Which Vanguard fund
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Have never been a fan of passive Tracker funds because you end-up effectively holding stock in some pretty useless Companies which are only there because of their size not because of their forward looking trading stability. Active funds on the other hand should be slightly better at avoiding future impending bubbles if managed properly.bowlhead99 wrote: »How long Vanguard's tracker fund has been 'trading' is largely irrelevant. The tracker fund has proved in its year of existence that it is capable of closely following the index, which is not surprising given that Vanguard's other index tracker funds also track their respective indices quite succesfully.
This still leaves the question of where to put the other half of the Vanguard funds. Already exposed enough elsewhere to UK Equities so looking to spread the investment wider.0 -
RomfordNavy wrote: »Have never been a fan of passive Tracker funds because you end-up effectively holding stock in some pretty useless Companies which are only there because of their size not because of their forward looking trading stability. Active funds on the other hand should be slightly better at avoiding future impending bubbles if managed properly.
This still leaves the question of where to put the other half of the Vanguard funds. Already exposed enough elsewhere to UK Equities so looking to spread the investment wider.
Without understanding the rest of your portfolio or you goals no one can answer your question sensibly. You seem to have some considered opinions about investing and the funds you like so I think you are by far the best person to choose the right Vanguard fund.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
RomfordNavy wrote: »Active funds on the other hand should be slightly better at avoiding future impending bubbles if managed properly.
This still leaves the question of where to put the other half of the Vanguard funds. Already exposed enough elsewhere to UK Equities so looking to spread the investment wider.
Well, you say you have never been a fan of passive tracker funds because active funds should be better at navigating the waters if they are managed properly...
But then you decide to put a bunch of money with Vanguard, who are most famous for their passive funds.
And within that bunch of money you then splat half of it into a fund that invests with a goal of cheaply investing via filters and quant formulae (rather than via active manual decision-making) to track the result of their algorithms (effectively a proprietary specialist index, albeit not cap-weighted)
And now you are looking to deploy the second chunk of money with Vanguard and all you are giving us to go on is that you feel you have enough UK equities and don't like index funds but do like Vanguard and quite like smaller companies.
So, we can't really say what one product is best for you, not least because you haven't told us how this fits into your overall portfolio/ wealth, or what the clear objective is, how you really feel about risk/volatility, and why you decided to spend the first half of the Vanguard money the way you did - other than, I presume, just liking the look of it more than you liked the other things they have for sale.
From what you've told us, you have limited options if you want Vanguard but don't like indexes:
They have an active global equity fund and an active global equity income fund, but those have about 7% and 9% allocated to UK listed companies and you said you already have enough UK exposure.
They have an actively managed global balanced fund which has the UK allocation a little lower at 5%; but it has 35% bonds (because it is giving you a balance of debt and equity, unlike the other two funds mentioned above and the one you already bought) so maybe you don't want that.
Then there's an active emerging markets equity fund and a global active bond fund, and that's pretty much all the active choices from Vanguard UK - apart from the momentum factor / value factor / minimum volatility ETFs, and it's arguable how 'active' they really are, being run by computer and having OCFs of 0.2% ish.0 -
RomfordNavy wrote: »Have never been a fan of passive Tracker funds because you end-up effectively holding stock in some pretty useless Companies which are only there because of their size not because of their forward looking trading stability. Active funds on the other hand should be slightly better at avoiding future impending bubbles if managed properly.
But doesn't research show that over the long-term (i.e. more than 10 years) most active funds underperform their relevant index? How are you going to identify the ones that don't?0 -
But doesn't research show that over the long-term (i.e. more than 10 years) most active funds underperform their relevant index? How are you going to identify the ones that don't?
It seems to very much depend on the sector. If you take UK all companies for example and have a look at the 10yr performance on Trustnet there are some interesting stats.- There are 189 funds that have been around for 10 years
- The best performing 111 funds are all active funds
- The 112th place fund is iShares UK equity tracker which pretty much hits the index
- All 23 passive trackers are amongst the 77 worse performing funds
- The 158th place fund is Halifax UK equity tracker
Of course there are some active funds that have been retired during that time too however you could argue that a randomly selected active fund 10 years ago would likely have beaten a randomly selected passive fund. (I certainly don't select randomly).
I am suprised at the variation in passive performance when tracking the same index (FTSE All Share). My wife's pension uses SSga for passive trackers and these always seems to underperform over the long run.0 -
It seems to very much depend on the sector. If you take UK all companies for example and have a look at the 10yr performance on Trustnet there are some interesting stats.
- There are 189 funds that have been around for 10 years
- The best performing 111 funds are all active funds
- The 112th place fund is iShares UK equity tracker which pretty much hits the index
- All 23 passive trackers are amongst the 77 worse performing funds
- The 158th place fund is Halifax UK equity tracker
Of course there are some active funds that have been retired during that time too however you could argue that a randomly selected active fund 10 years ago would likely have beaten a randomly selected passive fund. (I certainly don't select randomly).
I am suprised at the variation in passive performance when tracking the same index (FTSE All Share). My wife's pension uses SSga for passive trackers and these always seems to underperform over the long run.
If you go on Morningstar for UK Large Cap Blend Equity there's over 400 with 10 year annualised data. L&G's FTSE All-Share Tracker comes in at 91 so it's beaten over 3/4 of other funds.
If you go to US Large Cap Blend Equity there's over 200 with 10 year data - S&P 500 Index trackers are in the top 20.
For Global Large Cap Equity there's over 400 - with the only tracker that's been around that long (L&G International) in about 70th position.0 -
Thats kind of the point - active managers are not constrained to UK Equity Large cap blend. They can go value, growth, large, mid or flex cap - and change between these at will within their own fund constraints. To fully compare you also need to include those categories. Flex cap in particular has a strong performance and thats where you find many of the well known active funds.If you go on Morningstar for UK Large Cap Blend Equity there's over 400 with 10 year annualised data. L&G's FTSE All-Share Tracker comes in at 91 so it's beaten over 3/4 of other funds.
Also, that L&G fund is not a UK tracker - its global
I think that Morningstar has too many categories to be honest for no great benefit. Makes it hard to do proper comparisions (unless I'm missing a tool somewhere). I also don't like the way it breaks out all of the classes for each fundIf you go to US Large Cap Blend Equity there's over 200 with 10 year data - S&P 500 Index trackers are in the top 20.
For Global Large Cap Equity there's over 400 - with the only tracker that's been around that long (L&G International) in about 70th position.
I did say it depends on the sector. US and global (mainly because of the 50% US influence) are generally better passive.0 -
It's down to one of the following four:
- Global Balanced (Active)
Risk: 4
OCF: 0.6%
Last year: 6.95%
Previous year: 11.44% - Global Emerging Markets (Active)
Risk: 6
OCF: 0.8%
Last year: 4.01%
Previous year: 32.15% - Global Momentum Factor (Active)
Risk: 4
OCF: 0.22%
Last year: 16.90%
Previous year: 12.93% - Global Equity (Active)
Risk: 5
OCF: 0.6%
Last year: 10.81%
Previous year: 24.39%
0 - Global Balanced (Active)
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The OP seems to have preconceptions about where to invest.
We don't know the investment timeframe,
We don't know the aims.
We don't know the attitude to risk.
We DO know that the investment world begins and ends with Vanguard.
Vanguard (as has already been mentioned) is a passive specialist. Why on earth choose them over (say) Fundsmith or Lindsell Train for a core actively managed global beats me.
OP: if you are going the active route then you need to focus on the quality of the fund manager.0 -
RomfordNavy wrote: »It's down to one of the following four:
It doesn't really make sense for it to be down to those four though. They don't really have common characteristics in a way that you would naturally come down to those as the last four out of an initial choice of 2000+ funds when targeting a set of criteria.
The only way someone would get there is by arbitrarily deciding a) that their investment must be managed by vanguard and b) that they don't like the traditional index funds on which vanguard built their reputation, and then c) just look at a short menu of what else they have for sale and think, hmm there's these ones that I reckon might be any good, and they are all wildly different, I'll ask some anonymous strangers who don't know me to tell me which one is best for me.
That type of investment selection strategy is, for want of a better word, [censored]
If those are the only four funds you are willing to buy, then it probably makes sense to go for either the global equity fund or the global balanced fund. The latter would be more in line with what the 'average' investor might buy because it has a mix of asset classes rather than just being all equities - but if you already have enough non-equity investments within your overall portfolio then perhaps the global equity one could be ok.
Of the other two:
- if you're trying to build a balanced portfolio it doesn't really make sense to put half the money into the specialist 'emerging markets' fund which deliberately ignores the $40 trillion or more of value of companies available for sale on developed stock markets.
- you haven't given any rationale for buying the momentum find which only focuses on certain types of company based on their price movements - you've already told us you don't like buying traditional index trackers because they pick stocks based on some arbitrary reason like "they are only there because of their size", so it wouldn't make sense to use a different set of arbitrary criteria like momentum score (they are only there because of the way their price moved recently).
So really from what you have told us about what you are doing and your tastes and preferences, you should only be looking at the active global equity fund (if you feel you already have enough 'non-equities' investments) or the active global balanced fund (if you don't). I haven't bought either of them so I can't tell you why I chose them over their direct competitors from vanguard or other managers, because I didn't.0
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