Transferring from Nest to Vanguard

[Deleted User]

dunstonh said:

Deleted_User said:

dunstonh said:

There are no issues with “certain ETFs”. 

You need to learn about them then as its clear you dont understand them.

IFAs like active funds. Best ETFs tend to be passive. Hence the prejudice. 

You are not in this country and don't even know what an IFA does.   Your regular anti-IFA rants show your prejudice.

You should address your claims of bloody foreigners not knowing anything to this guy.  I am merely summarizing his article https://www.investmentweek.co.uk/author/7150e705-0ca5-4862-b9d8-c5fb9dca1f5c/tom-eckett

Perhaps you shouldn't rely on incorrect articles then.

The actual position is that ETFs have always been unbundled, but OEICs only become unbundled in 2012 (in readiness of the changes that required them to be from 1st January 2013).    

When OEICs were bundled you wouldn't have found an OEIC tracker that was cheaper. 
However, since unbundling, OEICs are now comparable or cheaper.  e.g.  HSBC and Fidelity trackers at 0.06% pa. OCF.  Vanguard are not as competitive on OEIC trackers in the UK with 0.10-0.15% being commonplace.   However, the prices have been falling over the years.  So, I wouldn't be surprised to see them align with Fidelity and HSBC in due course.  L&G and ishares (the other popular OEIC trackers) are similar in price to Vanguard.

Once it gets to 0.1% OCF, the difference of plus minus a few basis points isn’t a big deal.  The cheap HSBC/Fidelity funds I looked at had far fewer securities within them than Van versions. Having fewer smaller companies cuts the costs but is a disadvantage in my book. Others may think differently. We are basically arguing about 6 and two 3s.

Regardless of specifics on this or that OEIC tracker, Vanguard’s platform and ETFs are a great choice and far superior to Nests offering. Not the only great choice but particularly good for smaller funds. 

On ETFs in general, please remember to address your concerns to Financial Times. They appear to be clueless about Britain because they claim that ETFs are at the forefront of cutting costs: https://www.ft.com/content/d9eec772-cbf2-47a5-a303-39bedb551c7a. Hargreaves are getting in on the act.  They know nothing.

Cus

bostonerimus said:

On the UK Vanguard platform it's true that you can only buy Vanguard funds, but they provide a good range of funds that will be sufficient for the vast majority of people to build an appropriate portfolio. There is a fetish with choice for choice's sake.

It is often stated on this forum that people should not use an FA instead of an IFA due to their restricted products. There is never a discussion about how a particular FA is still ok as they offer a good range of products that covers most people. Perhaps this attitude should also apply to platforms.

Alternatively, if you use an FA that charges an ongoing 0.1% versus a regular IFA who charges more, do we consider it?

[Deleted User]

Cus said:

bostonerimus said:

On the UK Vanguard platform it's true that you can only buy Vanguard funds, but they provide a good range of funds that will be sufficient for the vast majority of people to build an appropriate portfolio. There is a fetish with choice for choice's sake.

It is often stated on this forum that people should not use an FA instead of an IFA due to their restricted products. There is never a discussion about how a particular FA is still ok as they offer a good range of products that covers most people. Perhaps this attitude should also apply to platforms.

Alternatively, if you use an FA that charges an ongoing 0.1% versus a regular IFA who charges more, do we consider it?

FAs are not advisors at all; they are vendors.  Ideally one wouldn’t use either them or IFAs for normal investing advice. When you have special circumstances and you do need advice, its very hard to pick a quality advisor because these are tiny companies and their reputation is often hearsay.  

Vanguard is a known value. They have a reputation world over.  John Bogle did more for investors than anyone.  They are the ones driving costs down all over the world. They are making things simpler for investors.   I use products from others too but their offering is always competitive and complete.  

dunstonh

Once it gets to 0.1% OCF, the difference of plus minus a few basis points isn’t a big deal.  The cheap HSBC/Fidelity funds I looked at had far fewer securities within them than Van versions.

In the UK, Vanguard uses sampled replication on the OEIC and full on the ETF.   HSBC and Fidelity both use full replication,





Differences in returns are tiny (as expect) but its worth noting that the OEICs are higher than the ETF.


Anyone buying any of these is going to get broadly identical returns and wont care for tiny differences like that.

But with lower ongoing charges and no dealing charges along with FSCS protection  this is why OEICs are still more popular in the UK.   

On ETFs in general, please remember to address your concerns to Financial Times.

That article is a mess.   it equates passive to ETF but passives exist in the UT/OEIC, life and pension fund universes as well.  

bostonerimus

I think we are at deuce in this pointless Davis Cup match between UK and Canada.

noclaf

Just to add my 2p, I use a mix of OEIC funds and ETF's. The vast majority of my investments are in a Vanguard ETF (on a non-Vanguard platform) and my S&SISA is  100% invested into FTSE Global All CAP.

 I am a big fan of the Vanguard platform for simplicity but am a bit annoyed about the fees we pay in the UK Vs the US.
0.23% for the FTSE Global All CAP, I don't see why Vanguard can't bring this down closer to 0.15% similar to Fidelity and HSBC OEIC funds, I assume they don't need to but it still irks me!

My only rule with ETF's is to use big established providers e.g: BlackRock, Vanguard, HSBC etc Just helps me sleep a bit better at night! In summary both OEIC's and ETF'S have their place/use cases but DYOR as always.

[Deleted User]

noclaf said:

Just to add my 2p, I use a mix of OEIC funds and ETF's. The vast majority of my investments are in a Vanguard ETF (on a non-Vanguard platform) and my S&SISA is  100% invested into FTSE Global All CAP.

 I am a big fan of the Vanguard platform for simplicity but am a bit annoyed about the fees we pay in the UK Vs the US.
0.23% for the FTSE Global All CAP, I don't see why Vanguard can't bring this down closer to 0.15% similar to Fidelity and HSBC OEIC funds, I assume they don't need to but it still irks me!

My only rule with ETF's is to use big established providers e.g: BlackRock, Vanguard, HSBC etc Just helps me sleep a bit better at night! In summary both OEIC's and ETF'S have their place/use cases but DYOR as always.

Looking at Van’s FTSE Global Allcap VWRL, it costs 0.22% and includes 3762 stocks.  HSBC OEIC costs 13bp but has 3359 holdings. Can’t find the Fidelity version of this index. 

Including these 400 extra holdings will be expensive. They will be small cap and emerging market, relatively illiquid stocks. That’s at least one of the reasons for the delta in costs.   You get better accuracy. If you are a perfectionist it could be worth it.  And you might be saving on platform costs by only having ETFs. But 9bps would be a bit of an irritant.

Why is it more expensive than in the US? Three possible reasons:
- the economy of scale
- taxes might be lower in the US. Productivity might be higher. More red tape in the UK
- US fund investors own Vanguard (although shouldn’t impact ETFs)

My suspicion is that Vanguard will keep driving the costs down like they have done in the other jurisdictions. UK is a little late to the ETF party; as fund sizes grow the overall costs don’t tend to grow as much, so OCF ratio naturally falls. 

Good point on using only the likes of BlackRock for ETFs.