Why do people with the knowledge seem to invest more in ETFs?

kokolino23

https://forums.moneysavingexpert.com/discussion/comment/82102601#Comment_82102601

On T212 or another platform? Thanks

Kaizen917

Im still quite surprised how OEICs ended up being cheaper at Barclays.

Personally, I got both thanks to the fairly recent change of being able to have multiple ISAs in a year. That way, I ended up investing depending on whats cheaper/convenient on platforms.

There is a chance that some asset manager (Vanguard or otherwise) pushes the ETF market with lower cost which will tilt things in favour of these. At this point though, both OEICs and ETFs can be very much viable.

Albermarle

It is worth noting that the variety of OEICS that are available, is far larger than the number of ETFs available.

So far at least in UK if you just want a standard multi asset fund, and not buy the individual parts separately, then it has got be an OEIC. Also all pension default funds are OEICs

LHW99

Perosnally I prefer OEIC with Barclays for free (recent change) and ETFs
with IG in the meantime waiting for ISA allowance but in early days I
liked knowing how much something is worth rather than selling it and
finding out next day it's £200 down :)

Although ITs, mentioned above, are also priced at the buying point, as they are traded as a share, and IMO can be easier to understand than some ETF structures can be.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82103843#Comment_82103843

can be easier to understand than some ETF structures can be.

I am sure that the vast majority of retail ETF investors, have not the faintest idea about what ETF's really are and the mechanisms behind them. It is actually quite complicated as you say.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82104052#Comment_82104052

Indeed, I take care to avoid synthetic etfs in favour of those that directly replicate by holding the actual underlying assets.

Don't want to take the risks of the counterparty behind the derivative and swap contracts going belly up.

LHW99

https://forums.moneysavingexpert.com/discussion/comment/82104052#Comment_82104052

At the point I found that I couldn't find out much about with profits funds, which back in the day used to be sold fairly hard, I decided to only invest in things I could understand. Consequently, although there is one ETF in the family portfolio (~5% of total), the rest remains in ITs / OIECs which I have some grasp of the mechanisms of.

B0bbyEwing

https://forums.moneysavingexpert.com/discussion/comment/82102900#Comment_82102900

Is it worth it though?

Fretting over whether putting your money in at 10am or 3pm, whether it's best going in on the 1st of the month, the 12th, the 20th, 28th etc.

And whatever you choose out of all of those combinations, what makes that one the golden choice? What if you'd waited, what if you'd put your money in sooner?

Each to their own. I just think get your money in & move on.

noclaf

I only use OEICs in my work pension (as that's all they offer!), all other accounts use ETF's albeit none are synthetic and it's purely due to the cap some platforms offer for using ETF's. It's definitely not related to my additional knowledge :).

I would happily use OEICs if the platform fees model worked to my favour. Ive always complained that the range of ETFs offered to retail investors is poor compared to OEICs maybe as it's a more recent developing sector?

I just hope that the significant uptake in ETF investing isn't creating any additional problems in the future that are lurking in the background....hopefully not the case but am always wary given the complexities mentioned above that as investors we do not see or understand fully.

GeoffTF

https://forums.moneysavingexpert.com/discussion/comment/82105643#Comment_82105643

I just hope that the significant uptake in ETF investing isn't creating
any additional problems in the future that are lurking in the
background....hopefully not the case but am always wary given the
complexities mentioned above that as investors we do not see or
understand fully.

It is actually the other way round. ETFs are more transparent than OEICs. If you buy units in an OEIC on a day when there is an excess of units bought, the fund manager is likely to increase the price to make sure that the cost of creating the new units is not born by the existing unit holders. The is no disclosure of what is going on there. The same mechanism is used if there is an excess of units sold.