which vanguard fund

jamels2

looking to start up a vanguard account and been looking at their funds, global index / etf.

There appears to be 5 options:
1. VYHL 1615 stocks 0.29%
2. VEVE 2190 stocks 0.12%
3. VWRL 3371 stocks 0.25%
4. Dev World Ex-UK Index fund 2078 stocks 0.14%
5. Globall all cap index fund 6466 stocks 0.23%

can anyone recommend the best one? I am starting from 0 and adding at least £100 a month, hopefully a lot more.
The first 3 are ETF and the others traditional index funds, I am unsure if one suits me better than the other. All I know is the dividends are paid separately in the ETF whereas the index fund you can set it to accumulate?

Many thanks for any info, I want to choose the right one based on the advice from lars krojer, JL Collins etc and want to get going asap!

Ixel

Personally I use VWRL (in a non-ISA) or VWRP (in an ISA). Former being 'income' so it's easier to calculate capital gains and/or income for the tax return, the one you listed, and VWRP because it's 'accumulation' which for an ISA wrapper it doesn't matter. VWRL and VWRP (depending on if you want income or accumulation) are both diversified. I currently have over £110,000 split between them both.


I guess it's more about what your goals are and what your risk apetite is, but in my opinion you can't really go wrong with a globally diversified ETF. Just be sure that you're in it for the long term, minimum 5 years, ideally 10 years.

jamels2

Thanks for your reply, the VEVE has a low fee i'm not sure what the catch is? Didn't see VWRP on there? I plan to use a S&S ISA and aim to max it out from april onwards.
A lot of people recommend lifestrategy but the 25% in UK appears quite high.
Still can't make a clear decision regarding ETF or index fund, the all-cap looks good but so does the VWRL!

bowlhead99

jamels2 wrote: »

Thanks for your reply, the VEVE has a low fee i'm not sure what the catch is?

VEVE is cheap to run as it is only the FTSE Developed countries - no emerging markets.

The potential performance disparity may be expected to offset the cost, as emerging markets can outperform developed ones, though vice versa is also true. In the 5 years to December '19, the FTSE All-World returned 54% in USD, while the FTSE Developed got 56.3%. The All-World was dragged downwards because it contained FTSE Emerging which only did 33.7% in the same time period. Personally, I would include Emerging Markets if I was trying to get general global exposure, because, why not?!

EM may give you a more volatile return than focusing exclusively on developed markets. For example, the largest fall in recent memory was the 2007-2009 financial crisis: the FTSE All-World dropped 57.9% from peak to trough, while FTSE Emerging dropped 64.5% over a slightly different time period (all in US dollar terms).

Still, lots of the world's economy is dependent on people and companies in emerging markets so no reason to exclude it.

Still can't make a clear decision regarding ETF or index fund, the all-cap looks good but so does the VWRL!

Frankly at £100 a month or even at £10,000 or £20,000 going into equities, it's more important that you are investing - and investing broadly - than the exact specifics of what you invest in.

bostonerimus

As you are just starting I assume you are relatively young. If so you should go for growth and avoid high dividends and include some emerging markets as you can afford to take the risk. That rules out VHYL and VEVE. You want some UK, as you are presumably in the UK, so that leaves VWRL and Global All Cap...either would be just fine IMHO.

jamels2

That's great so it's between the vwrl etc and the global all cap index fund... I'm sure both would be fine but is there anything else that can narrow it down to the one?
I am not planning on bonds right now as I will just keep a cash emergency fund. But if I was to add bonds I'm guessing that's something like VGOV?

Linton

jamels2 wrote: »

That's great so it's between the vwrl etc and the global all cap index fund... I'm sure both would be fine but is there anything else that can narrow it down to the one?
I am not planning on bonds right now as I will just keep a cash emergency fund. But if I was to add bonds I'm guessing that's something like VGOV?

I would advocate Global AllCap since it is more broadly invested than VWRL.

Bonds involve different considerations. There is no point in holding a broad assortment of developed world government bonds since they are highly correlated and provide long term guaranteed returns, characteristics which are.very different to equities. It makes more sense to identify why you want to hold such bonds and focus on the ones that most closely match your objectives and investment timescales.

Alexland

On Vanguard Investor I would prefer All Cap over VWRL as an OEIC fund has FSCS protection up to £85k which is a nicer than not having protection. Not that it matters so much with a reputable fund manager.

VGOV etf or Global Bond Index Hedged fund are both fine depending on your fixed income strategy.

Alex

jamels2

Thanks didn't know about the protection. Are there any other differences between etc and funds with considering?

Bruckner

Alexland wrote: »

On Vanguard Investor I would prefer All Cap over VWRL as an OEIC fund has FSCS protection up to £85k which is a nicer than not having protection. Not that it matters so much with a reputable fund manager.

VGOV etf or Global Bond Index Hedged fund are both fine depending on your fixed income strategy.

Alex

Joined when I saw this thread as this is good information to know.

Does the cover apply to all OEIC funds or does it matter if they are UK, Ireland or elsewhere?

ColdIron

jamels2 wrote: »

Thanks didn't know about the protection. Are there any other differences between etc and funds with considering?

While ETFs and Funds/OEICs invest in much the same things there are many differences in their structure, here are some to get you started:

ETFs are traded as shares on a stock exchange. Funds/OEICs are not traded and are denoted in units

When you buy shares in an ETF you are buying them from a seller and vice versa. When you buy units in a fund/OEIC you give your money to a fund manager who buys more of his underlying shares and creates units which he allocates to you and vice versa on sale

You can't buy a bit of a share, you can buy units to several decimal places

ETFs are live priced so will vary throughout the day. Funds/OEICs are priced once a day

ETFs will have a 'spread', the buy and sell prices will differ. Funds/OEICs do not usually have a spread

ETFs will usually have a trading cost to buy and sell, many funds/OEICs will not although this does depend on your platform (Vanguard Investor do allow free ETF purchases if you are happy to use their bulk purchase scheme)

Most funds/OEICs will come in two classes, accumulating and distributing (Acc/Inc). Most ETFs do not

ETFs require a higher level of understanding, most people use funds. I would suggest you have a very clear idea of the nature of what you are investing in before parting with your money. I would also strongly suggest you decide what to invest in before choosing your platform as the charging structures can differ significantly

At £100 per month most would stick to funds