Any good lower cost alternatives to VWRD and VHYL?

isayhello

I currently have these 2 global funds, they have charges of 0.22 and 0.29, I wondered if there are other global funds with lower charges that anyone might recommend. Both of these funds seem ok so far for me but I know as the size of the investment goes up, lowering charges becomes important so would like to see if there are some good alternatives.

I also have the Vanguard Life strategy 100 which is 0.22.

Thanks

masonic

There are quite a few cheap ETFs to consider. For example, PRWU, which tracks an unusual developed world index including mid-caps and charges an impressive 0.05%, VEVE which uses the more conventional FTSE Developed World index and charges 0.12% (I have in the past held this as my main holding), and SWLD which is based on MSCI World (again developed only) also at 0.12%. Buying a developed world rather than all-world ETF can be quite a bit cheaper. You can add in some emerging markets exposure with a second ETF for a lower overall cost than if you bought an all-world ETF. Cheapest all-world fund I'm aware of is the HSBC FTSE All World Index fund at 0.13% (my workplace pension is 100% this as I don't pay extra platform fees for funds), or if you need an ETF, the rather new FWRG at 0.15% (I'd probably go for this if I was picking a neutral global portfolio today).

isayhello

masonic said:

There are quite a few cheap ETFs to consider. For example, PRWU, which tracks an unusual developed world index including mid-caps and charges an impressive 0.05%, VEVE which uses the more conventional FTSE Developed World index and charges 0.12% (I have in the past held this as my main holding), and SWLD which is based on MSCI World (again developed only) also at 0.12%. Buying a developed world rather than all-world ETF can be quite a bit cheaper. You can add in some emerging markets exposure with a second ETF for a lower overall cost than if you bought an all-world ETF. Cheapest all-world fund I'm aware of is the HSBC FTSE All World Index fund at 0.13% (my workplace pension is 100% this as I don't pay extra platform fees for funds), or if you need an ETF, the rather new FWRG at 0.15% (I'd probably go for this if I was picking a neutral global portfolio today).

Thanks, I'll research some of those, as I've got 3 quite broad vanguard funds I've mentioned, I think I might be able to simplify down to 1 or 2 cheaper funds. I've also got the sp500 but I will probably leave those as they're quite cheap already.

hallmark

IMO a substantial factor in how important fund charges are is age, although I don't see that mentioned often.

If you're setting up a SIPP for your newborn, then charges are extremely important and you really want to shop around.

OTOH if you're 100 years old & stumbled across the notion of investing yesterday then not so much.

Anyway, I'm being a bit frivolous but I do think this is an under-discussed point.

masonic

hallmark said:

IMO a substantial factor in how important fund charges are is age, although I don't see that mentioned often.

If you're setting up a SIPP for your newborn, then charges are extremely important and you really want to shop around.

OTOH if you're 100 years old & stumbled across the notion of investing yesterday then not so much.

Anyway, I'm being a bit frivolous but I do think this is an under-discussed point.

The main attraction is that it is something an investor can control, unlike returns. But some nuance is needed, for example switching from one ETF to another for a 0.01% reduction in ongoing costs could be a false economy if you have to pay two trading fees and incur bid-offer spread on both transactions as that could add up to more than several years cost savings.

ColdIron

VHYL is an All World High Yield tracker that might be used for income while VWRD is growth oriented, I'm not why you would use both unless you have different objectives for each

You could look at VHVG instead of VWRD. It's a GBP Developed World tracker with a 0.12% OCF. It's the accumulating version of VEVE

hallmark

masonic said:

hallmark said:

IMO a substantial factor in how important fund charges are is age, although I don't see that mentioned often.

If you're setting up a SIPP for your newborn, then charges are extremely important and you really want to shop around.

OTOH if you're 100 years old & stumbled across the notion of investing yesterday then not so much.

Anyway, I'm being a bit frivolous but I do think this is an under-discussed point.

The main attraction is that it is something an investor can control, unlike returns. But some nuance is needed, for example switching from one ETF to another for a 0.01% reduction in ongoing costs could be a false economy if you have to pay two trading fees and incur bid-offer spread on both transactions as that could add up to more than several years cost savings.

I do wonder if it's now so fashionable to try to reduce costs to zero that it's leading people to focus on that too much. Obviously it is important but so are other considerations.

qbadger

Try to use your SIPP to hold the SP500 ETF. If that's not possible, change to a swap-based one to avoid US WHT.

noclaf

VEVE was my largest holding till a few months back...a cheap well established ETF and reasonably good performance (subjective). I also used HMWO in another investment wrapper. Can't go wrong with either for Global Equity ETF's (Developed markets) but there are various others e.g SWDA, LGGG, VWRL,VWRP..and so on. I use SWLD in my S&SISA as wanted an accumulating ETF.

Ongoing fund/etf and platform costs are important however in a slight change of approach I am 'experimenting' with an active Global ETF in my SIPP and whilst the ETF fees are higher (double at 0.25% Vs 0.12% for VEVE or SWLD for example) am hoping the performance will be better ....only time will tell.

Within reason ongoing fees should be minimised to the extent possible.

As Masonic suggested above, you can combine a EM ETF should you wish alongside any of the Dev World ETF's though tend to have higher fees....0.1-0.15% additional fees maybe negligible impact overall. 

masonic

qbadger said:

Try to use your SIPP to hold the SP500 ETF. If that's not possible, change to a swap-based one to avoid US WHT.

It's not quite as simple as that... https://monevator.com/etfs-and-the-peculiar-effects-of-withholding-tax/

FlimFlam01

ColdIron said:

VHYL is an All World High Yield tracker that might be used for income while VWRD is growth oriented, I'm not why you would use both unless you have different objectives for each

You could look at VHVG instead of VWRD. It's a GBP Developed World tracker with a 0.12% OCF. It's the accumulating version of VEVE

VHVG is what I recently put my money into from very similar vanguard funds that had a much higher charge.