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Vanguard FTSE Global All Cap in ISA switch to ETF version?
Comments
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I am somewhat doubtful about the importance people put on charges:
The HSBC fund (despite its name) is an OEIC with an OCF of 0.15. The Invesco fund is an ETF with an OCF of 0.05. As you see the OEIC is marginally better performing. Other factors, including platform costs, ability of the fund to actually track the index, bid/offer spreads, and luck with timing may outweigh any benefit from transferring.
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I have not been clear. The lower cost fund usually discussed by the YouTubers is VWRP which has an OCF of 0.14% which is lower cost than the Global All Cap OEIC at 0.23%. A saving of 7 bp versus 16 bp, less than half as much.
VALL was trading a big premium to NAV but the latest number is 0.8% according to TradingView, which is not much different to the premium for VWRP. It looks as though the cost of trading is now about the same as the spread, which has been as high as 0.3%. VALL had an AUM over £200 million when I last looked at it. The situation has changed very quickly.
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It is relatively easy to assess the costs of switching between the Global All Cap OEIC and the ETF version. Once the ETF version has a reasonable amount of history as a reasonably sized fund, we can easily find historical values for:
- The ETF closing price on the LSE.
- The NAV at its pricing point which is 9.00 pm London time.
- The GBP/USD exchange rate at 9:00 pm London time.
- The price at 9:00 pm London Time for the OEIC.
We can then calculate the amount that we would have gained or lost by buying the ETF rather than the OEIC. That gain or loss does not take account of the spread, but we can assess that separately. We can do that for a large number of days and plot a histogram. We can do the same for splitting the trade into n equal pieces.
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Are you sure the fees (or at least the gap) have been the same over the last 10 years? Quite a number of ETFs have been involved in a price war that have seen fees drop considerably over the last year. For example, I know State Street was uncompetitive until recently, but its ACWI ETF is now one of the best.
Also, are you sure you are not mixing up the HSBC ETF tracking MSCI World "HMWO" ( or ) with the OEIC tracking FTSE All-World ( )? I don't think HSBC has an OEIC tracking the developed world index.
As a really old example, I held HSBC American Index back when it charged a 1% AMC, now 0.04% AMC/0.07% OCF.
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Could someone explain why some funds have transaction costs - the cost of buying and selling holdings - and some have none? This example is from Monevator's list of low cost world income equity funds:
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Did his dedicated article on the subject not enlighten you sufficiently? ;)
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You cannot compare the transaction cost quoted by different fund managers, because they calculate them differently. Hopefully, Vanguard is consistent. Nonetheless, Vanguard's numbers can change a lot. Vanguard was showing a big transaction costs for its FTSE 100 Unit Trust, but it now shows as zero for example. Have the transaction costs really disappeared? It is hard work extracting the numbers from Vanguard's document. Tickers for the ETFs would be very helpful.
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I have had a look at the data that Vanguard gives for VALL on Friday. Vanguard gives the NAV to 3 significant figures only. That makes any accurate analysis impossible.
Swapping my VEVE for VALL should not give problems, but I will wait until after the budget before doing anything.
Swapping some of my Vanguard Developed Word ex UK for VSML is more problematic. I may have a longer wait before I am happy with that.
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I have found some better numbers for VALL:
https://www.lse.co.uk/SharePrice.html?shareprice=VALL&share=Vg-Ftse-Gac-A
That link gives the bid and offer prices to 5 significant figures.
I can get the NAV for VEVE to 7 significant figures by Google searching for "VEVE Regulatory News Service Net Asset Value 28 August". It actually found the number for 27 August. No luck with any accurate NAV for VALL though.
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It does not unfortunately, I had already checked that:
I looked at the institutional site too, but you seem to need a login to access that. I expect that accurate daily NAV values will show up eventually. I expect that it is search issue.
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