VWRL vs VLS80

Alexland

Dird said:

Neither. Both have crap prospects despite Farage & Boris both obsessing about the value of our fish

What evidence do you have that UK listed companies (many of who operate overseas) have any worse than average prospects over the longer term that would cause you to exclude them from a diversified portfolio?

Thrugelmir

Dird said:

Alexland said:

Dird said:

Russia only has a P/E of 8 too

Yup there are reasons for that too. Which would you rather invest in?

Neither. Both have crap prospects despite Farage & Boris both obsessing about the value of our fish

Sounds as if you spend too much time on Facebook. 

csgohan4

personal preference regarding Uk exposure. It's what suits your own strategy. Personally I prefer a more global approach, specifically sector approach.  You will find most index trackers are >50% vested in USA, so you could mitigate it with satellites in other countries/ sectors e.t.c

JohnWinder

Cam93 said:

...from the VLS80 to VWRL as a global tracker as I don't like how UK weighed the VLS is.

Both this Vanguard paper 'Global equity investing: The benefits of diversification and sizing your allocation. 2019', and this 50 year perspective suggests the VLS80 equity mix has some justification.

https://www.bogleheads.org/blog/2020/03/02/50-years-of-investing-in-the-world-part-3/

Prism

JohnWinder said:

Cam93 said:

...from the VLS80 to VWRL as a global tracker as I don't like how UK weighed the VLS is.

Both this Vanguard paper 'Global equity investing: The benefits of diversification and sizing your allocation. 2019', and this 50 year perspective suggests the VLS80 equity mix has some justification.

https://www.bogleheads.org/blog/2020/03/02/50-years-of-investing-in-the-world-part-3/

Thing is that the Bogleheads perspective is for a US investor which is why for example they prefer a US weighting in both equities and bonds - because the historical results have been so good. I am not sure that works in the same way for UK investors.

Another_Saver

Prism said:

JohnWinder said:

Cam93 said:

...from the VLS80 to VWRL as a global tracker as I don't like how UK weighed the VLS is.

Both this Vanguard paper 'Global equity investing: The benefits of diversification and sizing your allocation. 2019', and this 50 year perspective suggests the VLS80 equity mix has some justification.

https://www.bogleheads.org/blog/2020/03/02/50-years-of-investing-in-the-world-part-3/

Thing is that the Bogleheads perspective is for a US investor which is why for example they prefer a US weighting in both equities and bonds - because the historical results have been so good. I am not sure that works in the same way for UK investors.

They've been the same in nominal local currency terms over that kind of timeframe,  but we've had a bit more inflation so our real returns are a bit lower.

Thrugelmir

Prism said:

JohnWinder said:

Cam93 said:

...from the VLS80 to VWRL as a global tracker as I don't like how UK weighed the VLS is.

Both this Vanguard paper 'Global equity investing: The benefits of diversification and sizing your allocation. 2019', and this 50 year perspective suggests the VLS80 equity mix has some justification.

https://www.bogleheads.org/blog/2020/03/02/50-years-of-investing-in-the-world-part-3/

Thing is that the Bogleheads perspective is for a US investor which is why for example they prefer a US weighting in both equities and bonds - because the historical results have been so good. I am not sure that works in the same way for UK investors.

Why expose yourself to unneccessary currency risk as a US investor? Hedging protection reduces returns. 

Prism

Thrugelmir said:

Prism said:

JohnWinder said:

Cam93 said:

...from the VLS80 to VWRL as a global tracker as I don't like how UK weighed the VLS is.

Both this Vanguard paper 'Global equity investing: The benefits of diversification and sizing your allocation. 2019', and this 50 year perspective suggests the VLS80 equity mix has some justification.

https://www.bogleheads.org/blog/2020/03/02/50-years-of-investing-in-the-world-part-3/

Thing is that the Bogleheads perspective is for a US investor which is why for example they prefer a US weighting in both equities and bonds - because the historical results have been so good. I am not sure that works in the same way for UK investors.

Why expose yourself to unneccessary currency risk as a US investor? Hedging protection reduces returns. 

I agree for a US investor. Their bond returns have been stable and equity returns good - enough that they might need a bit of encouragement to go global. Our UK position hasn't been too bad either but more recently gilts have been difficult to argue for and to some degree UK equity. At least with equity you can go down the company scale. Gilts I don't think there is an answer to except for going global.

Another_Saver

I don't bother with gilts at all, less than cash so not worth holding in an ISA and I'm far away enough from retirement to not bother with them in my SIPP. But in mum and dad's SIPPs I needed something to balance the equity, ended up with some index linked and corporate bond index funds. I was using us treasuries and I'll be buying back in as soon as the yield net of fees is back above cash. To think at the start of the year you could get 1.5% or so over ~8 years hedged via a vanguard fund.

Thrugelmir

Prism said:

Thrugelmir said:

Prism said:

JohnWinder said:

Cam93 said:

...from the VLS80 to VWRL as a global tracker as I don't like how UK weighed the VLS is.

Both this Vanguard paper 'Global equity investing: The benefits of diversification and sizing your allocation. 2019', and this 50 year perspective suggests the VLS80 equity mix has some justification.

https://www.bogleheads.org/blog/2020/03/02/50-years-of-investing-in-the-world-part-3/

Thing is that the Bogleheads perspective is for a US investor which is why for example they prefer a US weighting in both equities and bonds - because the historical results have been so good. I am not sure that works in the same way for UK investors.

Why expose yourself to unneccessary currency risk as a US investor? Hedging protection reduces returns. 

I agree for a US investor. Their bond returns have been stable and equity returns good - enough that they might need a bit of encouragement to go global. Our UK position hasn't been too bad either but more recently gilts have been difficult to argue for and to some degree UK equity. At least with equity you can go down the company scale. Gilts I don't think there is an answer to except for going global.

If you would like some holiday reading. Here's a couple of suggestions. Two papers, the second is an update on the first.

Do stocks outperform Treasury bills? (Published 2017)

Wealth Creation in the U.S. Public Stock Markets 1926 to 2019             

Both by Hendrik Bessembinder