SIPP investment choices - VWRL, VRWP or something else?

jamesd

If you want to take a view on the Pound you might consider the Vanguard FTSE Developed World Hedged fund, not sure about ETF version. Hedges Pound currency risk and that's beneficial if the Pound increases in value. Since it's towards the lower end of the common range that may be a good move. Or not, your call. It's my own largest single holding and has been since brexit time when the value was particularly low.

k6chris

jamesd said:

If you want to take a view on the Pound you might consider the Vanguard FTSE Developed World Hedged fund, not sure about ETF version. Hedges Pound currency risk and that's beneficial if the Pound increases in value. Since it's towards the lower end of the common range that may be a good move. Or not, your call. It's my own largest single holding and has been since brexit time when the value was particularly low.

How is the fund hedged??

ex-pat_scot

jamesd said:

If you want to take a view on the Pound you might consider the Vanguard FTSE Developed World Hedged fund, not sure about ETF version. Hedges Pound currency risk and that's beneficial if the Pound increases in value. Since it's towards the lower end of the common range that may be a good move. Or not, your call. It's my own largest single holding and has been since brexit time when the value was particularly low.

I don't fundamentally want to take a view on the £, as frankly I have no idea what the global FX / trade / political landscape will be for the next 40 years.
I'm happy that holding the global ETF/ trackers gives me the broadest exposure.

Alexland

jamesd said:

If you want to take a view on the Pound...

I've been watching the pound decline against the dollar thinking it might soon be time to hedge at least some of our accounts to protect against a reversion back to a long term reasonable position of around 1.40. However at the current 1.32 that's only around 6% off which I am relaxed about as there may be further benefits. If the pound dropped to around 1.26 which seems possible if the government continues to decay then I would be tempted to start hedging. Last year during the UK's poorly received initial covid response when it dropped to around 1.15 we temporarily switched a couple of accounts to IWDG and although we didn't catch the bottom of the dip it still did a good job protecting some gains.

jamesd

k6chris said:

jamesd said:

If you want to take a view on the Pound you might consider the Vanguard FTSE Developed World Hedged fund, not sure about ETF version. Hedges Pound currency risk and that's beneficial if the Pound increases in value. Since it's towards the lower end of the common range that may be a good move. Or not, your call. It's my own largest single holding and has been since brexit time when the value was particularly low.

How is the fund hedged??

Monthly vs US Dollar.

Thrugelmir

Alexland said:

jamesd said:

If you want to take a view on the Pound...

I've been watching the pound decline against the dollar thinking it might soon be time to hedge at least some of our accounts to protect against a reversion back to a long term reasonable position of around 1.40. However at the current 1.32 that's only around 6% off which I am relaxed about as there may be further benefits. If the pound dropped to around 1.26 which seems possible if the government continues to decay then I would be tempted to start hedging. Last year during the UK's poorly received initial covid response when it dropped to around 1.15 we temporarily switched a couple of accounts to IWDG and although we didn't catch the bottom of the dip it still did a good job protecting some gains.

With US inflation running at 6.8%. The Fed is in a bind. The course of US economic and fiscal policy is what will drive the exchange rate in the near future. 

jamesd

With the Fed having fairly recently changed its targeting policy to be more flexible on inflation and the BoE having similar flexibility I'm not personally convinced that substantially higher rates are going to be caused by the current temporary bit of inflation, but longer term I do think that QE and low interest rates are going to e gradually undone. Maybe we'll see a symbolic 0.1% increase in Bank Rate at the December BoE meeting and perhaps something similar from the Fed? (shrug They both know the causes are transitory so I doubt either will act strongly.

[Deleted User]

Secret2ndAccount said:

VWRL tracks the FTSE All World Index, and charges 0.22%
HSBC FTSE All-World Index S      charges  0.12%
Can you get the HSBC version on Fidelity? It's available as Accumulation or Income versions

Looks like VWRL has 500 more stocks so, presumably, is a more accurate tracker but I agree; likely not worth 10 bp.  

[Deleted User]

Like another poster earlier I don't personally want any EM (especially not China) so I use VEVE (dist), VHVG (acc) 0.12% OCF very cheap on HL
I have no problem selling hundred thousand £ amounts, the figure quoted is the same as much smaller amounts

ex-pat_scot

Thanks all - I've gone for a large bucket of VEVE.
It seems the right mix of cost, range and risk.