HSBC/Vanguard Funds vs ETF's

NedS

tel_ said:

NedS said:

Cumulative performance

Investment	3 months	6 months	1 year	3 years	5 years
Vanguard FTSE Global All Cap Index Investor Acc GBP	6.1%	15%	39.99%	49.54%	-
HSBC FTSE All World Index C Acc	5.98%	14.02%	38.71%	51.29%	97.41%
HSBC MSCI World	7.08%	13.21%	37.02%	53.14%	99.46%
VngurdFndFTSEAlwrldETF A	6.06%	13.3%	37.61%	-	-

For me, if I've doubled my money in 5 years, I'm really probably not that bothered if it's 97% or 99%, and if you pick the higher 99% fund, you will notice the performance over the past 12 months is the worst. Over the long term, I would expect the performance to average out and to be very much in the same ballpark as they are tracking very similar pots of companies.

I jotted down these four funds a couple of months ago looking back at their past performances, and noticed this too.

Thanks for including a line graph - that really demonstrates how close they really are.

It's becoming more apparent to me that one of the HSBC funds is best to go for though, because their is a difference in the ongoing charges:

Van FTSE Global All Cap  - 0.23 %
HSBC FTSE All World       - 0.13 %
HSBC MSCI World ETF    - 0.15 %
Van FTSE All World ETF   - 0.22 % 
iShares MSCI ACWI ETF  - 0.20 %

And as we know, ongoing charges add up over years/decades.

So HSBC FTSE All World could be the favourable option for some.

If costs are the main priority, and I see no reason why they shouldn't as after all it's the only thing you have any control over, there are other global equity trackers that are even cheaper. My platform offers an L&G global equity ETF (LGGG) for 0.1%, and an L&G OEIC fund for 0.08% (excluding platform fees). There are probably others that are cheaper still, where the very biggest fund managers can pass on economies of scale. Some track indices you may not have heard of, but again plot them against the more popular FTSE/MSCI global indices and you will see the performance is near identical.

Generally though, and as the line chart hopefully illustrates, over a 5-10 year period there isn't a hairs width between any reasonably low cost global tracker. If one has 0.1% lower fees but tracks an index with 1% better performance per year, because it happens to include or exclude EMs or the UK which outperform or drag the wider markets... Pick a low cost global equity tracker from a large reputable fund house that suits your needs, and you won't go far wrong. Just don't spend the next 6 months comparing performance to that other fund you didn't select.

Alexland

Alistair31 said:

I am considering changing SIPP[Fidelity]  and LISA[YouInvest] from VWRP to HSBC All World. What would be best platform for these if switching? At the moment values are £40k and £26k respectively and fees will be capped. @Alexland

As you know the HSBC All World fund is cheaper but won't benefit from capped fees with AJ Bell or Fidelity so my solution at those places has been to hold just World ETFs such as VEVE at 0.12% (setting divis to reinvest at reduced rate) then get the 10% EM exposure elsewhere via my workplace pension.

tel_

NedS said:

If costs are the main priority, and I see no reason why they shouldn't as after all it's the only thing you have any control over, there are other global equity trackers that are even cheaper. My platform offers an L&G global equity ETF (LGGG) for 0.1%, and an L&G OEIC fund for 0.08% (excluding platform fees). There are probably others that are cheaper still, where the very biggest fund managers can pass on economies of scale. Some track indices you may not have heard of, but again plot them against the more popular FTSE/MSCI global indices and you will see the performance is near identical.

Generally though, and as the line chart hopefully illustrates, over a 5-10 year period there isn't a hairs width between any reasonably low cost global tracker. If one has 0.1% lower fees but tracks an index with 1% better performance per year, because it happens to include or exclude EMs or the UK which outperform or drag the wider markets... Pick a low cost global equity tracker from a large reputable fund house that suits your needs, and you won't go far wrong. Just don't spend the next 6 months comparing performance to that other fund you didn't select.

Which L&G OEIC for 0.08% are you alluding to out of curiosity?

I appreciate it may not be listed on my platform.

NedS

tel_ said:

NedS said:

If costs are the main priority, and I see no reason why they shouldn't as after all it's the only thing you have any control over, there are other global equity trackers that are even cheaper. My platform offers an L&G global equity ETF (LGGG) for 0.1%, and an L&G OEIC fund for 0.08% (excluding platform fees). There are probably others that are cheaper still, where the very biggest fund managers can pass on economies of scale. Some track indices you may not have heard of, but again plot them against the more popular FTSE/MSCI global indices and you will see the performance is near identical.

Generally though, and as the line chart hopefully illustrates, over a 5-10 year period there isn't a hairs width between any reasonably low cost global tracker. If one has 0.1% lower fees but tracks an index with 1% better performance per year, because it happens to include or exclude EMs or the UK which outperform or drag the wider markets... Pick a low cost global equity tracker from a large reputable fund house that suits your needs, and you won't go far wrong. Just don't spend the next 6 months comparing performance to that other fund you didn't select.

Which L&G OEIC for 0.08% are you alluding to out of curiosity?

I appreciate it may not be listed on my platform.

L&G International Index Trust (ex UK)

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/legal-and-general-international-index-trust-c-accumulation

Thrugelmir

tel_ said:

NedS said:

Cumulative performance

Investment	3 months	6 months	1 year	3 years	5 years
Vanguard FTSE Global All Cap Index Investor Acc GBP	6.1%	15%	39.99%	49.54%	-
HSBC FTSE All World Index C Acc	5.98%	14.02%	38.71%	51.29%	97.41%
HSBC MSCI World	7.08%	13.21%	37.02%	53.14%	99.46%
VngurdFndFTSEAlwrldETF A	6.06%	13.3%	37.61%	-	-

For me, if I've doubled my money in 5 years, I'm really probably not that bothered if it's 97% or 99%, and if you pick the higher 99% fund, you will notice the performance over the past 12 months is the worst. Over the long term, I would expect the performance to average out and to be very much in the same ballpark as they are tracking very similar pots of companies.

I jotted down these four funds a couple of months ago looking back at their past performances, and noticed this too.

Thanks for including a line graph - that really demonstrates how close they really are.

It's becoming more apparent to me that one of the HSBC funds is best to go for though, because their is a difference in the ongoing charges:

Van FTSE Global All Cap  - 0.23 %
HSBC FTSE All World       - 0.13 %
HSBC MSCI World ETF    - 0.15 %
Van FTSE All World ETF   - 0.22 % 
iShares MSCI ACWI ETF  - 0.20 %

And as we know, ongoing charges add up over years/decades.

So HSBC FTSE All World could be the favourable option for some.

When the majority of global growth in the past 12 months has been provided by just 5 companies. The closeness of the figures is hardly surprising. The majority of the holdings have added little value. 

tel_

NedS said:

L&G International Index Trust (ex UK)

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/legal-and-general-international-index-trust-c-accumulation

Ah, I did come across this one, but noticed it was excluding UK. Okay if you already have or intend to have a UK satellite fund with it. That could be my aim.

Unfortunately, iWeb does not list this particular fund, but I know people have requested funds not listed on iWeb, and they have been made available.

Alexland

tel_ said:
Unfortunately, iWeb does not list this particular fund, but I know people have requested funds not listed on iWeb, and they have been made available.

It's a HL exclusive discounted fund class so with the 0.45% platform fee on funds there are better choices.

tel_

Alexland said:

It's a HL exclusive discounted fund class so with the 0.45% platform fee on funds there are better choices.

Thanks for the clarification on that one Alexland.

Care to throw any other choices in the ring that you feel are worth researching?

valiant24

Alexland said:

As you know the HSBC All World fund is cheaper but won't benefit from capped fees with AJ Bell or Fidelity ....

Why is that?

Alexland

valiant24 said:

Why is that?

Because those platforms only cap fees on exchange traded assets such as ETFs, ITs and company shares not traditional funds. They tend to have higher trading fees on exchange traded assets.