Vanguard LS vs buying the underlying funds

Sally57

Alexland wrote: »

Hedging, as used in VLS bond allocations, reduces the currency movements improving the stability of your portfolio.

https://www.etfstream.com/feature/6543_should-you-hedge-your-etfs/

For example Blackrock iShares AGBP which has an ongoing charge of 0.10 %.

https://www.ishares.com/uk/individual/en/products/291771/ishares-global-aggregate-bond-ucits-etf-gbp-hedged-dist-fund

Alex

Thanks Alex. Do you know if there is an accumulating version of this ETF or any other similar accumulating bond ETF/Fund?

Alexland

Sally57 wrote: »

Thanks Alex. Do you know if there is an accumulating version of this ETF or any other similar accumulating bond ETF/Fund?

A quick search on YouInvest ETF QuickRanker brings up: VAGS also at 0.10%:

Vanguard Global Aggregate Bond UCITS ETF GBP Hedged Accumulation
https://www.youinvest.co.uk/market-research/LSE:VAGS

masonic

Alexland wrote: »

A quick search on YouInvest ETF QuickRanker brings up: VAGS also at 0.10%:

Vanguard Global Aggregate Bond UCITS ETF GBP Hedged Accumulation
https://www.youinvest.co.uk/market-research/LSE:VAGS

There is also an OEIC version of that fund with virtually the same name that's been running substantially longer, but is slightly more expensive at 0.15% OCF.

Alexland

masonic wrote: »

There is also an OEIC version of that fund with virtually the same name that's been running substantially longer, but is slightly more expensive at 0.15% OCF.

Yes its 50pc more expensive but the choice of ETF or OEIC fund really depends on your platform fees situation. Of our recently rationalised 8 investment accounts 4 are in ETFs for capped platform fees and 4 are in funds as it makes no difference. Although by value we are probably around 80% ETFs.

https://www.vanguardinvestor.co.uk/investments/vanguard-global-bond-index-fund-pound-sterling-hedged-accumulation-shares/overview

[Deleted User]

bowlhead99 wrote: »

How could it be horrendous in terms of transaction cost or admin to manually purchase the several thousand underlying equities .

It is not proposed that a private investor should cast such a wide net.
Sometimes a fund can lag behind four chosen stocks, bowlhead, to the extent that it may take many years to catch up.
Incidentally, the prospect of finding a "Woodford" style fund deep down in the list would not be a worry.

masonic

ZingPowZing wrote: »

It is not proposed that a private investor should cast such a wide net.
Sometimes a fund can lag behind four chosen stocks, bowlhead, to the extent that it may take many years to catch up.
Incidentally, the prospect of finding a "Woodford" style fund deep down in the list would not be a worry.

Why would anyone invest in funds when they could just pick 4 stocks and beat the performance of the market as a whole?

cloud_dog

Now I'm getting confused. I thought I had it straight with 6 stocks now it seems to have reduced to 4. With a reduction oin the number of stocks will I similarly gain 33% economies of scale?

[Deleted User]

cloud_dog wrote: »

Now I'm getting confused. I thought I had it straight with 6 stocks now it seems to have reduced to 4. With a reduction oin the number of stocks will I similarly gain 33% economies of scale?

bowlhead can explain that, cloud_dog.

Sally57

Alexland wrote: »

Yes its 50pc more expensive but the choice of ETF or OEIC fund really depends on your platform fees situation. Of our recently rationalised 8 investment accounts 4 are in ETFs for capped platform fees and 4 are in funds as it makes no difference. Although by value we are probably around 80% ETFs.

https://www.vanguardinvestor.co.uk/investments/vanguard-global-bond-index-fund-pound-sterling-hedged-accumulation-shares/overview

So are you a fully passive investor now Alex (I seem to remember you holding Monks in the past)? Sorry another question, is holding this type of bond (Vanguard Global Aggregate Bond) better than holding cash in a portfolio? Thanks again.

bowlhead99

ZingPowZing wrote: »

bowlhead can explain that, cloud_dog.

It's ok ZPZ, we can tell when you're being trolled.

Good job cloud_dog isn't serious, as I wouldn't be able to explain why it's a more reasonable approach to pick 4 stocks out of a hat than to invest in a diversified fund, if the goal is to get an acceptable return over a multi year period.

If you have a very broad interpretation of 'acceptable', it can be fine to use the '4 stocks out of a hat' approach, of course.

Sally57 wrote: »

Sorry another question, is holding this type of bond (Vanguard Global Aggregate Bond) better than holding cash in a portfolio? Thanks again.

Similarly this comes down to interpretation / definition of objectives. In this case what would be meant by, "better"?

Generally most would consider that it could produce higher returns over time than cash, and therefore say it had more utility as a diversifier.