Any good lower cost alternatives to VWRD and VHYL?

GeoffTF

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

VWRD is a whole market tracker. It contains both the growth stocks and the value stocks. VHYL contains only the higher yielding stocks which will tend to have lower valuations. It is much less well diversified than VWRD. I agree that there is little point in including it. As others have said, it is cheaper to use a developed world tracker along with an emerging markets tracker. (Emerging markets are about 10% of the global market.)

Hoenir

Always read the KIID (Key Investor Information Document). Headline %'s on ETF's only tell part of the story. The real cost of trading can be far higher in reality.  

qbadger

masonic said:

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/

So any SIPP platforms still don't recover the additional 15% WHT? I assumed that all the "top-10" ones now do, but happy to stand corrected.

isayhello

noclaf said:

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. 

@noclaf does the active approach you've taken involve some manager who will make adjustments to the portfolio if they think it's needed? and if they're doing it, then there are no extra trading charges for you if they buy or sell different assets inside the fund?

Hoenir

qbadger said:

masonic said:

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/

So any SIPP platforms still don't recover the additional 15% WHT? I assumed that all the "top-10" ones now do, but happy to stand corrected.

What's the additional 15% ? 

qbadger

I'm simply using the same phrasing as the article that was linked.

noclaf

isayhello said:
. 

@noclaf does the active approach you've taken involve some manager who will make adjustments to the portfolio if they think it's needed? and if they're doing it, then there are no extra trading charges for you if they buy or sell different assets inside the fund?

I assume it's pretty much that, managers will try to tweak where they deem appropriate for active ETF's or funds*.

*I am fully aware that what happened in the past may not repeat i.e: the passive ETF's could outperform the comparable active options over another period and same applies whether it's funds or ETF's..

Re. additional charges not aware of any but that will vary between different etf's and funds.

JohnWinder

then there are no extra trading charges for you if they buy or sell different assets inside the fund?

...I assume it's pretty much that

There are usually broker charges for trading on an exchange, and usually a buy/sell spread which is a further cost. Who do we imagine would bear those costs other than the investor? Or do those 'frictional' loses come out of the fund manager's salary?

masonic

qbadger said:

masonic said:

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/

So any SIPP platforms still don't recover the additional 15% WHT? I assumed that all the "top-10" ones now do, but happy to stand corrected.

I'm not aware of any that do. When you hold one of the popular UK-listed, Ireland domiciled ETFs like VUSA or CSP1 (or indeed a global ETF investing in 60% US shares), then it is that Irish investment company that is seen as the beneficiary of any US dividends, so the US withholding agent doesn't see it as a qualifying pension scheme for relief of the full 30% WHT, the Irish investment company qualifies for a reduction to 15% WHT via the Ireland-USA double taxation treaty and pays the other 15% WHT within the ETF before accumulating or distributing the income as a foreign dividend from Ireland to its UK investors, which are nominees from pension schemes, S&S ISA providers and trading accounts. These downstream custodians, and you, the beneficial owner of the shares, are not the payers of the WHT, but have had exposure to it due to the Irish investment company having to pay it.

I've held a SIPP with AJ Bell and Fidelity in which I've held CSP1, and neither credited me with any tax reclaims during my holding period. I didn't think a tax reclaim would be possible, as it generally isn't possible to reclaim tax incurred by a different entity - from the US government's perspective, the pension scheme hasn't paid any tax. There was a recent thread about iWeb where it was revealed it doesn't even register for zero rate WHT for US-listed securities held within their SIPP (see this post). Personally, I just accept and take the 0.2-0.3% hit on annual performance, rather than go to the trouble of buying a US-listed ETF (tricky now due to PRIIPs regulations) or take on the additional counterparty risk of a synthetic ETF.

noclaf

JohnWinder said:

then there are no extra trading charges for you if they buy or sell different assets inside the fund?

...I assume it's pretty much that

There are usually broker charges for trading on an exchange, and usually a buy/sell spread which is a further cost. Who do we imagine would bear those costs other than the investor? Or do those 'frictional' loses come out of the fund manager's salary?

In the case of the ETF I am referring to, having checked the KIID and annual report it only mentions the ongoing charge, 0 entry/exit fees and a 'maximum TER' of 0.25%. There is also an expense section that includes the following: The above fees and expenses will not exceed the relevant Total Expense Ratio (“TER”) described in the Prospectus. The actual fees and expenses charged to

each share class are detailed in Appendix 2 to this report. If expenses exceed the TER in relation to operating the funds, the Management Company will cover

any shortfall from its own assets.