Vanguard S&P 500 ETF and US equity index fund whats the difference?

richie2

Hi,
In my ISA I’m moving away from UK based equities, which , like the UK are not doing so well, (odd that! ) and moving  towards North America so Vanguard offer these two funds. I can’t see how they differ as the descriptions are a bit vague . Do they overlap? There’s a difference in their performance but not a large one.

gravel_2

The Vanguard pages for each of these funds tells you the difference.

ColdIron

Broadly about 3,100 companies

U.S. Equity Index Fund
Number of stocks: As at date 31 Mar 2024 3,603 Stocks

• The Fund seeks to track the performance of the Standard and Poor’s Total Market Index (the “Index”).
• The Index is comprised of large, mid, small and micro-sized company shares in the US

dunstonh

In my ISA I’m moving away from UK based equities, which, like the UK are not doing so well, (odd that! ) and moving  towards North America 

Don't be hasty.     In the first decade of the millennium, US equity underperformed.  In this cycle, it has been the standout area.   However, in the last 3 months, UK equity has outperformed US equity.   The UK is viewed as an undervalued market.      

Now 3 months could be a false dawn or it could be a change in fashionable industry sectors or just a blip.    

If you have home bias, then some realignment makes sense but if you are doing this solely on the basis of past performance and not for structural reasons, then you may wish to reconsider what you are doing.

Vanguard S&P 500 ETF and US equity index fund whats the difference?

One is an ETF and the other is an OEIC.  Neither is suitable for meeting a North American allocation by themselves as they are both US equity funds and not North American funds.     They have different benchmarks. 

Albermarle

richie2 said:

Hi,
In my ISA I’m moving away from UK based equities, which , like the UK are not doing so well, (odd that! ) and moving  towards North America so Vanguard offer these two funds. I can’t see how they differ as the descriptions are a bit vague . Do they overlap? There’s a difference in their performance but not a large one.

The fact that the UK stock market has underperformed is not really that linked to the UK economic performance.
It is more down to the type of companies listed on the market, which has struggled to attract the newer growth stocks. 
For example Germany's economic performance has also been a bit lacklustre in recent year but their stock market is up 13 % in that last year.
In fact you do not mention Europe or Japan/Far East in your post. What about these areas.
As per the previous post you maybe should have decided on this move at any time in the last 10 years, rather than just now.

richie2

Thanks all. Clearly I’m needing to get up to speed on all of these very important  considerations. I’ve found better info than I at first read on the Vanguard site, and I’ll re read all of this in the context of these forum comments. I have a lot to learn here I think. Trouble is, it takes a lot of time and effort to sift through everything and make a judgement. But these comments are very helpful as they offer a way to focus on the issues rather than me trying to do it by myself as a complete novice. So thanks again for taking the time to answer me, I’m impressed!

Hoenir

richie2 said:

In my ISA I’m moving away from UK based equities, which , like the UK are not doing so well, (odd that! ) and moving  towards North America 

Markets are the not real economy. They gyrate above and below depending on the general mood of postivity or negativity. Investors move like a herd (behavioural finance).  The reassurance of safety in numbers. Just like a herd. When they are spooked. There's a stampede for the exits.  Resulting in higher levels of volatility. 

badger09

@richie2
If you’re a complete novice, may I ask why you’re looking at single area investing? Or are you trying to build a portfolio covering all geographical areas?
Have you considered Global equity funds? Or Global multi asset funds? 

Beddie

badger09 said:

@richie2
If you’re a complete novice, may I ask why you’re looking at single area investing? Or are you trying to build a portfolio covering all geographical areas?
Have you considered Global equity funds? Or Global multi asset funds? 

I totally agree with this. Don't try to be cleverer than the market, it rarely works out. Buy something like one of the HSBC global strategy funds or a global equity fund, depending on the risk you want to take, and relax!