Tracker funds & ETF long term suggestions

Malone2020

Hi all,  so basically I am invested in a handful of carefully chosen individual stocks that match my longterm value investor outlook but I've always planned, even prior to the pandemic, to diversifyya little more by using tracker funds and ETFs. I guess, on that front I'm looking for any suggestions about what the best options might be. 
To clarify, I'm not looking at punting any huge amount to begin with. More something along the lines of £1k or so, before then drip feeding a similar amount in over the year with the automatic reinvestment of any dividends or earnings. At the risk of sounding lazy, Id prefer to be as hands off as possible, essentially making the investment and the parking it for the foreseeable and then checking in on it every few months. The investment will be long term and I've no immediate need for the money (when I say long term I'm talking closer to the 20 year mark than the 10 year mark). 
I'm currently minded to invest in a tracker fund and an ETF to begin with, and then to add to these over the years. I'll also be continuing to but individual stocks if/when they reach the Buffet sweet spot of being 'a great company at a fair price'. 

In summation, I suppose I'm looking for suggestions on the best tracker funds and ETFs to consider for a steady, though not necessarily spectacular, return in the long term. If it helps, I'll probably hold off on pulling the trigger until January when the Covid and Brexit impacts might, and that's a HUGE might, be a little clearer in terms of economic impact. 

Alexland

https://monevator.com/low-cost-index-trackers/

For a fund my favourite is HSBC's FTSE All World (so includes Emerging Markets) Acc at 0.13% although if you don't want EM then Fidelity World is only 0.12%.

For an ETF it's difficult as a World (Developed) tracker such as Lyxor's accumulating LWCL is only 0.12% but for the extra EM exposure then Vanguard's accumulating VWRP is almost twice the price at 0.22%.

If your platform charges are the same either way (eg iWeb) then I would go with a fund for the better EM option and to get the FSCS protection. If you weren't holding individual shares it might make sense on a small account to go with Vanguard Investor to get access to their low 0.15% platform fee with no trade costs (unless you want live ETF trading) even if it means paying more for the Vanguard All Cap Acc fund at 0.23% or VWRL All World Inc ETF at 0.22% (income version of VWRP not available on VI) and set the platform to automatically reinvest income. It's the total cost of platform+trades+fund that matters so it sometimes makes sense to go with a more expensive fund/etf. Not all funds/etfs are available on all platforms.

MaxiRobriguez

Agree with Alex. If you are carefully invested in only a handful of individual stocks then the easiest move is to move to get the real diversification you're after is into a cheap global tracker fund and be done with it, rather than try and carefully selected specific trackers based on cap size or geographical location. 

1813

Im trying to find a suggestion too and its really hard. When I turn 60, I want to try and find out what the best type of product would be to invest in for reasonable long term growth (8-10 years). I cannot see myself retiring before 68 but the problem is there are too many options, which may seem good, but makes it more difficult to know which approach is best. 
I have studied funds from past performance and their performance is reasonable yet when I look at things such as FTSE 250, that too is quite a staggering option, but the thing is, we cannot predict the future, so like yourself, I am trying to find the best option for long term growth as its crucial to my retirement prospects. There is potential for lump sums / regular deposits but where to get the best out of it, unless you are an experienced investor, remains a tough call. 
Think when I get nearer to being able to touch my retirement fund, go from there, but there is always taking your pension early etc so its tough to know what is the best course of action.

Alexland

1813 said:

Im trying to find a suggestion too and its really hard. When I turn 60, I want to try and find out what the best type of product would be to invest in for reasonable long term growth (8-10 years). I cannot see myself retiring before 68 but the problem is there are too many options, which may seem good, but makes it more difficult to know which approach is best.

8-10 years is more medium term than the OP's long term 20 year timescales. Although if going into drawdown for the rest of your life then it's more of a long term investment with consideration of the need to begin drawing regular income. You are likely to need a carefully developed asset allocation strategy which includes less volatile assets such as fixed income (bonds) and cash although a tracker might form part of that asset allocation. Personally I wouldn't bother with country and size specific tracker funds such as the FTSE250.

Sebo027

Consider something like below for equities:
iShares Core MSCI World UCITS ETF (SWDA)
FTSE All-World UCITS ETF (VWRP)
iShares Core MSCI EM IMI UCITS ETF - (EMIM), used with SWDA to increase emerging market exposure.
Consider something like below for bonds:
iShares Global Inflation Linked Govt Bond UCITS ETF - Inflation linked bonds, globally diversified 
Global Bond Index Fund - Hedged Accumulation - Tracks the Bloomberg Barclays Global Aggregate Float Adjusted and Scaled Index
iShares UK Gilts 0-5yr UCITS ETF - Short dated UK Government Bonds investment grade bonds

Alternatively use something like Vanguard's VLS60. 

Another_Saver

1813 said:

Im trying to find a suggestion too and its really hard. When I turn 60, I want to try and find out what the best type of product would be to invest in for reasonable long term growth (8-10 years). I cannot see myself retiring before 68 but the problem is there are too many options, which may seem good, but makes it more difficult to know which approach is best. 
I have studied funds from past performance and their performance is reasonable yet when I look at things such as FTSE 250, that too is quite a staggering option, but the thing is, we cannot predict the future, so like yourself, I am trying to find the best option for long term growth as its crucial to my retirement prospects. There is potential for lump sums / regular deposits but where to get the best out of it, unless you are an experienced investor, remains a tough call. 
Think when I get nearer to being able to touch my retirement fund, go from there, but there is always taking your pension early etc so its tough to know what is the best course of action.

I agree with everything everyone else has said, personally I like Vanguard and a simple balanced fund like VLS 60 would be fine on its down, maybe 80 if you're thinking about 8-10 years, maybe 100 if you're looking beyond 10 years, or the global all cap for complete global exposure.
But, if you're really, really interested, which no-one else seems to be, there's a whole debate about the 250, index in these two threads:
https://forums.moneysavingexpert.com/discussion/6206301/vvfusi-or-vmid
https://forums.moneysavingexpert.com/discussion/6207238/ftse-tracker
The main reason the 250 has done so well is because of acquisitions of companies in the index. I think that can last a while longer, maybe a few decades, others disagree or don't understand.

John464

Sebo027 said:

iShares UK Gilts 0-5yr UCITS ETF - Short dated UK Government Bonds investment grade bonds

Short dated UK Government Bonds have a negative yield even before charges
https://www.bloomberg.com/markets/rates-bonds/government-bonds/uk
If you are fund manager you don't have much choice
But if you are a retail investor wouldn't you be better off with a savings account?

Sailtheworld

John464 said:

Sebo027 said:

iShares UK Gilts 0-5yr UCITS ETF - Short dated UK Government Bonds investment grade bonds

Short dated UK Government Bonds have a negative yield even before charges
https://www.bloomberg.com/markets/rates-bonds/government-bonds/uk
If you are fund manager you don't have much choice
But if you are a retail investor wouldn't you be better off with a savings account?

Depends. Seems a waste of ISA allowance to hold cash and there's a chance of a capital gain if holding gilts (probably slim but it's zero with cash). If saving hard in a SIPP it's not that difficult to be pushing FSCS limits (and rates for cash in SIPPs are zero) although providers don't charge for holding cash.

There's also the possibility that if the strength of the government promise, in a time of crisis, was tested they might treat cash savers & NS&I savers differently to gilt holders. My view is they'd try to solve a debt crisis by borrowing more money and treating UK citizens less preferentially.

In reality there's probably not much in it at the moment.