Vanguard FTSE Global All Cap Index versus VWRP

junebaby

Looking to add to this year’s ISA and am trying to decide between the above funds. 

I want something that I can invest in and forget. 

Any thoughts appreciated. 

Linton

The key difference is that the All Cap fund contains about 5% small companies whereas VWRP is only large and medium. Otherwise the investments are much the same. The charges are much the same.  The All Cap fund has had a slighly higher performance over the past 3 years and is slightly more volatile, both of which are as expected bearing in mind the difference in small companies. VWRP has only been around for 3-4 years so there is no long term comparison.   Either could be bought and then forgotten.

Perhaps that just leaves a matter of principle, all other things being equal the broader the diversification the better which would point to the All Cap fund.  But there is no point in spending ages agonising about which to choose.

ColdIron

VWRP is an EFT while the All Cap is an OEIC, there could be a transaction/custody charge difference for you, in an earlier thread you say you have a SIPP with HL

junebaby

I have just sold single shares - I know I Know - which were in a ISA with IWeb. This money is sitting in the ISA as cash waiting to be reinvested. 

Easyjet77

junpebaby said:

Looking to add to this year’s ISA and am trying to decide between the above funds. 

I want something that I can invest in and forget. 

Any thoughts appreciated. 

Very insignificant differences.  Either is suitable to invest and leave alone. However some people would be back here in a week claiming one has gained 5 pence more than the other, should I sell! 
      Regatds

badger09

ColdIron said:

VWRP is an EFT while the All Cap is an OEIC, there could be a transaction/custody charge difference for you, in an earlier thread you say you have a SIPP with HL

Depending on the size of the proposed investment & assuming it is in a SIPP with HL, the platform charge would be limited to £200 pa if OP chose VWRP. Platform cost shouldn’t be the driving factor, but neither should it be ignored if all else is comparable. 

Albermarle

badger09 said:

ColdIron said:

VWRP is an EFT while the All Cap is an OEIC, there could be a transaction/custody charge difference for you, in an earlier thread you say you have a SIPP with HL

Depending on the size of the proposed investment & assuming it is in a SIPP with HL, the platform charge would be limited to £200 pa if OP chose VWRP. Platform cost shouldn’t be the driving factor, but neither should it be ignored if all else is comparable. 

The OP is adding to an ISA, so the capped charge for ETF's is only £45.

IanManc

junebaby said:

I have just sold single shares - I know I Know - which were in a ISA with IWeb. This money is sitting in the ISA as cash waiting to be reinvested. 

Seeing the money is in an ISA with Iweb there will only be transaction charges of £5 per trade for either investment, and no annual custody charges if you stay with Iweb.

The OCF for VWRP is .22% and for the Global All Cap is .23%, so an insignificant difference.

There are negligible differences in the geographic spread of investments, e.g. VWRP is 62.2% invested in the USA, 6.3% in Japan and 3.6% in the UK; while the All Cap respective figures are 62.2%, 6.2% and 3.6%.

The main difference is that VWRP invests in 3665 companies worldwide and All Cap invests in 7060 companies (31 March 2024 figures) because All Cap invests in small cap companies worldwide as well as large and mid-cap, which VWRP does not. 

Consequently this slightly alters the makeup of the investments in terms of sector, so VWRP is 26.2% invested in technology, 14.5% financials, and 13.3% industrials; while the All Cap respective figures are 25%, 14.4% and 14.2%.

The difference also shows in the level of investments in the world's largest companies. So VWRP invests 4.19% in Microsoft and 3.35% in Apple; while All Cap invests 3.66% in Microsoft and 2.93% in Apple.

VWRP has only been around for 4 years and 9 months so 5 year comparisons are not yet available, but over the last year their performance has been the same and they have basically just tracked each other exactly. Over 3 years VWRP is ahead by a tiny margin, but that is because of the slight skewing towards US technology which did well 1 to 3 years ago - and no one knows if that will be repeated. It certainly hasn't been in the last 12 months.

VWRP is domiciled in Ireland and All Cap in the UK. Both are good, well diversified equity investments.

JohnWinder

We can try to quantify the anticipated small difference in returns of those two funds. Over the last 50 years US small cap has returned about 0.3%/year more than other US stocks, on average without a lot of variation. So by choosing the fund with small cap in it you might anticipate returns  to be better on average by about a twentieth of 0.3%, because only about 5% of one of those funds is small cap. That's 0.015%/year difference in returns between the two funds.  

Linton

JohnWinder said:

We can try to quantify the anticipated small difference in returns of those two funds. Over the last 50 years US small cap has returned about 0.3%/year more than other US stocks, on average without a lot of variation. So by choosing the fund with small cap in it you might anticipate returns  to be better on average by about a twentieth of 0.3%, because only about 5% of one of those funds is small cap. That's 0.015%/year difference in returns between the two funds.  

Yes, though I have seen people get excited about a 0.015% difference in charges, so perhaps not to be ignored.

JohnWinder

Probably me, so guilty as charged; but not sure I've ever stooped that low.