Investing in Global Trackers and other similar investments

GeoffTF

Thrugelmir said:

GeoffTF said:

Michael121 said:

GeoffTF said:

Thrugelmir said:
Mega caps have only existed more recently. Their valuations owe much to the volume of money pouring into passively managed investment vehicles.

Mega cap valuations owe nothing to market weighted trackers. They do not trade at all as valuations change. New investors buy all the stocks in their free float market proportions, and exert the same upward pressure on all of them.

Thrugelmir said:
Tesla how investors can overpay for a stock. As the entry into the SP500 was so well flagged that many investors (such as BG) bagged a comfortable profit for doing nothing. Passive funds were forced to pay over the odds to reweight their holdings.

The S&P 500 is not a simple market weighted index. It has a rule that companies have to be profitable to be included in the index. That had unfortunate results for S&P 500 investors when Tesla became profitable. You avoid that problem by investing a simple market weighted tracker. They did not have any problem with Tesla. They bought it when it was an unprofitable tiddler, and passively held it as it grew.

By simple weighted do you mean equal weighted?

No, by simple market weighted, I mean buying the same percentage of every company's stock, not investing an equal amount in each stock. If a company is ten times as big, you buy ten times as much. The S&P 500 is picky about which stocks it includes, and is restricted to enormous companies.

The bubble in the INRG ETF is an example of how passive investing can cause distortion to the pricing of stocks. 

That is iShares Global Clean Energy UCITS ETF. It is not a whole market tracker.

Thrugelmir

DoneWorking said:

GeoffTF said:

DoneWorking said:
Keeping in mind I want to go ESG can anyone give me any ideas on selecting suitable funds

Would I go for just one fund

You would need to tell us what you mean by ESG, i.e. give us a list of the types of companies that you do not want to invest in. The shorter the list, the better, as far as risk and likely return are concerned.

Yes, you should go with just one fund.

Don't want to go with fossil fuels or weapons

Fossil fuel companies are going to exist whether you own the shares or not. Transition to green energy isn't neither going to be quick nor achieved without the input of the existing major players. 

DoneWorking

Thrugelmir said:

DoneWorking said:

GeoffTF said:

DoneWorking said:
Keeping in mind I want to go ESG can anyone give me any ideas on selecting suitable funds

Would I go for just one fund

You would need to tell us what you mean by ESG, i.e. give us a list of the types of companies that you do not want to invest in. The shorter the list, the better, as far as risk and likely return are concerned.

Yes, you should go with just one fund.

Don't want to go with fossil fuels or weapons

Fossil fuel companies are going to exist whether you own the shares or not. Transition to green energy isn't neither going to be quick nor achieved without the input of the existing major players. 

I'm aware of that

But I do not want to use my money to invest in them

I am of course aware that I do not have control over  any money I have in savings accounts

GeoffTF

DoneWorking said:

GeoffTF said:

DoneWorking said:
Keeping in mind I want to go ESG can anyone give me any ideas on selecting suitable funds

Would I go for just one fund

You would need to tell us what you mean by ESG, i.e. give us a list of the types of companies that you do not want to invest in. The shorter the list, the better, as far as risk and likely return are concerned.

Yes, you should go with just one fund.

Don't want to go with fossil fuels or weapons

Here is the one that was suggested earlier:

https://www.vanguardinvestor.co.uk/investments/vanguard-esg-global-all-cap-ucits-etf-usd-distributing/overview

That is 100% equities, which is appropriate if you also have savings accounts. An IFA is not going to bother with savings accounts. That would be too much work. He would use a packaged find with equities and bonds. That will not give as good a return for the same risk level. Vanguard does packaged ESG funds, e.g.:

https://www.vanguardinvestor.co.uk/investments/vanguard-sustainablelife-40-50-equity-fund-a-gbp-accumulation/overview?intcmpgn=blendedglobal_sustainablelife4050equityfund_fund_link

That fund excludes fossil fuels, but only excludes "controversial weapons".

DoneWorking

GeoffTF said:

DoneWorking said:

GeoffTF said:

DoneWorking said:
Keeping in mind I want to go ESG can anyone give me any ideas on selecting suitable funds

Would I go for just one fund

You would need to tell us what you mean by ESG, i.e. give us a list of the types of companies that you do not want to invest in. The shorter the list, the better, as far as risk and likely return are concerned.

Yes, you should go with just one fund.

Don't want to go with fossil fuels or weapons

Here is the one that was suggested earlier:

https://www.vanguardinvestor.co.uk/investments/vanguard-esg-global-all-cap-ucits-etf-usd-distributing/overview

That is 100% equities, which is appropriate if you also have savings accounts. An IFA is not going to bother with savings accounts. That would be too much work. He would use a packaged find with equities and bonds. That will not give as good a return for the same risk level. Vanguard does packaged ESG funds, e.g.:

https://www.vanguardinvestor.co.uk/investments/vanguard-sustainablelife-40-50-equity-fund-a-gbp-accumulation/overview?intcmpgn=blendedglobal_sustainablelife4050equityfund_fund_link

That fund excludes fossil fuels, but only excludes "controversial weapons".

So if I invest say £250k
50% in a savings/bond ladder

Then 50% in  the vanguard sustainable life 40 50 would that meet my requirements

I'm assuming put the whole sum in to the Vanguard straight away

Do they constantly adjust it on an ongoing basis

What is the anticipated return after costs

I will of course do my own research on this fund

Including how to make the best of any tax implications

What would happen if Vanguard went bust

sebtomato

DoneWorking said:

What would happen if Vanguard went bust

Given that they have $7 trillions under management, quite unlikely, but your funds/investments wouldn't be affected.

https://www.vanguardinvestor.co.uk/need-help/answer/what-happens-to-my-money-if-vanguard-become-insolvent

GeoffTF

DoneWorking said:

GeoffTF said:

DoneWorking said:

GeoffTF said:

DoneWorking said:
Keeping in mind I want to go ESG can anyone give me any ideas on selecting suitable funds

Would I go for just one fund

You would need to tell us what you mean by ESG, i.e. give us a list of the types of companies that you do not want to invest in. The shorter the list, the better, as far as risk and likely return are concerned.

Yes, you should go with just one fund.

Don't want to go with fossil fuels or weapons

Here is the one that was suggested earlier:

https://www.vanguardinvestor.co.uk/investments/vanguard-esg-global-all-cap-ucits-etf-usd-distributing/overview

That is 100% equities, which is appropriate if you also have savings accounts. An IFA is not going to bother with savings accounts. That would be too much work. He would use a packaged find with equities and bonds. That will not give as good a return for the same risk level. Vanguard does packaged ESG funds, e.g.:

https://www.vanguardinvestor.co.uk/investments/vanguard-sustainablelife-40-50-equity-fund-a-gbp-accumulation/overview?intcmpgn=blendedglobal_sustainablelife4050equityfund_fund_link

That fund excludes fossil fuels, but only excludes "controversial weapons".

So if I invest say £250k
50% in a savings/bond ladder

Then 50% in  the vanguard sustainable life 40 50 would that meet my requirements

I'm assuming put the whole sum in to the Vanguard straight away

Do they constantly adjust it on an ongoing basis

What is the anticipated return after costs

I will of course do my own research on this fund

Including how to make the best of any tax implications

What would happen if Vanguard went bust

If you do that, you will only have about a quarter of your money in equities. If you want that, you could put three quarters in the savings accounts and a quarter in the Vanguard ESG global all cap. Either option will be safer than 50% equities, but is also more likely to fail to beat inflation over the next ten years.

If you want about 50 : 50 just buy the Vanguard Sustainable Life 40 50, and just keep a small cash reserve. That is much easier. You do not have to bother with lots of savings accounts. The downside is that the safer bonds in the Vanguard fund will pay less interest than the savings accounts, and the riskier ones may default. The Vanguard fund mirrors what an IFA would offer, but is much cheaper if you DIY. An IFA might make things much more complicated with lots of funds, to make it look difficult, but that will not help.

DoneWorking

GeoffTF said:

DoneWorking said:

GeoffTF said:

DoneWorking said:

GeoffTF said:

DoneWorking said:
Keeping in mind I want to go ESG can anyone give me any ideas on selecting suitable funds

Would I go for just one fund

You would need to tell us what you mean by ESG, i.e. give us a list of the types of companies that you do not want to invest in. The shorter the list, the better, as far as risk and likely return are concerned.

Yes, you should go with just one fund.

Don't want to go with fossil fuels or weapons

Here is the one that was suggested earlier:

https://www.vanguardinvestor.co.uk/investments/vanguard-esg-global-all-cap-ucits-etf-usd-distributing/overview

That is 100% equities, which is appropriate if you also have savings accounts. An IFA is not going to bother with savings accounts. That would be too much work. He would use a packaged find with equities and bonds. That will not give as good a return for the same risk level. Vanguard does packaged ESG funds, e.g.:

https://www.vanguardinvestor.co.uk/investments/vanguard-sustainablelife-40-50-equity-fund-a-gbp-accumulation/overview?intcmpgn=blendedglobal_sustainablelife4050equityfund_fund_link

That fund excludes fossil fuels, but only excludes "controversial weapons".

So if I invest say £250k
50% in a savings/bond ladder

Then 50% in  the vanguard sustainable life 40 50 would that meet my requirements

I'm assuming put the whole sum in to the Vanguard straight away

Do they constantly adjust it on an ongoing basis

What is the anticipated return after costs

I will of course do my own research on this fund

Including how to make the best of any tax implications

What would happen if Vanguard went bust

If you do that, you will only have about a quarter of your money in equities. If you want that, you could put three quarters in the savings accounts and a quarter in the Vanguard ESG global all cap. Either option will be safer than 50% equities, but is also more likely to fail to beat inflation over the next ten years.

If you want about 50 : 50 just buy the Vanguard Sustainable Life 40 50, and just keep a small cash reserve. That is much easier. You do not have to bother with lots of savings accounts. The downside is that the safer bonds in the Vanguard fund will pay less interest than the savings accounts, and the riskier ones may default. The Vanguard fund mirrors what an IFA would offer, but is much cheaper if you DIY. An IFA might make things much more complicated with lots of funds, to make it look difficult, but that will not help.

So 
Go with £200k in the Vanguard

£50k in savings account

Do people put as much as £200k into one Vanguard Fund

Could I drop it to £150k

What is the likelihood of Bonds defaulting

GeoffTF

DoneWorking said:

GeoffTF said:

DoneWorking said:

GeoffTF said:

DoneWorking said:

GeoffTF said:

DoneWorking said:
Keeping in mind I want to go ESG can anyone give me any ideas on selecting suitable funds

Would I go for just one fund

You would need to tell us what you mean by ESG, i.e. give us a list of the types of companies that you do not want to invest in. The shorter the list, the better, as far as risk and likely return are concerned.

Yes, you should go with just one fund.

Don't want to go with fossil fuels or weapons

Here is the one that was suggested earlier:

https://www.vanguardinvestor.co.uk/investments/vanguard-esg-global-all-cap-ucits-etf-usd-distributing/overview

That is 100% equities, which is appropriate if you also have savings accounts. An IFA is not going to bother with savings accounts. That would be too much work. He would use a packaged find with equities and bonds. That will not give as good a return for the same risk level. Vanguard does packaged ESG funds, e.g.:

https://www.vanguardinvestor.co.uk/investments/vanguard-sustainablelife-40-50-equity-fund-a-gbp-accumulation/overview?intcmpgn=blendedglobal_sustainablelife4050equityfund_fund_link

That fund excludes fossil fuels, but only excludes "controversial weapons".

So if I invest say £250k
50% in a savings/bond ladder

Then 50% in  the vanguard sustainable life 40 50 would that meet my requirements

I'm assuming put the whole sum in to the Vanguard straight away

Do they constantly adjust it on an ongoing basis

What is the anticipated return after costs

I will of course do my own research on this fund

Including how to make the best of any tax implications

What would happen if Vanguard went bust

If you do that, you will only have about a quarter of your money in equities. If you want that, you could put three quarters in the savings accounts and a quarter in the Vanguard ESG global all cap. Either option will be safer than 50% equities, but is also more likely to fail to beat inflation over the next ten years.

If you want about 50 : 50 just buy the Vanguard Sustainable Life 40 50, and just keep a small cash reserve. That is much easier. You do not have to bother with lots of savings accounts. The downside is that the safer bonds in the Vanguard fund will pay less interest than the savings accounts, and the riskier ones may default. The Vanguard fund mirrors what an IFA would offer, but is much cheaper if you DIY. An IFA might make things much more complicated with lots of funds, to make it look difficult, but that will not help.

So 
Go with £200k in the Vanguard

£50k in savings account

Do people put as much as £200k into one Vanguard Fund

Could I drop it to £150k

What is the likelihood of Bonds defaulting

I have got much more than £200K in one Vanguard fund. If you need to raise more than £50K, you can sell some of the Vanguard fund. The average credit quality of the bonds will be about as good as that of the UK government (AA). They will virtually all be Investment Grade (BBB or above):

https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/investment-grade-bonds/

According to that, the AAA rated US government is thought to have no chance of default. The worst ever one year default rate for AA bonds was 0.38%. Riskier bonds pay more interest to compensate for the increased risk. Could the government allow the FSCS to fail, and people to lose money in their savings accounts? Perhaps, if things got bad enough, but it is very unlikely. These risks are much less than those of holding equities.

bostonerimus

DoneWorking said:

GeoffTF said:

DoneWorking said:

GeoffTF said:

DoneWorking said:
Keeping in mind I want to go ESG can anyone give me any ideas on selecting suitable funds

Would I go for just one fund

You would need to tell us what you mean by ESG, i.e. give us a list of the types of companies that you do not want to invest in. The shorter the list, the better, as far as risk and likely return are concerned.

Yes, you should go with just one fund.

Don't want to go with fossil fuels or weapons

Here is the one that was suggested earlier:

https://www.vanguardinvestor.co.uk/investments/vanguard-esg-global-all-cap-ucits-etf-usd-distributing/overview

That is 100% equities, which is appropriate if you also have savings accounts. An IFA is not going to bother with savings accounts. That would be too much work. He would use a packaged find with equities and bonds. That will not give as good a return for the same risk level. Vanguard does packaged ESG funds, e.g.:

https://www.vanguardinvestor.co.uk/investments/vanguard-sustainablelife-40-50-equity-fund-a-gbp-accumulation/overview?intcmpgn=blendedglobal_sustainablelife4050equityfund_fund_link

That fund excludes fossil fuels, but only excludes "controversial weapons".

So if I invest say £250k
50% in a savings/bond ladder

Then 50% in  the vanguard sustainable life 40 50 would that meet my requirements

I'm assuming put the whole sum in to the Vanguard straight away

Do they constantly adjust it on an ongoing basis

What is the anticipated return after costs

I will of course do my own research on this fund

Including how to make the best of any tax implications

What would happen if Vanguard went bust

Vanguard is owned by its funds which are owned my the customers who invest in Vanguard funds. So it's like a cooperative. So I'm not sure how it could go bust. Anyway Vanguard fund shares are totally separate from Vanguard's own finances and the only way you will lose money is if the underlaying investments go down in value.