Adding new funds

Yanling

Hi i have invested vls 80 and vls 100 with vanguard for ISA, i am going to invest a few funds as well, these funds are: ESG Developed World All Cap Equity Index Fund (UK), Global Small-Cap Index Fund, FTSE All-World UCITS ETF, FTSE North America UCITS ETF, FTSE Emerging Markets UCITS ETF. any ideas and opinion? thank you all

pip895

A lot of overlap there.  Why both VLS80 and 100 - they are very similar.  Other global funds will overlap to.  I can see some point in adding EM and Small companies but personally I think Small Companies in particular is better done through active funds.

eskbanker

What are you actually trying to achieve with all those overlaps?  It looks like you're bored with holding multiple equity-heavy variants of the same global multi-asset fund and have decided to try to construct your own as well....

AnotherJoe

Yanling said:

Hi i have invested vls 80 and vls 100 with vanguard for ISA, i am going to invest a few funds as well, these funds are: ESG Developed World All Cap Equity Index Fund (UK), Global Small-Cap Index Fund, FTSE All-World UCITS ETF, FTSE North America UCITS ETF, FTSE Emerging Markets UCITS ETF. any ideas and opinion? thank you all

A venn diagram of your current and proposed purchases  would achieve sentience to ask why you had so many pointlessly and massively overlapping investments. 
What is your thinking here ? It's like going into Tesco, picking up a Mars bar  and a Milky Way, and then thinking, well perhaps I shouldn't have too much chocolate so I'm going to get a Crunchie, ,  oh and those Kit Kat's look interesting,  but all chocolate could be a bit filling so let's get some maltesers. 

There's only one that really doesn't have much overlap, the small cap, and most people, me included, woudl point out that for small cap, active funds tend to do better than indexes.
Pick ONE global fund (I suggest the one with the lowest charges or an ESG because there's a rationale behind either choice ) and a small cap (but an active one, not your choice)  and an emerging markets as well if that floats your boat. 

If you  use the  charting function in HL to compare the investments you chose youd see how most track each other - because they are pretty much the same underlying investments and because it's a global economy. 

grumiofoundation

Does seem like a lot of overlap.

If you agree/support the ESG criteria of the ESG fund why would you not be 'all-in' on this? (Vanguard offers analogous Emerging markets version of this which you can combine - I am assuming you are 'limited' to vanguard funds).
Having a small% as 'ESG' but the rest 'non-ESG' seems odd?
https://www.vanguardinvestor.co.uk/investments/vanguard-esg-emerging-markets-all-cap-equity-index-fund-gbp-acc/overview

Albermarle

There's only one that really doesn't have much overlap, the small cap, and most people, me included, woudl point out that for small cap, active funds tend to do better than indexes.

Just a secondary question for my benefit but might help the OP as well.

Is it really practical to have a global small cap fund ? Surely the choice for the fund manager would be too large to sensibly manage ? Do not more regional/national small cap funds make more sense as they can focus more ?

AnotherJoe

A global small cap simply gives the manager carte blanche to pick small companies from around the globe rather than being stuck to one arbitrary geographic area. Maybe its more work than picking from one country or geography but TBH I doubt it, unless they are jetting around meeting managers and touring factories, all of which is overrated IMO (and Peter Lynch thinks the same) then the costs ought to be the same.

Say they have 30 companies in teh fund, does it make much difference if they are all say UK, or Europe or USA, or all of those?

Yanling

Good morning, thanks so much for all the help!
I am going to pick VLS100,  Global Small-Cap Index Fund and  FTSE Emerging Markets UCITS ETF.
my ISA is with Vanguard, I can not see small cap has active fund. 
Any other opinions? It is very much appreciated !

grumiofoundation

VLS100 already has ~9% Emerging markets. So adding EM ETF will overlap with that (obviously if aim is to 'overweight' EM thats fine).

Sea_Shell

Actually, with the mention of Venn diagrams...that would be a really helpful tool if one existed.

Punch in what funds you have, or are considering, and it shows you visually where your overlaps are.

Does one exist?

Linton

Sea_Shell said:

Actually, with the mention of Venn diagrams...that would be a really helpful tool if one existed.

Punch in what funds you have, or are considering, and it shows you visually where your overlaps are.

Does one exist?

Morningstar Xray is the only tool I know of that identifies overlaps. The Xray tool also covers a lot of other factors such as company size and sector allocations. There is a free version which is pretty clunky (I havent been able to get the overlap option to work) and a much better one that you pay for.  The cheapest option is to pay for £19 for 1 month's usage.  However I think this is wildly OTT for the OPs needs. Unless you are an asset allocation geek just buying 1 month occasionally may be worthwhile for large portfolios.

Some platforms provide access to morningstar Xray for your actual fund holdings.