High negative investment returns after charges.

Albermarle

Cus said:

Deleted_User said:

Cus said:

Deleted_User said:

Without knowing anything about your specific investments, your losses do seem high compared to FTSE World. More so, given that you dripped money in over the course of the year rather than had it all invested up front.

Workplace scheme charges tend to be reasonable so the issue is likely with your asset allocation.

Just a quick check on trustnet, looking at the very popular vanguard lifestrategy 100%, 80% and 60% funds, and YTD they are down 7,9 and 11%, so the OP is is the ballpark so to speak.  

FT is showing

-6.5% for VLS100 https://markets.ft.com/data/funds/tearsheet/performance?s=GB00B41XG308:GBP
-8.7% for VLS80 https://markets.ft.com/data/funds/tearsheet/summary?s=GB00B4PQW151:GBP

But I take your point. I was assuming that with such a small fund the individual is young and in a 100% stock fund. With the pound dropping so much FTSE All World is down about 1.5% in GBP.

I'm confused on the GBP part.  Looking at the Vanguard FTSE All World  UCITS ETF GBP is down 6.5%. Surely most UK based investors would buy the standard etf like this, rather than search for a non currency hedged fund? I mean if you are in the UK, then why put additional currency risk to your investment?

As said it is not hedged. So the majority of assets in the fund are in Dollars, then some in Euro etc and a small part in GBP. Vanguard just convert it all to GBP at the prevailing rate, so you can buy and sell it in GBP.
This is why it is only down 6.5%, when the US markets are down over 20%. The weak Pound against the Dollar has taken the sting out of the drop.
On the other side GBP investors will not have seen any benefit from the rise in US markets since October, as the Pound strengthened at the same time.

Cus

Thanks to all replies, but the reason I am confused is that if the above mentioned vanguard etf is not GBP hedged, then why is it down 6.5% YTD, rather than 1.5% as per @Deleted_User indicated? 

Edit 

To add, the Vanguard FTSE All World  UCITS ETF GBP and the Vanguard FTSE All World  UCITS ETF USD both have the same YTD performance of -6.5%. so are these both not hedged and just denominated in different currencies? 

Prism

Cus said:

Thanks to all replies, but the reason I am confused is that if the above mentioned vanguard etf is not GBP hedged, then why is it down 6.5% YTD, rather than 1.5% as per @Deleted_User indicated? 

Edit 

To add, the Vanguard FTSE All World  UCITS ETF GBP and the Vanguard FTSE All World  UCITS ETF USD both have the same YTD performance of -6.5%. so are these both not hedged and just denominated in different currencies? 

They have both returned the same in GBP which is what you are seeing reported. Neither are hedged. The USD fund is converted to GBP to make it easier to compare the returns.

[Deleted User]

Prism said:

Cus said:

Deleted_User said:

Cus said:

Deleted_User said:

Without knowing anything about your specific investments, your losses do seem high compared to FTSE World. More so, given that you dripped money in over the course of the year rather than had it all invested up front.

Workplace scheme charges tend to be reasonable so the issue is likely with your asset allocation.

Just a quick check on trustnet, looking at the very popular vanguard lifestrategy 100%, 80% and 60% funds, and YTD they are down 7,9 and 11%, so the OP is is the ballpark so to speak.  

FT is showing

-6.5% for VLS100 https://markets.ft.com/data/funds/tearsheet/performance?s=GB00B41XG308:GBP
-8.7% for VLS80 https://markets.ft.com/data/funds/tearsheet/summary?s=GB00B4PQW151:GBP

But I take your point. I was assuming that with such a small fund the individual is young and in a 100% stock fund. With the pound dropping so much FTSE All World is down about 1.5% in GBP.

I'm confused on the GBP part.  Looking at the Vanguard FTSE All World  UCITS ETF GBP is down 6.5%. Surely most UK based investors would buy the standard etf like this, rather than search for a non currency hedged fund? I mean if you are in the UK, then why put additional currency risk to your investment?

The standard ETFs and funds are not currency hedged and you would expect them to move with changes in GBP. Hedging costs additional money and unless the goal is to absolutely reduce volatility then its generally just a drag on performance. Vanguard UK do hedge their global bond funds to GBP as an example of this.

Hedging currency increases volatility in stock portfolios.  The only reason to do this is when trying to time the currency market.

[Deleted User]

Cus said:

Thanks to all replies, but the reason I am confused is that if the above mentioned vanguard etf is not GBP hedged, then why is it down 6.5% YTD, rather than 1.5% as per @Deleted_User indicated? 

Edit 

To add, the Vanguard FTSE All World  UCITS ETF GBP and the Vanguard FTSE All World  UCITS ETF USD both have the same YTD performance of -6.5%. so are these both not hedged and just denominated in different currencies? 

Looks like I got the wrong number. Sorry

Cus

Deleted_User said:

Cus said:

Thanks to all replies, but the reason I am confused is that if the above mentioned vanguard etf is not GBP hedged, then why is it down 6.5% YTD, rather than 1.5% as per @Deleted_User indicated? 

Edit 

To add, the Vanguard FTSE All World  UCITS ETF GBP and the Vanguard FTSE All World  UCITS ETF USD both have the same YTD performance of -6.5%. so are these both not hedged and just denominated in different currencies? 

Looks like I got the wrong number. Sorry

No worries, thanks for comment. I guess that all these I'm down 10% this year' comments we see from UK based people includes the GBP v USD benefit this year.  Or does it? Would you have only seen this fx benefit if you used GBP hedged funds?

[Deleted User]

Cus said:

Deleted_User said:

Cus said:

Thanks to all replies, but the reason I am confused is that if the above mentioned vanguard etf is not GBP hedged, then why is it down 6.5% YTD, rather than 1.5% as per @Deleted_User indicated? 

Edit 

To add, the Vanguard FTSE All World  UCITS ETF GBP and the Vanguard FTSE All World  UCITS ETF USD both have the same YTD performance of -6.5%. so are these both not hedged and just denominated in different currencies? 

Looks like I got the wrong number. Sorry

No worries, thanks for comment. I guess that all these I'm down 10% this year' comments we see from UK based people includes the GBP v USD benefit this year.  Or does it? Would you have only seen this fx benefit if you used GBP hedged funds?

The other way around. You only see this “benefit” if you used unhedged funds. Most people don’t hedge stocks. Vanguard LS funds do hedge bonds. 

Albermarle

Cus said:

Deleted_User said:

Cus said:

Thanks to all replies, but the reason I am confused is that if the above mentioned vanguard etf is not GBP hedged, then why is it down 6.5% YTD, rather than 1.5% as per @Deleted_User indicated? 

Edit 

To add, the Vanguard FTSE All World  UCITS ETF GBP and the Vanguard FTSE All World  UCITS ETF USD both have the same YTD performance of -6.5%. so are these both not hedged and just denominated in different currencies? 

Looks like I got the wrong number. Sorry

No worries, thanks for comment. I guess that all these I'm down 10% this year' comments we see from UK based people includes the GBP v USD benefit this year.  Or does it? Would you have only seen this fx benefit if you used GBP hedged funds?

As explained earlier, the fact that US markets are down by over 20% this year has been partly nullified by the weakness of the Pound against the dollar, for UK investors with US equities in their portfolio/funds. 
In the opposite way over the last couple of months the US markets have improved, but GBP investors have not seen any benefit as the Pound has improved against the Dollar at the same time.

Prism

Cus said:

Deleted_User said:

Cus said:

Thanks to all replies, but the reason I am confused is that if the above mentioned vanguard etf is not GBP hedged, then why is it down 6.5% YTD, rather than 1.5% as per @Deleted_User indicated? 

Edit 

To add, the Vanguard FTSE All World  UCITS ETF GBP and the Vanguard FTSE All World  UCITS ETF USD both have the same YTD performance of -6.5%. so are these both not hedged and just denominated in different currencies? 

Looks like I got the wrong number. Sorry

No worries, thanks for comment. I guess that all these I'm down 10% this year' comments we see from UK based people includes the GBP v USD benefit this year.  Or does it? Would you have only seen this fx benefit if you used GBP hedged funds?

You won't find many hedged equity funds. Global equity funds are currently down around 9% for the year in GBP terms. That takes into account the fact that the dollar is up around 10% and the Euro about 4%. Meanwhile the Pound is up 7% vs the Yen. Overall that is probably a better result than if using a hedged fund - should you be able to find one.

Albermarle

Prism said:

Cus said:

Deleted_User said:

Cus said:

Thanks to all replies, but the reason I am confused is that if the above mentioned vanguard etf is not GBP hedged, then why is it down 6.5% YTD, rather than 1.5% as per @Deleted_User indicated? 

Edit 

To add, the Vanguard FTSE All World  UCITS ETF GBP and the Vanguard FTSE All World  UCITS ETF USD both have the same YTD performance of -6.5%. so are these both not hedged and just denominated in different currencies? 

Looks like I got the wrong number. Sorry

No worries, thanks for comment. I guess that all these I'm down 10% this year' comments we see from UK based people includes the GBP v USD benefit this year.  Or does it? Would you have only seen this fx benefit if you used GBP hedged funds?

You won't find many hedged equity funds. Global equity funds are currently down around 9% for the year in GBP terms. That takes into account the fact that the dollar is up around 10% and the Euro about 4%. Meanwhile the Pound is up 7% vs the Yen. Overall that is probably a better result than if using a hedged fund - should you be able to find one.

You are right that using a hedged fund would not have worked out overall this year. However using one since the Pound started improving in October would have worked ( hindsight being a wonderful thing of course) This is one.
Fidelity Index US Fund P GBP Accumulation Hedged Key Statistics | GB00BHQSS241 | Fidelity