Is FTSE 100 (This Yr coming Yr) better investment than VLS100 & S&P500 Your Opinion Please !!

adindas

FTSE 250 (VMIG.L Vanguard FTSE 250 UCITS ETF)

It seems, in the near future it might outperfom other major famous funds in the UK such as

-VUSA.L (Vanguard Funds Public Limited Company - Vanguard S&P 500 UCITS ETF)
-VUKE.L (Vanguard FTSE 100 ETF)

-0P0000TKZO.L (Vanguard LifeStrategy 100% Equity Fund A Acc)

Also the news FTSE 250 hits new all-time high

https://londonlovesbusiness.com/ftse-250-hits-new-all-time-high/

TWO YEARS COMPARISON

FIVE YEARS COMPARISON

eskbanker

adindas said:

FTSE 250 (VMIG.L Vanguard FTSE 250 UCITS ETF)

performance in comparison to, it seems it will outperfom other funds such as

-VUSA.L (Vanguard Funds Public Limited Company - Vanguard S&P 500 UCITS ETF)
-VUKE.L (Vanguard FTSE 100 ETF)

-0P0000TKZO.L (Vanguard LifeStrategy 100% Equity Fund A Acc)

Surely it seems that it has outperformed other funds, or are you accessing some forward-looking data from elsewhere?

adindas

eskbanker said:

adindas said:

FTSE 250 (VMIG.L Vanguard FTSE 250 UCITS ETF)

performance in comparison to, it seems it will outperfom other funds such as

-VUSA.L (Vanguard Funds Public Limited Company - Vanguard S&P 500 UCITS ETF)
-VUKE.L (Vanguard FTSE 100 ETF)

-0P0000TKZO.L (Vanguard LifeStrategy 100% Equity Fund A Acc)

Surely it seems that it has outperformed other funds, or are you accessing some forward-looking data from elsewhere?

From yahoo finance. Not forward looking but to this date. I just performed comparison a few minues ago. But that comparison include S&P 500.

eskbanker

adindas said:

eskbanker said:

adindas said:

FTSE 250 (VMIG.L Vanguard FTSE 250 UCITS ETF)

performance in comparison to, it seems it will outperfom other funds such as

-VUSA.L (Vanguard Funds Public Limited Company - Vanguard S&P 500 UCITS ETF)
-VUKE.L (Vanguard FTSE 100 ETF)

-0P0000TKZO.L (Vanguard LifeStrategy 100% Equity Fund A Acc)

Surely it seems that it has outperformed other funds, or are you accessing some forward-looking data from elsewhere?

From yahoo finance. Not forward looking but to this date. I just performed comparison a few minues ago.

So what made you conclude that one fund will (future tense) outperform others?  Just past performance (from those charts), or something more fundamental (from elsewhere)?

grumiofoundation

adindas said:

eskbanker said:

adindas said:

FTSE 250 (VMIG.L Vanguard FTSE 250 UCITS ETF)

performance in comparison to, it seems it will outperfom other funds such as

-VUSA.L (Vanguard Funds Public Limited Company - Vanguard S&P 500 UCITS ETF)
-VUKE.L (Vanguard FTSE 100 ETF)

-0P0000TKZO.L (Vanguard LifeStrategy 100% Equity Fund A Acc)

Surely it seems that it has outperformed other funds, or are you accessing some forward-looking data from elsewhere?

From yahoo finance. Not forward looking but to this date. I just performed comparison a few minues ago.

The point is you used the word will in your post.

Will: expressing the future...

And since the FTSE 250 hasn't outperformed S and P 500 over last 2 or 5 years your confusing statement expressing that the FTSE 250 "will outperfom (sic) other major famous funds in the UK such as..." would be incorrect if you sub in has for will. 
 

Edit: did you include dividends in your analysis?

tebbins

Some things you be aware of before you assume the FTSE 250s good run will continue. The FTSE 250 is a whole other debate in itself which has been covered in previous threads. However, don't fall for the usual, rarely substantiates explanation of its outperformance of the 100 and a global equity index fund over the last 20 years or so (though not consistently as the last 5 years have shown) as "smaller companies grow faster" or "they are better companies".

A simple trustnet chart will show that this outperformance has only been the case since around the turn of the Millennium, for convenience I base the following calculations from then on. Other long-term but not as readily available indices exist showing that UK smaller-cap has significantly outperformed larger-cap over much longer periods.

The 250 has held its valuation, around a PE of 20, since then, and appreciated upto a PE or 34.4 on 30/6/21, up nearly 2% annualised on its 31/12/1999 level of 22.67. Whereas the 100 started the new Millennium on a PE of 30.45 and as of the end of June had sank to a more average 19.64, knocking -2% off its annualised return over that period.

The 100s total return from 1/1/00-30/6/21 (partly eyeballed) works out around 3.7% annualised, the 250s around 8.9%, a 5% average outperformance.

Another difference which can be explained a few ways is the 250 growing 2.8% faster than its market cap, from inception on 12/10/1992 to 30/6/21 (2400 -> 22376 is 8.1% annualised,  98bn -> 410bn is 5.1% annualised). Part of this is the 250 being a hunting ground for acquisitions by 100 or global companies and private equity, it could also be the effect of churn with the 100. Say a 250 member with a 1% weight rallies 10% on promotion to the the 100, and its replacement sinks 10% on demotion, the index generates a 0.1% profit directly on the sale and buys the replacement at a discount generating another implicit ~0.1% profit, however proving that is beyond me. Put simply, the 250 is constantly mechanically selling high to buy low and profiting without its market cap growing.

The FTSE 100 has had the opposite experience:
"The combined market value of the initial 100 companies in 1984 was just over £100bn and the index was based at 1,000. At the end of January 2021, it stood at 6,407, representing an annual gain of 5.1%. But it was valued at over £1,500bn, reflecting an annual growth rate of 7.6%. This implies that 33% of the growth in value of the index has come from net share issuance" (moneyweek.com/investments/stockmarkets/uk-stockmarkets/602745/uk-stocks-the-ftse-100-is-finding-its-feet-again%3famp). Using the 30/6/21 market cap of 1,894bn, the FTSE 100 has lagged its market cap by -2.6% since inception, a 5.6% gap vs the. 250, though the start of each period (3/1/84, 12/10/92) is nearly 9 years apart so the comparison is not entirely reliable.

Whether these trends continue, or new trends will emerge remains to be seen.