Simple way to the S&P 500

tebbins

The S&P 500 underperformed the UK and rest of world from the 60s to the 80s. Over the very long term ie since 1900 its performance has been around the same in nominal terms as most of the rest of the world.

It's also worth saying that modern stock markets are very diverse by historic standards, though corporate consolidation is perhaps a pointless headwind to that. For much of the 1800s rail dominated.
Arguably the UK large-cap or total market, the FTSE 100 or All Share is more diverse than the S&P 500. The S&P is nearly 50% "hot/tech" between IT, comms, Amazon and Tesla. In the FTSE 100 around 25% of the weight is broadly consumer-related, 20% financial, and energy, mining, industrials and healthcare weigh around 10% each.
The idea that tech = higher returns is an unsubstantiated myth, from railmania onwards tech bubbles lead to capital being thrown at speculative start-ups. In the 2022 Berkshire Hathaway AGM Warren Buffett showed a screenshot from Wikipedia of US car companies with names starting with "ca" - there're loads of failures along the way. I think modern bubbles - crypto, NFTs, e-commerce, social media are the same.

The UK also has stronger governance, regulation, reporting standards and financials than the US market where dividends + buybacks exceed earnings - unsurprisingly inversely correlated with corporate bond yields. There's also an argument in Gervais Williams 'Slow Finance' about investing miles - the advantage of local knowledge can make domestic investors outperform those who seek faster growth in exciting far-flung locations they know little about. The global stock market is not one homogenous set of interchangeable exchanges and headquarters but a mess of complex, interwoven, different jurisdictions.

dunstonh

Tackkers said:

dunstonh said:

The S&P500 is a solid diverse index to follow, yes the US may outperform a global tracker or it may underperform during some cycles but it will still yield healthy returns even when underperforming.

What about currency fluctuations.  In the previous cycle, the rising pound and underperforming US equities was really damaging for those heavy in US equities.

The S&P500 is not a sold diverse index.  You yourself admit it is tech heavy.

It may be Tech heavy but so is the world we live in now, Tech isn't going to decline, only increase as AI and other technologies come to the fore over the next decades.

Just as people said over 20 years ago before tech stocks fell 90% in value.

I haven't said that I would go 100% in one area. I invest universally, S&P 500 is one of my holdings. 

post #1 indicated that it would be 100% in that.     

It certainly did not indicate it would be 100% in that. You assumed it would be 100% in that.

You may wish to read #1 again.  Followed by the later post that says: ....has read/heard that this magic S&P 500 thing gets mentioned a lot and out performs other things....

All the posts made indicate that it will be a 100% holding in an S&P500 tracker.

6022tivo

Appreciate all the comments. Some good reading. Will fire off a few thanks shortly. 

So, for simplicity, can anyone point me towards a bank, or site in which the fees are low/reasonable, can form part of a S&S ISA that someone can register an account, deposit some cash, and buy into a fund that is suitable. 

I didn't think it would be that complicated, the goals long term short term I know should be questioned, but in this case it won't matter for this general ask. 

Thanks in advance. 

6022tivo

masonic said:

Was the person who told him to open an account with Charles Stanley unwilling to tell him what to invest in? If not, I'm sure Charles Stanley has a list of funds that are available, including some of those S&P 500 type thingies.

I don't know, possibly from investment videos on youtube etc.. 
Not the best place to go, I'd rather ask people opinions on places like this, most give a reasonable and helpful response. 

GeoffTF

GeoffTF said:

Here is some data on the UK bias of UK pension funds:

https://www.saltus.co.uk/investors-digest/home-bias-and-global-diversification-should-i-invest-in-international-equity

"Taking data from the Purple Book 2020, the simple average pension fund weighting to UK equities has fallen from 60.4% in 2008 to 26.9% in 2020. If we weight the figures by fund size, the fall is even more dramatic, from 48% UK equity weighting in 2008 to 13.3% in 2020[6]."

We could take that as the judgement of the experts. There are, however, no experts on the future. A cynic would say that they have sold UK holdings, because they had done badly in the last ten years, which may be at just the wrong time. Morningstar is currently showing VUKE (FTSE 100 tracker) as 20.3% up over the last year and VWRL (All-World tracker) as 9.4% up. VUKE leads by 9.9%.

Here are the latest numbers for DB pensions:

https://www.ppf.co.uk/sites/default/files/2021-12/PPF_PurpleBook_2021.pdf

"The aggregate proportion of schemes’ assets invested in equities fell from 20.4 per cent to 19.0 per cent while the proportion in bonds rose from 69.2 per cent to 72.0 per cent. Within bonds, the index-linked bonds proportion increased from 46.1 per cent to 47.2 per cent. The corporate bonds proportion increased slightly from 28.0 per cent to 28.2 per cent, while the government fixed interest bonds proportion fell from 25.9 per cent to 24.6 per cent. Within equities, the UK-quoted proportion fell from 13.3 per cent to 11.6 per cent. The overseas-quoted proportion decreased from 69.0 per cent to 68.3 per cent, while the proportion of unquoted/private equities increased from 17.7 per cent to 20.1 per cent."

InvesterJones

6022tivo said:

So, for simplicity, can anyone point me towards a bank, or site in which the fees are low/reasonable, can form part of a S&S ISA that someone can register an account, deposit some cash, and buy into a fund that is suitable. 

See earlier reply:

InvesterJones said:

6022tivo said:

Some companies offer these S&P type funds or trackers or whatever they are, and it's just a friendly post to find out what is the best way to get involved in one. 

Check out the moneysavingexpert stocks and shares ISA page (https://www.moneysavingexpert.com/savings/stocks-shares-isas/) and pick a platform that works out best for your friend

6022tivo

InvesterJones said:

6022tivo said:

So, for simplicity, can anyone point me towards a bank, or site in which the fees are low/reasonable, can form part of a S&S ISA that someone can register an account, deposit some cash, and buy into a fund that is suitable. 

See earlier reply:

InvesterJones said:

6022tivo said:

Some companies offer these S&P type funds or trackers or whatever they are, and it's just a friendly post to find out what is the best way to get involved in one. 

Check out the moneysavingexpert stocks and shares ISA page (https://www.moneysavingexpert.com/savings/stocks-shares-isas/) and pick a platform that works out best for your friend

That's great, thanks. 
But I would not know which one would have an offering that covers this magical "S&P 500" product/fund? 
Or would the vanguard that someone helpfully mentioned cover it? I'm guessing most if not all listed in the S&S page on here will offer that "fund" ? 

https://www.vanguardinvestor.co.uk/investments/vanguard-s-and-p-500-ucits-etf-usd-distributing/overview

GazzaBloom

6022tivo said:

Appreciate all the comments. Some good reading. Will fire off a few thanks shortly. 

So, for simplicity, can anyone point me towards a bank, or site in which the fees are low/reasonable, can form part of a S&S ISA that someone can register an account, deposit some cash, and buy into a fund that is suitable. 

I didn't think it would be that complicated, the goals long term short term I know should be questioned, but in this case it won't matter for this general ask. 

Thanks in advance. 

Vanguard has very low fees and you can set up an ISA and select from a range of funds & ETFs including the S&P500 (VUSA)

https://www.vanguardinvestor.co.uk

6022tivo

GazzaBloom said:

6022tivo said:

Appreciate all the comments. Some good reading. Will fire off a few thanks shortly. 

So, for simplicity, can anyone point me towards a bank, or site in which the fees are low/reasonable, can form part of a S&S ISA that someone can register an account, deposit some cash, and buy into a fund that is suitable. 

I didn't think it would be that complicated, the goals long term short term I know should be questioned, but in this case it won't matter for this general ask. 

Thanks in advance. 

Vanguard has very low fees and you can set up an ISA and select from a range of funds & ETFs including the S&P500 (VUSA)

https://www.vanguardinvestor.co.uk

Excellent, many thanks. Just had a quick look at that link. 
For some reason I thought to access a Vanguard product directly you would have to go via a bank etc, especially to get it wrapped up in an ISA. 

I currently have a few vanguard funds via II.co.uk, I suppose it is probably worth me looking to move them out and deal with vanguard direct? 


I'm not sure of the benefit of using a bank or dealer if just getting vanguard funds then? 

GeoffTF

6022tivo said:

InvesterJones said:

6022tivo said:

So, for simplicity, can anyone point me towards a bank, or site in which the fees are low/reasonable, can form part of a S&S ISA that someone can register an account, deposit some cash, and buy into a fund that is suitable. 

See earlier reply:

InvesterJones said:

6022tivo said:

Some companies offer these S&P type funds or trackers or whatever they are, and it's just a friendly post to find out what is the best way to get involved in one. 

Check out the moneysavingexpert stocks and shares ISA page (https://www.moneysavingexpert.com/savings/stocks-shares-isas/) and pick a platform that works out best for your friend

That's great, thanks. 
But I would not know which one would have an offering that covers this magical "S&P 500" product/fund? 
Or would the vanguard that someone helpfully mentioned cover it? I'm guessing most if not all listed in the S&S page on here will offer that "fund" ? 

https://www.vanguardinvestor.co.uk/investments/vanguard-s-and-p-500-ucits-etf-usd-distributing/overview

All brokers will offer Vanguard ETFs. Here is a price comparison:

https://monevator.com/find-the-best-online-broker/