Vanguard UK Release New Funds & Why I’ve Changed My Portfolio
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- Опубліковано 20 тра 2024
- Vanguard in the UK has just made thirty of its accumulation ETFs available on its platform. While it didn’t make a big song and dance about it (well this is Vanguard after all!) I think this makes its UK offering more attractive because it now covers the basics very well. I have also changed my own portfolio as a result of them adding these funds and at the end of this video I show you what I have done and discuss my reasons behind it.
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Timestamps
00:00 Introduction
00:35 Kitchen Cupboard Essentials For Investing
05:24 Accumulation vs Income
08:04 Vanguard's 30 Accumulation ETFs
12:12 What Still Needs to Change
13:46 My Core Portfolio
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Questions on the accumulation and distributing funds (VWRP and VWRL), is the VWRL black line based on how the fund grows, without reinvesting?
Or is it taking into account reinvestment, but only on the quarterly basis it is paid?
I currently hold VWRL and VEVE, and want to work out if its worth changing over.
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@@fuwaking001is true
Funnily enough, I have just swapped my Vanguard fund from Distribution to accumulation. I did note that there wasn't much in the way of money in the fund but I am sure that will grow as soon as other see the offerings.
Excellent video and very well thought out as always! Personally though, choosing a developed market only is moving away from the point of picking a global index tracker fund - investing in all of the markets and not making a bet on which you think will perform best. Excluding EM is making that bet from my point of view. The savings in fees will be much greater impact over time by moving to a provider that has lower platform fees.
Thank you. With the FTSE Developed World UCITS ETF you have chose, what impact on returns will the fact it trades in USD rather than GBP have? Will this erode the 0.02% fee difference when compared to you previous fund choice? Thanks.
VHVG for me too! Thanks Ramin! 🙂
Hi Ramin, thanks for a great video as always. Sorry I’m not caught up recently, what are you doing to cover emerging markets in light of your change to the new fund not covering it? Do you have emerging funds elsewhere? Thanks!
Thanks for the video. It is very helpful! Could you please let me know how to switch in between funds? I currently have 'Income' version of the fund but after watching this video, I would like to switch it to 'Accumulation'.
Great vid and fantastic choice of your sole holding in Vanguard. The ftse developed world is the one I’ll also be rotating into once I feel the time is right. For now I’m sticking with Vanguards sustainability 80/90 which I went all in 2022 and it held up with slight gains whilst markets crashed 20% or more so it’s more than proved it’s .48 fee. It hasn’t had much of a run this year as it contains a lot of defensive health care/undervalued stocks. To say it’s equity heavy it’s very safe as proven in 2022 as undervalued stock out of everything was the only asset that held up even over gold that year. It’s paying us a nice 2.2 dividend end December. But going forward after what I believe I might be wrong due a good correction from the magnificent 7 then I’ll rotate back into pure equity indexing using the ftse developed world with its low .12 fee and 1.89% dividend payed quarterly. The markets got way ahead of itself and the time for putting large amounts of capital in indexing right now way too risky I believe in this current climate.
I transferred to vanguard a few months back and this makes it better.
This is very helpful thanks. When you are approaching or in retirement, why do you need bonds? Why couldn't you just cash in a little of your index fund say once a month for your living costs? (Assuming you have a cash cushion to use if the market is down).
Thanks Ramin. The bulk of my portfolio is with Vanguard UK. Pity that there Sterling Money Market Fund is income which i utilise.
I have to use HL to take advantage of an accumulation MMF. I will look at these “new” accumulation ETFs and de-risk some of my portfolio which has been on ice for 13 months whilst i looked to reinvest. Have tinkered with VJPN as i believe there is upside. Im 5 years from retirement, what would you suggest , bonds?
Hi Ramin, I currently have money invested into the FTSE Global All Cap on the vanguard platform in a SIPP. Is there a way to transfer that money into one of these new vanguard funds without having to sell them and reinvest it into a new fund or would it be a better idea to leave the money in the existing fund and simply start putting future investments into the new fund? Thank you, Jack
Hi Ramin - When selecting a fund is the TER as important as the historic tracking difference? If one fund exceeds the index but has a higher TER to another fund that falls short of the index is that not what’s most important? I have the vanguard ftse all world and am debating moving across to Invescos new offering.
I’ve been in the Global All Cap since end of 2020 and sticking with it.
I too have bought the FTSE Global All Cap fund for many years. I think swapping now would be a mistake as I have been buying those smaller companies and a slice of the emerging market held in the fund cheaper because of the Ukraine war etc. I think there is a good chance that the returns will catch back up when the Ukraine war ends. Also, I don't like the idea of chopping and changing to chase returns. My original decision is still sound.
@@barnstar2077
Exactly. You can start second guessing yourself with all of this.
Best advice is stick to your original plan. It was a toss up between VWRL and the Global All Cap for me. I wanted the extra exposure to emerging markets it gives.
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Ramin did you use the Switch option in the Vanguard interface to move from VVDVWE to VHVG. How long are you out of the market for using this approach? Thank you ... Andy
Great video as always! I invest each month into Vanguard S&S ISA & Vanguard SIPP, both payments are split between VUSA and VEVE as they're the most appealing when I ran the numbers & checked fees vs VWRL for example.
As of 11 March 2024 cheapest S&P500 ETF for UK investors is SPDR S&P500 UCITS Unhedged (Accum) Ticker: SPXL with ongoing charge/TER of 0.03%. Launched November 2023. 🙂👍🏻
You say that you now invest in only the one fund with Vanguard. Does that mean you invest in other funds with other providers? Thank you for the video. It is very helpful.
Brilliant video again. Quick Q, why have you not thought of adding the vanguard emerging market fund to your VHVG? Then you won’t have missed out on anything.
thanks for the video, it was just the prompt I needed to make changes to my investment isa with Vanguard. For the last 3 years I have been investing a regular sum of money into the vanguard 100 life strategy fund. The one thing that was bothering me about it was the heavy 25% it invested into the UK. This seemed too large considering we are not the 4th largest economy. Moreover, the UK economy has been pretty naff for a while, not helped I am sure by Brexit. I have now stopped my contribution to the 100 life strategy and changed to the one you reference on this video which seems a much better option, plus I have reduced my 0.22% charge to 0.12. thanks again. John
Same thinking about UK and "ex-UK" funds. However, a lot of a larger UK companies are really worldwide cos. The thing to avoid would then be less-than-large-cap (i.e. Brexisuicide-exposed) UK companies. Global/All-world funds will generally fit the bill pretty well. I have squillions in HSBC FTSE All-World Index Fund Accumulation C. OGC 0.13%... and apparently so does Ramin.
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Does that not make the UK an emerging market then?
Hi Ramin - Any chance of covering shorter term investments. I have retired and have a number of portfolios. I don't need the money for income, at the moment, but I don't have more than ten years in mind.
Or, should I just follow the advice here?
Thanks.
Hi there, thank you for the great videos! Isn't VHVG currency in USD?? Shouldn't you stick with FTSE Developed World ex-UK simply because it's in GBP? Or will the lower charge offset the exchange charges? Thanks
I struggle to find any additional allure of Vanguard funds compared to Ishares or Xtrackers, speaking from non UK, european investor perspective. Ishares seems much more liquid and less prone to fund closure. SWDA costs 0,2% and CSPX 0,07%, factor versions 0,2-0,3%.
Great Video Ramin. I've only been invested in the OEIC Dev World Ex-UK. Before you switched to the ETF giving 2 bips away in charges, did you consider the spread on the ETF which currently is 1.5 bips and could be wider during the day. Given such can you expand on this a little either with a reply to my comment or a short video update.
Thanks for your diligent work
So nice of you @raymondwedderburn168
Good video. Does it matter to the layman / passive investor that one you are moving from is an Index Fund & the one you are moving to is an ETF & what are the implications? Thanks.
Surely if you're in drawdown, you only declare in the SA return what you physically take as income out of the fund? If there is capital gain and income paid within the fund still in drawdown (or uncrystallised for that matter), that isn't declared in the SA return?
How can I extract the fund performance comparison on those 3 funds on excel?
where do you hold your gilts? can you recommend a platform?
Dear Ramin, Great Video. I noticed that the trading currency of this VHVG is USD whereas for the FTSE Developed World ex-UK the currency is GBP. What about the costs associated with currency conversion? Would that eat into the 0.02% of reduction of fee that you would be saving?
Good question
Nice video Ramin. The only thing that could be added to this video is to use example portfolio and show how much money investor would save by switching to funds with cheaper fees. Cutting 0.1% in fees does not sound as convincing as X number of pounds saved over time.
Hi @pistopit7142 that's a good way of explaining the difference in fees, thank you! Ramin.
@@PensioncraftHi Ramin, I have a question about switching? I'm invested in the Global Ftse All Cap accumulation, should I wait for the dividend date before switching or does it not make a difference as the value will lower as the dividends go out?
Moneymarket funds are not protected and not zero risk. I heard someone warning they would be vulnerable if there was a sudden move away from MMFs if interest rates dropped. Yellen I think.
They do have 0 risk of loss. But you might make essentially no money and might lose money against inflation. Which is a different form of risk.
The time to sell stocks and buy MM funds was in 2021. It's an overbought market now with a lot of downside risk as interest rates begin to normalize over time.
They do not have a zero risk of loss
If enough investors remove their money then the fund manager has to force sell the commercial paper / bond it has to pay investors back
Once the market sees this the value of those bonds goes down and hence the other investors in the fund lose money. It’s not possible to just hold until maturity in this case.
No, there will be nearly zero change in value if interest rates change. This is because they're ultra short term bonds (months) and considered functionally equivalent to cash. The yield paid out will drop however if rates drop. You saw the line increase, thinking it might decrease just as well, but that's wrong because it's an accumulation fund, meaning it automatically reinvests its interest payments.
I heard that only about 30% of liquidity in some money market funds. When interest rates fall which they will, might not go back to 0.50% but will fall, people will want out of these MM funds and there is a possibility that it might be hard to get all the cash out.
Well explained, thank you. I am new to investing and new to your channel
Glad it was helpful! @Probity100
Indeed. My Vanguard money market in the USA is paying 5.3%. I will retire next March and as long as this pays above 4%, I'm leaving it right there. I will receive a pension and social security as well so I don't need it to gain a lot.
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Still can’t believe they don’t have REITS available - you can buy plenty more Vanguard funds with other providers - absolute madness
Excellent video as always Ramin. As you mentioned sometimes it's cheaper to hold vanguard funds on different investing platforms - could you do a platform comparison video? Your previous video about this is a few years old now and fees/charges have changed.
VHVG ETF looks attractive. But if he wants a global fund (not just Dev world), why hasn't he mentioned HSBC FTSE All-World Index Fund Accumulation C OGC 0.13%? People have pointed out this fund to him before. Why is he still banging on about Vanguard so much? Is he sponsored by Vanguard either here or somewhere else? Vanguard platform charge capped at £375. Why isn't he recommending for example Lloyds Investment, £40 a year flat rate? I paid £1.20 transaction charge there a few days ago to buy more of the above HSBC. I think Vanguard have become too expensive, at least in the UK (most of their funds tend to have MUCH lower OGCs in the US, hyper-annoying). So, again, why isn't Ramin more interested in other, hungrier and less ostentatious investcos?
@@mikerodent3164 because it's more expensive to use those platforms that provide the HSBC open ended fund, because their platform charges are significantly higher than Vanguard, or they are charging to buy and sell said HSBC fund. Vanguard ftse dev world etf, Acc share class ongoing etf charge just 0.12%, plus vanguard platforn charge 0.15%. Hl charge 0.45%, Fidelity UK 0.35%, aj bell 0.25% plus charges for buying and selling open ended funds etc. I'm using Fidelity UK for a sipp, I had a reasonable amount of money from previously frozen pensions. So put into Fidelity sipp, platforn charge capped at £90 per annum and £7.50 per dealing fees, but I'm not regularly contributing to this and keeping dealing to a bare minimum. So I also have a Vanguard sipp for regular monthly pound cost averaging with 2 index funds Acc class, no buying fees, simple. If you want pound cost average with etfs there maybe dealing charges, plus bid arse spreads and not possible to buy fractional shares of etfs on most platforms. So for monthly, regular investments open ended index funds are more efficient and cheaper
This is about Vanguard releasing new funds, not what similar funds are available from other providers. In fairness to Ramin, he does at 12:30 begin to mention other providers and that the Vanguard offering is not perfect. Sorry, but your comments are unnecessarily harsh.@@mikerodent3164
@@mikerodent3164 Ramin has mentioned the HSBC fund in the past, that's how I found out about it. IWeb (where you can buy all the Vanguard funds and other global trackers, money market funds, and single gilts as well) has a platform fee of zero.
Is Trading212 still the cheaper option for the same funds on Vanguard? VWRP for instance
wasn't it mostly Emerging Markets and UK that hurt the Global All Caps fund, not the small Cap tilt? Because the Global Small Caps funds returned a solid 12% past 10 years, but Emerging Markets and UK didn't
I don't think you can call that fund tilted, it's just a very complete global index.
It's worth noting that you still have to pay income tax (at dividend or interest rate) on accumulation ETFs or funds if held outside a tax wrapper (ie. ISA).
Yes, that has become an issue since this irksome div tax came in. But some ETFs will tend to hold primarily "growth" companies, where dividends will be kept to a minimum. You can then be exposed to CGT potentially, and take-up of CGT allowance should be maximised by selling and rebuying in March each year: but div tax won't be charged on growth. Outside a wrapper these details are pretty thorny ... and important.
Why leaving out emerging markets ? Just because of the fee ? Would you complement the portfolio with an emerging markets one ?
VHVG comes with currency risk as it is in USD?
How easy it to change your fund from the FTSE developed world ex UK to the developed world and how do you do it?
interesting stuff thanks, In Investor are soon bringing out their own SIPP no platform fees and if you split your portfolio 90% VHVG & 10% VFEG you get ultra low fee (lower than VWRP) and world investment in a ACC fund
Link please
A fantastic video. Thanks. A couple of points (a question and an observation)...
1 - When you do your portfolio switches are there no bid/offer spreads for these ETFs on the Vanguard platform? I'm wondering, when you do a wholesale shift from one ETF to another, whether you are bleeding off a bit of capital compared to staying in the same ETF each time you do a switch.
2 - When you say that small cap tilt dragged down the performance of the global all-cap ETF vs the other two shouldn't you also attribute some element of the underperformance of the all-cap to its higher fees vs those other 2 ETFs? Maybe it would be non-trivial to calculate but it would be interesting to see what that graph at about the 16 minute mark looked like with fees stripped out, i.e. how the underlying investments actually performed.
Why not VWRP? Just because of the 0.22% fee?
Then, why not VHVG+VFEG in proportion say 90/10?
Does anyone know what Ramin uses to compare and show different ETFs returns during the years?
I too have bought the FTSE Global All Cap fund for many years. I think swapping now would be a mistake as I have been buying those smaller companies and a slice of the emerging market held in the fund cheaper because of the Ukraine war etc. I think there is a good chance that the returns will catch back up when the Ukraine war ends. Also, I don't like the idea of chopping and changing to chase returns. My original decision is still sound.
I too are in the same fund (VWRL) although I have just transferred it over to invest engine to save on the platform fees and I find invest engine is streets ahead of vanguard as they have a phone app, auto balancing and reinvesting etc. I have stopped adding to this fund though and instead started the Invesco etf instead as it has lower fees and is pretty much the same as mentioned in the vid. I was going to sell my VWRL and put it all into the Invesco but I have changed my mind in that and just going to hold it. As mentioned in the vid they may drop the fees in future but overall it's been a good fund despite the slightly higher fee.
why do you choose VWRP/L compared to ALL-CAP?@@phillipthompson9809
@@phillipthompson9809 Why not the Acc version VWRP. And does the invesco fund have a big buy, sell price spread
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I just noticed that Vanguard are offering an accumulation version of their money market fund. Does it matter at what point in the month you switch or is it just swings and roundabouts ?
Thanks for this video. I have been investing for 5 years now, when I first started out I was less interested in fees and more interested in past returns ! Over the last few years I have changed my style and think Im more disciplined and balanced. I have just opened a Junior Sipp for my six year old and have an account with Fidelity. I have been considering moving it to Vanguard as the fees seem cheaper, but the choices seemed limited may be time for a second look. I plan to
Max it out this year and invest in cheap index funds like the ones you pointed out. I want something I can set and forget ie accumulating funds. If the market does crash or correct I will double down in the following tax year, if it does not I will leave it alone. This pension will have over 50 years to compound so hopefully it will give here a little boost up the ladder. Do you think a green energy fund would be prudent to add for a 50 year investment horizon ? Regards Tim
There is no service fee on junior accounts with Fidelity UK, so free up until age 18yrs old. And no buying or selling fees for open ended funds, plus £7.50 per deal for etfs. So if you stick with open ended index funds it's free, cheaper than Vanguard junior sipp unless they've changed their fee structure. If so I think better leave the junior sipp with Fidelity for now unless they change
@@fredatlas4396 ah great thanks I will leave her set with Fidelity then.
Thanks for another informative video
Our pleasure! @PAZPERDEE
My SIPP with Vanguard is all accumulation funds, but my S&S ISA is all in income funds. I personally enjoy the process of reinvesting the dividends plus if I ever lose my job, I will have a small amount of money coming in from my ISA without having to sell anything.
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Love watching your channel
Modest as you are Ramin, I would say there is a reasonable chance your calling for these funds for the last couple of years could be behind Vanguard UK launching them…. Thank you
Thank you @MrHotrod79
Hi Ramin, great videos, thanks for your work! I am thinking of opening a vanguard account and would go for an accumulation fund. Were you saying in the video that these accumulation funds require self assessment in UK? Can I protect the need to do a self assessment if I open a Vanguard ISA account and choose the same accumulation fund? Thanks!
Because it's an isa no need for self assessment.
@@Mass1987 thanks!
Hi Ramin, thanks again for another great video. Since watching Pensioncraft I've similarly simplified my approach to investing. Is it simple to swap from one fund to another? Did you have to sell all of the fund to buy the new find you mentioned in the video?
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I have invested in Vanguard FTSE Developed World ex-UK Equity Index Fund Acc (VADEA) for years via Fidelity's platform. I didn't see it on the list though.
Thanks Ramin I really appreciate your knowledge and your generosity to share it.
I appreciate that! @katscotty
Hooray! They must've been listening to the pod ;)
You might be right @dominicroe2261 8-) Thanks, Ramin
I've switched to VHVG (acc version of VEVE). Global stocks without LifeS 100% without home bias.
Nice vid , have you got one about buying gilts directly for uk residents ?
Hi @daviddoink872 "Why UK Government Bonds Are a Great Investment Choice" ua-cam.com/video/2EgUzuabUJk/v-deo.html Thanks, Ramin.
Would like the Vanguard Lifestrategy ETFs to be offered in UK in GBP
Romin thanks for the video. However you should mention Global all cap is in GBP vs VHVG is in USD. It’s an extra currency risk on top, which ok maybe long term does not matter much but still..😊
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Makis55
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There is no currency risk, because you are not holding the currency (USD), but instead are holding other assets (shares in company stock) that are simply being evaluated for you to look at in USD. If such a tracker fund's value is/was ever not equal to a GBP-denominated tracker fund holding the same distribution of underlying shares in company stock, then an arbitrage opportunity would exist and would quickly be capitalised on until the arbitrage opportunity disappeared.
is the fund in your isa or sipp ? thanks
Any ideas for where to invest for UK non-resident expats? I believe Uk non-residents are not allowed to invest in these funds so where should I park my money instead?
Marvellous presentation as usual. You are my usual Keynseian GoTo; (shame that Keynseians are always wrong long-term).
Lots of questions/comments (as usual) - not adjusted for CPI, Gold (RMAP)- the ultimate preservation of wealth made +27% since beginning of 2020. And are your holdings rebalanced and on what schedule?
In addition HMWO is cheaper 0.15 v 0.22%?
Hi Mike, I only have one fund (VHVG) so no need to rebalance (at least, not by me!). HMWO is an income fund which I avoid personally as I prefer the simplicity of accumulation funds. VHVG, an accumulating developed market fund, is 0.12% management fee so lower than HMWO. Gold is still in drawdown, in real terms, since January 21st, 1980 i.e. its real price is down by 42% over those 41 years. From January 2020 to yesterday's close (January 16th 2024) the price of gold is up 12%. Clearly, the starting time for these return calculations is important but I'd argue that gold is a very poor store of wealth given its volatility and drawdowns. Thanks, Ramin
@@Pensioncraft Yes indeed - stupidly I made the comments well before the end of the video; apologies :-/
With individual GILTs not being liable for capital gains tax is it worth holding the VGOV in general accounts (if you have excess money above ISA allowances) i guess the downside would be then the dividends are treated as income i believe.
Hi @danesedgwick2058 personally I'd hold single gilts, particularly in a general investment account (one with a low coupon to minimize income and maximize capital gain). The good thing is that you know the return on your gilt investment the day you buy it assuming you hold the bond to maturity. I love that certainty! With a bond fund you never know what the price or income will be in future. Thanks, Ramin
Can you buy a Vanguard etf on H and L? The invest £100 then a monthly payment
whats the Invesco accumulation fund tickerFTSE All World?
Do you have any information on a typical fund for people who are retired and need to withdraw . So not in the accumulation phase .
Im the opposite, I prefer dividend etfs or stocks, lower maintenance is not an issue for me because I enjoy keeping record, but I like to reinvest dividends from one part of my portfolio into another. Also easier to hold a dividend etf, which will likely still pay some dividend during severe downturns, increasing the amount of cash I have for reinvestment at the best time.
What is the name of the Invesco Fund? I cant find it on their website.
Great video! Won't you need to pay an exit fee to switch from your previous fund to this new ETF that essentially negates the saving in ongoing costs?
Exactly what I was wondering. I'm relatively new to investing and I assume that Vanguard charge for switching your investment from one fund to another - or is that included in their annual platform charges? If they charge, then presumably after a certain time the lower fees outweigh the fee for changing?
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Hi Ramin. Great video as always. However, can you tell me if there is a charge if you switch from one Vanguard product to another by selling one and buying another?
I’m pretty sure there isn’t a fee associated to it and you don’t have to sell as there is a switch function.
No fee. You can use switch option that Vanguard offers. The switch will take some time, might be a bout the week. If during that week market is volotile then you might gai/or loose substantialy. I would still ignore this risk if you ahve a rational reason to switch funds, such as reducing fees.
I wasn't sure about this. I am currently moving out of the target retirement 2030 fund ( I understand more about funds selection now). I was under the impression a transaction charge was incurred.
Has anyone located the VVWDC money market accumulation fund on the platform? I’m struggling to find that.
Income ETFs such as VWRL for example, still generate Excess Reportable Income (ERI) so they are also a headache when doing your self-assessment tax returns.
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Hi Ramin, for my understanding, are you holding UK government bonds in one SIPP/ISA and then you have another SIPP with the global ETF?
Hi @nigeltrivass4128 I've got an ISA with Interactive Investor where I hold my single gilts. But I'm 100% invested in that global equity fund in my Vanguard SIPP and Vanguard ISA. Thanks, Ramin.
@@Pensioncraft Many thanks for being so candid about your investments, and for creating such quality videos.
How about payment of fee's? With a an acc. Fund would Shares need to be sold periodically to cover fee's? With a Dist. Fund you naturally keep a cash balance which covers fee's so there is no need to sell shares
Hi @cheepchips my Vanguard platform fees are paid with a direct debit. You can also pay them with account cash but it seems a waste of tax-invisible money to spend it on fees. I'd rather have that money compounding. Fund fees are automatically subtracted from fund returns so you never have to manually pay them. Thanks, Ramin.
@@Pensioncraft thanks for responding 👍🏻
Thank you for another great video. You show Invesco’s FWRA. I’ve got FWRG. I know the difference is the former is in USD and the latter is GBP. Have I made the right choice as a UK investor? I’m a bit unclear on it. Thank you
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I have the same question, as a UK investor should we be investing in FWRG? I understand our exposure will be GBP than USD? Is that the only difference?
I'm in the process of switching over my pension portfolio from HL over to Vanguard. Although HL's platform is good their charges are very expensive and their wealth fund recommendations are atrocious. Totally biased imo and promoted stuff in favour of certain players.
The only minuses with Vanguard is they're currently restricted to choosing funds from their own product range. It would be nice to have the option to invest with other fund providers too. Also the fund screening service is not very good, has very limited options to choose and filter funds.
On your bookhelf - Numerical Recipes in C - Damn you're a real OG!!!!
Hi @RajaseelanGaneswaran I love that book! Nowadays I use R so a lot of the methods in Numerical Recipes (and lots more) are available in R packages. Thanks, Ramin.
Great content like always, very educative and beneficial. Just a quick question, what do you think is a better choice for long term investment, LIfe Strategy 100 or Global All Cap Index ?? I have my money split between them but I would like to pick one for my future investment. I would really appreciate your opinion. Thanks.
I moved from lifestrat 80 to ftse dev world ex UK. It outperforms every year on record. (Also outperforms lifestrat 100)
I know past results dont guarantee future returns, but you need some metrics to make a decision 🥰
Doesn't the Life Strategy 100 bought in the UK contain a UK companies bias (i.e. contains more than the 4% or so of UK shares that feature in a Global Fund) and therefore, because the UK has historically underperformed the US, the LF100 has underperformed Global funds?
Meet Maria she will help you recover ITP withdrawal pending
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Makis55
The username
This video has made me realised how weighted I am towards equity (and the US for that matter!) Time for some bonds in a low cost fund! (better now than down the line!)
So do you sometimes sell your entire holding of a particular stock and replace it with your new favourite? Do you not get nervous during the period in limbo in case of a big price change?
ETF's switch the same day
Why use vanguard at 0.15 fee when you can use t212 or Investengine at 0% for same thing?
Does this mean you’d get better returns in the accumulation fund over the income fund because all dividends are reinvested in the accumulation fund so the price rises higher, whereas in the income fund people may not always reinvest their dividends?
I have income funds in my isa and always reinvest but just like to monitor how much I actually get in dividends. Just don’t want to miss out on more growth if the income fund gives better returns
I believe short dated gilts are better than money market funds. When the herd of investors all want to sell MMF to buy stocks they may be gated.
If you are concerned about fees, why are you not buying Vanguard funds using Trading 212 where there are no platform fees?
Vanguard's VWRP is actually free, even slightly positive. According to trackingdifferences, 2022 had a tracking difference of 0 - it perfectly followed it's index. In fact since 2014 the tracking difference (for the income class) is -0.01, showing it actually returned slightly more than the index.
Please, cover tracking difference & stop focusing on TER!
What do you mean? Over the long term fees are super important, more than the 0.01 difference of tracking the index perfectly or not
Fees, like TER, but also transaction costs, all contribute to the tracking difference. However, a fund can counteract this drag. They might negotiate better deals, use securities lending, more accurate measurements of market cap, and so on.
The difficulty is that this is rarely advertised, and can only be reliably calculated after the fact. And it changes over time as fund managers improve, or slacken, standards. You need 3-5 years' data to see how a fund truly performs.
TER is forward-looking, but it's only one aspect. It's marketing. Everyone piling into e.g. Invesco's "cheaper" world tracker could be making an expensive mistake. We won't know the true performance drag (or gain) for 3+ years.
But, am I right in thinking that you still cannot buy fractional shares in Vanguard's ETFs on its UK platform, therefore, you may have to rebalance AND reinvest if you hold multiple funds/ETFs - which is faffy?
Meet Maria she will help you recover ITP withdrawal pending.
She's on telegrams..
Makis55
The username
Many income ETFs also have Excess Reportable Income. So one does not avoid this tax reporting complication by buying only income ETFs. This fact seems to be little known. Many investors do not know how to look up the ERI of their fund holdings.
If you hold the ETF on a platform I think the platform reports the ERI to you. Is that not the case? I thought most income ETFs distributed all their income so they wouldn’t have any ERI? I have had a case where a platform incorrectly reported ERI on an income fund and I had to get it corrected.
I have never had an ERI report from Interactive Investor.
Vanguard VERX is an example of an income ETF which also sometimes reports ERI, but not every year.
@@rrw1rrw1 I would query that with II if you hold an ETF with them that has ERI.
It depends on the platform and I've found it quite hard to find out in advance what each platform will provide. (Even some expensive "do it all for you" portfolio platforms such as Moneyfarm don't do ERI for you, which I believe means that vast majority of their GIA customers are getting their tax returns wrong each year.)
Vanguard need a small cap value fund
I notice your current Developed Markets Ex-Uk fund, Risk Rating is 5 out of 7. The new Developed Markets ETF Risk Rating is 6 out of 7. Why do you think this is? Would this factor in your decision to swap?
I'd like to also know this
I think it’s because it’s ETF and traded more frequently ?
Disappointed that it doesn't allow to buy fractional shares on this ETF whereas you can get fractional shares with their Global All Cap. Money sits uninvested when you make a direct debit as a result
What they still don't have, and is partly why I left Vanguard UK, is a Global Gov only Bond Fund. They have the UK Gov bond fund granted, but not global gov fund. If we see another financial crisis and wanted to shelter of gov only bonds (as corp bonds would also be crashing with equities), you would be relying on the UK GOV fund only rather than diversifying in different countries.
I’ve switched completely from the U.K. £ wii be pummeled as the export balance breaks. 😮No AI all in the hands of US markets .No reason to invest in the U.K.
Excerpt that the U.K. is unfashionable and therefore arguably cheap and arguably therefore has higher expected future returns. Depends on your risk appetite and luck….
Are you not tempted at this point to switch to, say, interactive investor? Sounds like you'd save on platform fees, and you'd be able to buy the HSBC all world fund for just 0.13%, to avoid excluding EM?
Meet Maria she will help you recover ITP withdrawal pending
She's on telegrams..
Makis55
The username
Dear Ramin - my plan is to put a lump sum 60k ish into Vanguard SIPP using the last 3 years of tax relief entitlement. To recuce risk of fluctuations in the stock market (BWRP fund) I'm thinking it is best to add cash in multiple 10k chunks in a back dating/ carry forward capacity (last 3 years entitlement) From your awareness, is this possible? or as I am requesting backdated tax relief, do I have to put the whole lump sum in in one transaction (60k)Thank you in advance for your outstanding information sharing allowing for much better decision making.😊
Sorry -typo VWRP
The accumulation funds , if I have this and it’s outside my Isa do I still pay tax on the accumulation part?
The dividends from 'accumulation' funds are taxed in the same way as the dividends from 'income' funds.
When selling an 'accumulation' fund it's more complicated to work out the capital gain or loss .. because the dividends have been re-invested into the fund, the total dividends received have to be subtracted from the current value of the holding
@@tonygrantham3213 many many thank yous . So I only pay tax on the dividends that have been accumulated WHEN I sell my fund or every year end?
I just want my momentum fund back!
If I have say 400k in my pension pot and 3 months before I retire ,and market drops 20 percent ,and my pension pot drops 20 percent ,am I correct is ,it shouldn't bother be ,as I'm only gonna take say 20k out of my pot to live on the following year ,and a year later I'll take another 20k out to live on ,and in that time ,the market will have recovered and the majority of my pot is back up
Which leads me on why do pension managers start to move the majority of people pots from sticks to bonds so they massive reducing the risk but by doing that potentially reducing growth
For example
I have 10 years left to retire and I've told my pension provider to leave my money in 100 percent stock
My friend has 2 years to retire and they have moved his money to less stocks and more safer bonds
But his pot only grew 2 percent in the last year and mine grew 17 percent
I'd be annoyed if I was him as he has 300k in his pot
It's called 'Sequence of Return Risk'. If you are heavily invested in stocks and there is a large drop in your portfolio value when you retire then your 20k withdrawal represents a higher percentage of your portfolio compared to before the drop. As it can take years for stocks to recover after a crash then your 20k withdrawals could ravage the portfolio value. In theory a more defensive portfolio is likely to suffer less in a crash so the capital value would be somewhat protected against a downturn (also if you decide to buy an annuity at retirement then again the idea is to protect the capital leading up to retirement by reducing stocks %). Long term 100% stocks perform the best but that does not always match up to human emotion or the timescales when you might need to access funds due to the higeher volatility.
Emerging markets are due to grieve growth. It will be innovative in the west and growing middle class in EM
Vanguard also charges a hidden "transaction fee" on their funds. The Invesco etf doesn't but it samples fewer companies also
Where is the transaction fee. Only if you want the bought right now. But if you just set it to buy next day. I dont see and perhaps obviously the hidden fee
@@danesesse it's a fee to cover the buying and selling of the underlying shares, on top of the 0.22% and on top of the vanguard platform fee. It's an annual fee not per etf transaction. It's properly hidden but show on your checkout document
@@magnets1000 you mean the account fee. Thats nit hidden pretty much every account has a fee. Except the new ones like trading 212
Where's my comment gone!!!
@magnets1000 so does this make the change in this video.of ramins sole fund worth it?