Global ETF

chiang_mai

The "Vanguard FTSE Glb All Cp Idx £ Acc", has higher charges at 0.23% but includes small caps, choices choices choices!

Albermarle

Voyager2002 said:

Check allocations to the UK: I understand that Vanguard is over-weight and HSBC GIF provides a satisfactory alternative.

This etf is not overweight in UK . It is slightly underweight in the US because there is a  % invested in emerging markets (10?)

Alexland

chiang_mai said:

The "Vanguard FTSE Glb All Cp Idx £ Acc", has higher charges at 0.23% but includes small caps, choices choices choices!

If you were with Vanguard Investor and going to go with the Vanguard All World ETF at 0.22% then I would suggest going for the Global All Cap for an extra 0.01% as we both prefer the OEIC structure over ETFs and funds also get the FSCS protection.

However when compared to the HSBC FSTE All World at 0.13% you have to ask yourself if the greater small and mid cap exposure is worth paying an extra 0.10% on the whole fund value. Whenever I compare the trailing return data it doesn't suggest that it is worth paying more but then smaller companies might do better than large caps in the future. Still they would need to do better enough by more than the extra cost hurdle.

Albermarle

but then smaller companies might do better than large caps in the future. 

I think one issue with these global small cap funds is that inevitably  many of the companies in the fund are not really small cap in the normal meaning of the word, and are actually quite large.

csgohan4

Albermarle said:

but then smaller companies might do better than large caps in the future. 

I think one issue with these global small cap funds is that inevitably  many of the companies in the fund are not really small cap in the normal meaning of the word, and are actually quite large.

You could always get a separate small caps fund/IT, that's what I did to put more weight in that section of my portfolio. But TSLA is in the BG discovery fund which is odd. TSLA is not a small caps company

chiang_mai

Albermarle said:

but then smaller companies might do better than large caps in the future. 

I think one issue with these global small cap funds is that inevitably  many of the companies in the fund are not really small cap in the normal meaning of the word, and are actually quite large.

The definition of small medium and large caps varies across funds and continents, just as the definition of developed and emerging Asia does.

chiang_mai

Alexland said:

chiang_mai said:

The "Vanguard FTSE Glb All Cp Idx £ Acc", has higher charges at 0.23% but includes small caps, choices choices choices!

If you were with Vanguard Investor and going to go with the Vanguard All World ETF at 0.22% then I would suggest going for the Global All Cap for an extra 0.01% as we both prefer the OEIC structure over ETFs and funds also get the FSCS protection.

However when compared to the HSBC FSTE All World at 0.13% you have to ask yourself if the greater small and mid cap exposure is worth paying an extra 0.10% on the whole fund value. Whenever I compare the trailing return data it doesn't suggest that it is worth paying more but then smaller companies might do better than large caps in the future. Still they would need to do better enough by more than the extra cost hurdle.

Thanks again for your input, your comments have been most helpful.....I shall ponder these things and weigh up the arguments.

Alexland

chiang_mai said:

I shall ponder these things and weigh up the arguments.

Don't ponder the 0.10% difference for too long as even missing out on a couple of percent market return by delaying could be worth 20 years of the fee difference. In truth they are all good enough. As you say you are saving the ongoing cost of the advisor and provided you can tolerate the occasional 50% drops when the market crashes badly then over a long enough run you should do fine with a global tracker.

NedS

chiang_mai said:

No none at all. A fund is actually better in many respects and is cheaper to buy.....I'm on the HL platform. Many thanks for the idea which is indeed better.

Take a look at L&G International Index Trust (C) Accumulation fund. HL offer it at a 0.08% fee, plus their ongoing 0.45% platform fee. It tracks the FTSE World index, ex UK. It has out-performed other global tracker ETFs such as HWMO and VWRL. I'm pretty sure it's the cheapest global tracker you can buy on HL and you will save yourself trading fees versus an ETF. The fact it's also ex-UK I view as a positive as it means you haven't got ~4-5% of FTSE100 companies in there acting as a drag on performance, as the FTSE100 isn't exactly renowned for it's growth. If you are concerned about it being ex-UK, just add a FTSE100 or all-share tracker at 4-5% alongside, but personally being ex-UK is an advantage to me.

Alexland

NedS said:

The fact it's also ex-UK I view as a positive as it means you haven't got ~4-5% of FTSE100 companies in there acting as a drag on performance, as the FTSE100 isn't exactly renowned for it's growth.

I would have agreed with you in recent years (and used to hold L&G International myself) but since the rotation from growth to value last summer the UK market has been quietly performing better with 6 month trailing returns around 50% higher than a global tracker. I decided to overweight the UK as offering more opportunity towards the end of last year. Also worth noting L&G International is missing emerging markets which results in a very high weighting to the expensive US companies.