard's ETFs and OEICs are all UK reporting funds so if you go for the accumulating versions you will still be able to find out the amounts of undistributed income allocated to the shares you hold, to do your taxes.

If you hold accumulating OEICs/ETFs outside of a tax wrapper, do you need to calculate the amount of reinvested dividend, declare it to HMRC and pay tax on it at your marginal rate?