Vanguard FTSE All World UCITS ETF & Vanguard FTSE Developed World ex-UK Equity Index

tebbins

sebtomato said:

tigerspill said:

sebtomato said:

At 61% invested in North America, VWRL is too biased, while vls funds are too biased towards the UK.

VWRL is also charging 0.22%.

I have made my own VLS type fund for about 0.11%.

Thanks.  If you dont mind me asking, which funds did you use?

I have replaced VLS100 by a number of ETFs or funds (when no ETFs available). This means some lower fees (0.11% combined fee, instead of 0.22%) but also a risk profile a bit more spread around regions, than having too much in the US or UK, which I prefer for diversification.

I am particularly nervous about a few very large caps marking up a large part of the US market, such as Apple, Microsoft, Google and Tesla. 

Regions	%	Code	Description
Europe (ex. UK)	11%	VERX	FTSE Developed Europe ex UK
Small cap	8%	Fund	Global Small Cap Index Fund
UK	20%	Fund	FTSE UK All Share Index
Japan	6%	VJPN	FTSE Japan
Asia	3%	VAPX	FTSE Developed Asia Pacific ex-Japan (Australia, South Korea)
USA	44%	VUSA	S&P500
Emerging	8%	VFEM	FTSE Emerging Markets (China)

=100% and investments in 8,938 companies, with very little overlap.

Of course, the drawback is having to rebalance manually once in a while, compared to a VLS fund that does it automatically, and using ETFs, which doesn't allow for exact amounts to be invested.

This looks like you've basically replicated VLS or something closely resembling it.
The weight of the mega caps is simply a result of them being mega caps, if you choose an index fund or an index-based fund-of-funds, you track whatever the market decides each company is worth. Index concentration is somewhat more pronounced in the UK though without the concentration into highly valued tech stocks that do half of the S&P's buybacks, but much more pronounced in most other countries or even regions.
It is worth mentioning that some of that apparent concentration is because these are groups of companies, organised into large operating divisions with often hundreds of operating subsidiaries, Berkshire Hathaway is a great example. Were these de-consolidated, the weights would look quite different but arguably the economic reality of their operations and returns may not be.

sebtomato

tebbins said:

sebtomato said:

tigerspill said:

sebtomato said:

At 61% invested in North America, VWRL is too biased, while vls funds are too biased towards the UK.

VWRL is also charging 0.22%.

I have made my own VLS type fund for about 0.11%.

Thanks.  If you dont mind me asking, which funds did you use?

I have replaced VLS100 by a number of ETFs or funds (when no ETFs available). This means some lower fees (0.11% combined fee, instead of 0.22%) but also a risk profile a bit more spread around regions, than having too much in the US or UK, which I prefer for diversification.

I am particularly nervous about a few very large caps marking up a large part of the US market, such as Apple, Microsoft, Google and Tesla. 

Regions	%	Code	Description
Europe (ex. UK)	11%	VERX	FTSE Developed Europe ex UK
Small cap	8%	Fund	Global Small Cap Index Fund
UK	20%	Fund	FTSE UK All Share Index
Japan	6%	VJPN	FTSE Japan
Asia	3%	VAPX	FTSE Developed Asia Pacific ex-Japan (Australia, South Korea)
USA	44%	VUSA	S&P500
Emerging	8%	VFEM	FTSE Emerging Markets (China)

=100% and investments in 8,938 companies, with very little overlap.

Of course, the drawback is having to rebalance manually once in a while, compared to a VLS fund that does it automatically, and using ETFs, which doesn't allow for exact amounts to be invested.

This looks like you've basically replicated VLS or something closely resembling it.
The weight of the mega caps is simply a result of them being mega caps, if you choose an index fund or an index-based fund-of-funds, you track whatever the market decides each company is worth. Index concentration is somewhat more pronounced in the UK though without the concentration into highly valued tech stocks that do half of the S&P's buybacks, but much more pronounced in most other countries or even regions.
It is worth mentioning that some of that apparent concentration is because these are groups of companies, organised into large operating divisions with often hundreds of operating subsidiaries, Berkshire Hathaway is a great example. Were these de-consolidated, the weights would look quite different but arguably the economic reality of their operations and returns may not be.

Berkshire Hathaway might be an exception as opposed to a rule, when compared to Microsoft, Apple, Tesla...

BH is basically a fund in itself, so well diversified. 

However, the others are very large single companies, with very high valuations currently.

Several could suffer from anti competitive laws or just hacking, and let's not even talk about Tesla and its 12 year old CEO.

sebtomato

grumiofoundation said:

sebtomato said:

tigerspill said:

sebtomato said:

At 61% invested in North America, VWRL is too biased, while vls funds are too biased towards the UK.

VWRL is also charging 0.22%.

I have made my own VLS type fund for about 0.11%.

Thanks.  If you dont mind me asking, which funds did you use?

I have replaced VLS100 by a number of ETFs or funds (when no ETFs available). This means some lower fees (0.11% combined fee, instead of 0.22%) but also a risk profile a bit more spread around regions, than having too much in the US or UK, which I prefer for diversification.

I am particularly nervous about a few very large caps marking up a large part of the US market, such as Apple, Microsoft, Google and Tesla. 

Regions	%	Code	Description
Europe (ex. UK)	11%	VERX	FTSE Developed Europe ex UK
Small cap	8%	Fund	Global Small Cap Index Fund
UK	20%	Fund	FTSE UK All Share Index
Japan	6%	VJPN	FTSE Japan
Asia	3%	VAPX	FTSE Developed Asia Pacific ex-Japan (Australia, South Korea)
USA	44%	VUSA	S&P500
Emerging	8%	VFEM	FTSE Emerging Markets (China)

=100% and investments in 8,938 companies, with very little overlap.

Of course, the drawback is having to rebalance manually once in a while, compared to a VLS fund that does it automatically, and using ETFs, which doesn't allow for exact amounts to be invested.

Unless you are sticking with these set percentages regardless of market movements?

Yes, goal is to stick to the same percentages, the same way VLS does it for you...

sebtomato

grumiofoundation said:

sebtomato said:

tigerspill said:

sebtomato said:

At 61% invested in North America, VWRL is too biased, while vls funds are too biased towards the UK.

VWRL is also charging 0.22%.

I have made my own VLS type fund for about 0.11%.

Thanks.  If you dont mind me asking, which funds did you use?

I have replaced VLS100 by a number of ETFs or funds (when no ETFs available). This means some lower fees (0.11% combined fee, instead of 0.22%) but also a risk profile a bit more spread around regions, than having too much in the US or UK, which I prefer for diversification.

I am particularly nervous about a few very large caps marking up a large part of the US market, such as Apple, Microsoft, Google and Tesla. 

Regions	%	Code	Description
Europe (ex. UK)	11%	VERX	FTSE Developed Europe ex UK
Small cap	8%	Fund	Global Small Cap Index Fund
UK	20%	Fund	FTSE UK All Share Index
Japan	6%	VJPN	FTSE Japan
Asia	3%	VAPX	FTSE Developed Asia Pacific ex-Japan (Australia, South Korea)
USA	44%	VUSA	S&P500
Emerging	8%	VFEM	FTSE Emerging Markets (China)

=100% and investments in 8,938 companies, with very little overlap.

Of course, the drawback is having to rebalance manually once in a while, compared to a VLS fund that does it automatically, and using ETFs, which doesn't allow for exact amounts to be invested.

So to clarify you stated  "vls funds are too biased towards the UK." and then proceeded to replicate the UK 'bias'? 

I don't really understand how your ETFs are actually significantly more diversified (if at all) than VLS100 or a simple global tracker. You have 3% (0.44 x 0.0691) in apple, 2.6% (0.44 x 0.06) in microsoft etc - basically the same as a global tracker (3.4% and 3%) https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-acc/portfolio-data


Unless I have missed something why do you need to rebalance? The regional percentages of a global tracker will change based on market movements, as will your collection of ETFs? Unless you are sticking with these set percentages regardless of market movements?

The fund you have provided the link (Vanguard FTSE Global All Cap) for has 62% in North America...

grumiofoundation

sebtomato said:

grumiofoundation said:

sebtomato said:

tigerspill said:

sebtomato said:

At 61% invested in North America, VWRL is too biased, while vls funds are too biased towards the UK.

VWRL is also charging 0.22%.

I have made my own VLS type fund for about 0.11%.

Thanks.  If you dont mind me asking, which funds did you use?

I have replaced VLS100 by a number of ETFs or funds (when no ETFs available). This means some lower fees (0.11% combined fee, instead of 0.22%) but also a risk profile a bit more spread around regions, than having too much in the US or UK, which I prefer for diversification.

I am particularly nervous about a few very large caps marking up a large part of the US market, such as Apple, Microsoft, Google and Tesla. 

Regions	%	Code	Description
Europe (ex. UK)	11%	VERX	FTSE Developed Europe ex UK
Small cap	8%	Fund	Global Small Cap Index Fund
UK	20%	Fund	FTSE UK All Share Index
Japan	6%	VJPN	FTSE Japan
Asia	3%	VAPX	FTSE Developed Asia Pacific ex-Japan (Australia, South Korea)
USA	44%	VUSA	S&P500
Emerging	8%	VFEM	FTSE Emerging Markets (China)

=100% and investments in 8,938 companies, with very little overlap.

Of course, the drawback is having to rebalance manually once in a while, compared to a VLS fund that does it automatically, and using ETFs, which doesn't allow for exact amounts to be invested.

So to clarify you stated  "vls funds are too biased towards the UK." and then proceeded to replicate the UK 'bias'? 

I don't really understand how your ETFs are actually significantly more diversified (if at all) than VLS100 or a simple global tracker. You have 3% (0.44 x 0.0691) in apple, 2.6% (0.44 x 0.06) in microsoft etc - basically the same as a global tracker (3.4% and 3%) https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-acc/portfolio-data


Unless I have missed something why do you need to rebalance? The regional percentages of a global tracker will change based on market movements, as will your collection of ETFs? Unless you are sticking with these set percentages regardless of market movements?

The fund you have provided the link for has 62% in North America...

I didn’t say it didn’t.
That is a simple global tracker, and I was highlighting that your portfolio has basically the same percentages of the top holdings, that seem to be one aspect of a global tracker you were worried  about. 

That along with the fact you have the 20% in the uk seems to suggest your holdings aren’t solving the problems you implied you thought there were with VLS 

CheekyMikey

tigerspill said:

To date, I have been investing in VLS funds.  I them wanted to balance the UK bias and edge my equities %age up a but so invested in the VG Dev. Wld. ex. UK fund.
I am now at the point where I want to again increase my equity %age in a diversified way and have been looking at the VWRL from Vanguard which is an all world index tracker ETF.
While I appreciate it is not totally fair to compare these two investments as they aren't the same, it seems that historically that the ex. UK fund has consistently out performed VWRL.  And I am now asking myself, why I would go with VWRL - even though it seems to meet my need a bit better in terns of all round equity diversification.

A is VWRL and B is the Dev. World fund.

I too have a fair bit in Dev World Ex UK but I have supplemented it with a decent but significantly less amount in Vanguard FTSE UK All Share Index. I don’t know if that’s a very good way of doing things but it’s worked out ok for the last four years…

sebtomato

grumiofoundation said:

I don't really understand how your ETFs are actually significantly more diversified (if at all) than VLS100 or a simple global tracker. 

I didn’t say it didn’t.

You said you didn't understand how my portfolio is more diversified than the VLS100, and I replied saying the investments in the various regions are different, so more diversified (as far as I am concerned).

As for the UK portion, VLS100 has:

* 19.6% "UK all shares"
* 4.8% FTSE100
* 0.9% FTSE250

so that's not 20%...

See https://www.vanguardinvestor.co.uk/investments/vanguard-lifestrategy-100-equity-fund-accumulation-shares/portfolio-data

VLS100 has around 25% in the UK market, so quite a large proportion and often quoted as a drawback/concern.

bostonerimus

Rather than arguing about the minutiae of geographical asset allocation you should be asking yourself how you can increase your contributions and whether your portfolio might grow in a way to meet your retirement goals. 

grumiofoundation

sebtomato said:

grumiofoundation said:

I don't really understand how your ETFs are actually significantly more diversified (if at all) than VLS100 or a simple global tracker. 

I didn’t say it didn’t.

You said you didn't understand how my portfolio is more diversified than the VLS100, and I replied saying the investments in the various regions are different, so more diversified (as far as I am concerned).

As for the UK portion, VLS100 has:

* 19.6% "UK all shares"
* 4.8% FTSE100
* 0.9% FTSE250

so that's not 20%...

See https://www.vanguardinvestor.co.uk/investments/vanguard-lifestrategy-100-equity-fund-accumulation-shares/portfolio-data

VLS100 has around 25% in the UK market, so quite a large proportion and often quoted as a drawback/concern.

To me I don't see a dramatic difference between 25% and 20% or even 62% and 44% such that one could claim that the issues you were worried about are no longer an issue. For example the concentration in the top holdings, or the UK 'bias' (versus I presume a 'standard' global tracker). 

The only diversification I see you have added is the global small cap fund, not the fiddling with geographical allocations. 

tigerspill

tebbins said:

Vwrl is not biased at all, it simply seeks to track a global large and mid caps equity index.

OP - since the mid 2010s, the US has done much better than the rest of the world, since the GFC, through Brexit and Covid the UK has done a bit worse than the rest of the world. This, and the effect of VWRLs inclusion of emerging markets explain the difference.


By your logic, you would always be swapping whatever you were holding for whatever had done better lately.

OK.  Maybe I wasn't totally clear.  I have no plans to change what I already have as I am happy with this.  However, my question related to additional money I have come into through inheritance.  This is money I have never had in my plans (deliberately).  So I want to push more into equities and I believe I have sufficient in cash and equity/bond blended funds.  I believe that I am happy to take a higher risk with this money in terms of volatility.