New Investor - please help!!

KN1357

Sebo027 said:

@KN1357 - Check out VWRL or consider a combination of SWDA + EIMI. 
The later two provide exposure to developed (SWDA) and emerging (EIMI) markets. You get both with VWRL. 
If you want diversification, they are globally diversified low cost ETFs with approximately 58% holdings in the US.

Appreciate the recommendations, thank you. Any reason why VWRL over all cap out of interest? 

Sebo027

KN1357 said:

Sebo027 said:

@KN1357 - Check out VWRL or consider a combination of SWDA + EIMI. 
The later two provide exposure to developed (SWDA) and emerging (EIMI) markets. You get both with VWRL. 
If you want diversification, they are globally diversified low cost ETFs with approximately 58% holdings in the US.

Appreciate the recommendations, thank you. Any reason why VWRL over all cap out of interest? 

I don't understand the question.

KN1357

Sebo027 said:

KN1357 said:

Sebo027 said:

@KN1357 - Check out VWRL or consider a combination of SWDA + EIMI. 
The later two provide exposure to developed (SWDA) and emerging (EIMI) markets. You get both with VWRL. 
If you want diversification, they are globally diversified low cost ETFs with approximately 58% holdings in the US.

Appreciate the recommendations, thank you. Any reason why VWRL over all cap out of interest? 

I don't understand the question.

Hi, my question was if there any particular preference of VWRL over the Global All-cap Index fund?

Sailtheworld

VWRL tracks the FTSE All World Index. Charges are cheap but can be beaten by HSBC which tracks the same index.

bowlhead99

Sailtheworld said:

VWRL tracks the FTSE All World Index. Charges are cheap but can be beaten by HSBC which tracks the same index.

Though the HSBC product that does that is an open-ended fund / OEIC while VWRL is an ETF. The choice of the two different fund structures might attract different costs, depending what platform you are using.

If you're using Vanguard's own platform, the costs for holding and buying ETFs on the stock exchange are the same as for holding and buying OEICs, and the low annual percentage-based platform fee is quite attractive for small amounts drip fed monthly or whenever you have the money available - rather than paying a fee every time you want to transact.  However, most other platforms have incremental charges for each purchase of ETFs, while only some have incremental charges for OEICs, offering the percentage-based model instead. If looking for a percentage-based model, it may be cheaper (in terms of platform costs plus product cost) to use Vanguard's own platform in combination with their VWRL or FTSE Global All-Cap, than to use a different platform on which you could hold the HSBC fund. 

Vanguard's platform doesn't however offer a LISA, so if you need to go somewhere else for that, you would be looking at the whole of the market in terms of what funds you could hold in it which might make HSBC's product relatively more attractive than Vanguard's global trackers, if it shaves a few bps off the cost. The returns will not be identical though, for example the Global All-Cap is a little more expensive but offers exposure to slightly broader markets, so its performance could feasibly differ by as much as the cost saving from using the All World at HSBC.  At the end of the day though, the extra exposure in the Global All Cap is only to markets which are very strongly correlated to what's in the core of the All World, and with the relatively small sums you're investing, probably not getting too excited about either way. Just look for maximum simplicity.

Sailtheworld

HSBC do have an All-World ETF - still cheaper than VWRL. Tracks the MSCI world index rather than FTSE world index - I wouldn't worry about the difference.

As the post above once you get to these ultra low costs the platform become all important when it comes to overall cost.

bowlhead99

Sailtheworld said:

HSBC do have an All-World ETF - still cheaper than VWRL. Tracks the MSCI world index rather than FTSE world index - I wouldn't worry about the difference.

As the post above once you get to these ultra low costs the platform become all important when it comes to overall cost.

Not to get hung up too much on the differences as you say, but HSBC don't have an All-World ETF, they have a World ETF, which is a cheaper but less diversified product.

There isn't much of a difference between FTSE's All-World and MSCI's ACWI (All companies world index) as they are just two slightly different ways of building a market-cap weighted index across all major markets from two rival constructors of financial indexes, with the differences probably not worth worrying about in the grand scheme of things., as they can be subtle to explain. Either would do the job.  When trying to get one's head around the different similar-sounding products though, it's worth knowing that the All-World and ACWI  (and Global All-Cap) products are trying to capture all of the major world markets (including emerging markets); while the 'World' versions (i.e. just World (as distinct from All World, or ACWI, or Global AllCap)) will be missing some emerging markets.

As emerging markets can perform differently to developed markets at different times, they are useful to have in your portfolio for diversification, and there's no great incentive to exclude them - the difference in performance can be more than a 0.1% of annual fees here and there.

AnotherJoe

KN1357 said:

dunstonh said:

Thanks for your reply. So yes, I picked VLS100 after some recomendations and reading, and desire to start somewhere.

Who is making these recommendations?   You can understand VLS20, 40,60,80 but VLS100 is up against global trackers.  it doesn't look strong at all compared to the alternatives.  So, what recommendation were you given for VLS100 and why?

My goal is to have 2-3 index funds and just leave it alone and readjust infrequently.

Unless you use a global tracker, you are not going to be able to build a diverse structured portfolio with just 3 index trackers. And if you are going to be 100% equity based then you really only need a global tracker.   If you are going to use a multi-asset fund (if you dont have the risk profile for 100% equity) then you really only need one.      Unless you have decided to become a fund manager and make management decisions.

Thanks for your advice. I very much want to keep things as simple but as diversified as possible. I'm tempted to go 50% VLS100 and 50% All-Cap (or alternative) and see how they both perform over the next 18 months and then decide from there which one to commit to. 

And I have no plans for becoming a fund manager (I'm a doctor by trade!)

It makes no sense to see which performs best over the next 18 months and then choose.
because:
1. Past performance is no guide, etc.
2. The next 18 months is a random period. So why not pick the last 18 months, or 36 months instead? Then you can see immediately. 

3. The U.K. bias isn't the issue (IMO) , the issue is the concentration ina few industries that's a result of that bias, that is the issue. They might nominally be "Uk" companies but in reality they are global That happen to havea HQ here, but there's a preponderance of finance and oil and pharma and no tech. 

4. If your aim is to be diversified across the world, Then some better candidates than VLS have been mentioned, accept you could have chosen better and switch now.