Best Index Funds For Long Term: One ETF To Rule Them All
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- Опубликовано: 10 июн 2024
- People are usually surprised to hear that I have just one global stock fund in my core portfolio. In this video, I look at the considerations when choosing a good fund that you can stick with over the long term and I give you my opinion about which funds are best in various scenarios.
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Ramin what are your thoughts on the vanguard FTSE Global All Cap Index Fund Accumulation ?
Nice video. Do Trading 212 offer stop losses on US equity held in UK ISA?
Thought u weren't keen on trading 212 a few years ago (you said this in your freetrade review)? What changed your mind?
@@danieleniccoli3871That's currently running at an annual return of 8.6% but the dividend yield is low.
@@jaywarriuk money talks😂
Thank you Ramin! Funny, I started buying into the Invesco FTSE All World UCITS after watching your short video few weeks ago.
Thank you so much for this video. I was confused by the investco tickers as T212 didnt show ACC or Dist
Hi Ramin, great video as always. Do you have a Vanguard bond fund you recommend?
Thought there might be a mention of an etf run by legal and general (LGGG) which tracks equities in global, developed markets. It charges 0.1% so is cheaper than many of the funds discussed in the video, but it does a similar job..
IGUS is my favourite. Tracks the S&P but removes the fx risk.
Vanguard already have a global weighed fund, FTSE Global All Cap. Yes its a little more expensive but 0.23% including all EM within that isn't bad, coupled with Vanguards low platform fees.
Hi Ramin, thanks for the video, really interesting and helfpul. A quick question if i may, how much consideration should be given to the current price of an ETF if the planned investment and holding period is long term?
Hi Ramin, that was really helpful, thank you. Do you hold your global fund within an ISA? If you have one, which platform do you use for it?
Very useful as ever. Was surprised , wondered why LGGG didn’t make the list
Great video. I specifically use the HSBC FTSE All World Acc Class C. Be great if you did a similar video on bond funds
This is just about the cheapest. I might put my 2024 ISA allowance into this fund.
Thanks Ramin, what else do you have in your portfolio any individual stocks bonds etc?
Really great thanks - Whats the differenc between VVDVWE and VADEA??
Brilliant, brilliant video full of useful information. Pretty chuffed that I only have one fund too in my core portfolio (fidelity as mentioned in video). However what I do need to do is, if I can, switch from OEIC to ETF as the charges are so much less on my platform.
This is very good content for someone in Singapore. Most single fund holders here prefer the Irish-domiciled ETFs to hold and most are listed on the LSE. The darling in our community here is VWRA but it looks like FWRA has given us more options.
Thanks for that! @jinngeechia9715
Ramin, thanks for the video and the selection process. I have been thru a similar process about 18mths ago which included a study of the global indices. I think the FTSE Global All Cap index is better than MSCI. It does large, mid, small cap across developed and emerging markets (90/10).
Vanguard provide an etf on the LSE in USD or GBP and as either Acc or Inc. ticker V3AB, V3AA plus ...cost is 0.24%. These etf track the FTSE Global All Cap.
The EM have held back overall performance....which has been led by Developed markets.
My benchmark is Vanguard VT etf only available in the USA.
So just to clarify you think invesco is the best global fund? Do I invest directly through them or u think best through a platform like 212? Thanks
Hi Ramin... can you comment on any possible risks on Funds/ETF's that use "Unfunded-swap" replication methods. If there was a big sell-off at some point (quite likely), these could run into trouble?
VWRL is the axial etf of my portfolio. I prefer always distributing etf.
I would love Vanguard to do an X US fund in the UK
Thanks for the recommendation
No problem @omarkhan7752
The ticker for fidelity is FIAAGM not FWRG as stated at 12.50min…
Dont accumulation funds add alot of trouble when trying to pay dividends tax in the uk?
Thank you Ramin. I'm looking to open a stocks and shares ISA for my baby. Could you do a video about investing for children please?
I've been trying to open a trading 212
Account but the site can't get the photo of my id . It keeps saying that the last 2 lines are not visible but on the photo they are perfectly clear.
Not a good start.
Is FWRG hedged for currency fluctuations?
Hi Ramin, what do you think about Synthetic ETF's?
Been on the same DW fund as Ramin, but had included others like EM, UK and Small Caps. So far only the DW is providing returns while the others are all losing. I give it six months and if still the same, I will move all to DW.
A quick one, it says on the web 212 is a Cyprus based company. The speaker says it’s a Uk company. How is this?
Would you say Vanguard is the easiest for a complete beginner who wants minimum bother, maximum security, & maximum returns? I am in the UK.
Ramon actually mentioned this in a video from a few years ago, but you can get a global all cap vanguard for less than 0.22% by buying a 89/11 split global developed and emerging marking index fund.
“All caps” ?
I created a 212 account and entered your code in the promo code section, the message was something like “congratulations, you have earned a bonus”
But I can’t see anything different in portfolio or anywhere else in my account? What has it given me? And where is it?
Thanks
So helpful, thank you 👌
Glad it was helpful! @freddyland4686
why does the price of FWRG start with a 'p' instead of '£' on trading212?
Hi Ramin, is there a reason you're sticking with Vanguard given you don't get to pick a truly all-world fund/ETF?
For my SIPP with Vanguard I have FTSE Global All Cap Index Fund, on T212 I’m all in VUSA for now but those suggestions are very nice !
The hsbc all world is where i transfering my 2 old workplace pensions into ,i get global and emerging markets and uk in accumulation in gbp for 0.13 this has it all
Check with HMRC first as they are stating shares of certain types like fractional shares and dividends can not be held in stocks and shares ISA. It is against UK tax Laws.
Great video thanks, but I'm confused at the end why (if not restricted by your platform) you wouldn't recommend the top choice on your list which which less than half the cost of all the others?!
I would assume the first isn’t acc the other two are not 100% equity or the proportion of allocation are diff?? I like the vuag to be honest, despite the ocf is 0.07
Hi Ramin, should I be reading anything into the fact that the Vanguard FTSE Global All Cap has “only” £2.5 billion assets under management in comparison to the Vanguard Developed world ex UK having £11.3 billion assets under management? Should this sway where I should invest? Thank you
Is there an ongoing fee even on trading 212 which is fee free?
Thanks Ramin, I would pay the fee for currency exchange from GBP to USD when buying the ETF even though you're paying exchange rate to the broker; it has paid off in the last decade with the continual decline of GBP. When you buy the USD fund with GBP, you're also making a subtle bet that the UK economy is going downhill - which it is. T212 even tells you the 'FX impact', and for me the USD bet is very green and I don't foresee this changing any time soon sadly.
Thoughts on PRWU?
Should tracking error be given more consideration than minor differences between and annual charges ?
A 0.1% difference in charges should have the same effect as a 0.1% tracking error. Work to eliminate the one that has the greater impact. If both are impacting your investments, then maybe there's a better fund for you out there? If you want to make a change, then you should, if possible, understand the reason(s) for the tracking error. For example, a market cap weighted fund will do well when the companies having the biggest market capitalisation do well but if they fall out of favour, the funds would take time to rebalance, leaving you more open to volatility or losses. An equal weighted fund would be less volatile but it would probably also provide lower returns. That decision would be affected by your attitude to risk.
Personally, I think that, if you are so keen to prioritise growth that you are concerned about 0.1% differences, then you will soon be looking beyond a single fund and wanting to create your own portfolio, balanced the way that you want it and matching your attitude to risk and volatility. Ramin is describing a simple "fit and forget" solution, which takes into account geographies and sectors for investments and that should achieve good growth and acceptable risk and volatility over the longer term e.g. 10+ years.
Vanguard would probably argue their cheap all-world fund is the FTSE Global All Cap. The OCF was reduced from 24bps to 23 previously. I’d like to see it get to 20bps now that assets have increased. Whether the EM and small-cap exposure will pay off, only time will tell!
You need to consider the tracking error as well as the ongoing charges fee. A low fee fund can have a high tracking error and a higher fee fund such as SWDA can have a tracking error that helps to offset the increased cost.
Hi Ian, I am a fan of your channel as well. How would you go about calculating tracking error? Is there a tool or do you simply have to use fund return vs benchmark return?
@@Lightning_Lemon tracking error can often be found in the ETF factsheet or you could calculate it as you said
@@Lightning_Lemon It is just the difference between the ETF return and the index benchmark return.
If you were doing this today would you choose FTSE Developed World UCITS ETF - Accumulating over the Ex UK one because it has a slightly lower fee (0.12%)?
Fantastic material as usual 🎉 thank you
Glad you enjoyed it @camerawatchuk
Thanks for the video. What are your thoughts on potential liquidity (run on the bank type scenario) issues with index funds? Does the risk exist? What can you do about it other than buying trusts, but these typically have high fees and underperform?
IIRC he mentioned this in another video but it’s very low risk in the UK, the markets are well regulated and nearly no failing banks have lost client funds.
Many thanks this was such an insightful video!
Glad you enjoyed it! @davidcollier6520
Great video as usual. What do you think about SWDA iShares Global fund? Also what do you think about diversifying into 2/3 different global index funds, does it make sense from your perspective?
I'd recommend SSAC instead. It includes the whole world instead of just developed countries, so it's more diversified, plus it automatically reinvests dividends.
Also, there is a ton of overlap between global, market-cap-weighted index funds, so there's not much point in having multiple.
Interesting video. I'm surprised that the ISHARES III PLC CORE MSCI WORLD UCITS ETF USD ACC (GBP) ticker SWDA didn't make the cut - if my reading of its performance over the longer term is correct then it beats VWRL and VEVE and exactly matches LGGG. The Invesco ETF mentioned so far would appear to underperform SWDA, VEVE and VWRL by about 0.75% from launch to date.
Any thoughts on VG Life Strategy 100% in comparison?
Is there any chance of doing a platform cost comparison video again (ii vs Vanguard vs HL)?
I think the last one you did was over 2 years old.
HL is cheaper but only once you get above a certain level invested, you can work it out by looking at the fees. On the ISA its a £45 cap per year in fees (for ETFs / Shares /Investment Trusts) and the fee is 0.45% so any holdings of ETFs above £10,000 there is no fee.
I have Nest because of employer contributions and LISA for last few years but I opened ISA with Vanguard investing in FTSE Developed World ex-U.K. Equity Index Fund (VDWXEIA). I am also thinking about opening SIPP with Vanguard - shall I also invest in FTSE Developed World ex-U.K. Equity Index Fund (VDWXEIA) or something else?
Great content for the british... I will pass on the broker to my UK friends here in thailand
Thanks @stevenobinator2229
Appreciate you said you hold the one fund for simplicity. I have it too but why not have the FTSE global All Cap index so you get emerging markets. I ask as I’m trying understand if it’s worth it or just stick with ex UK fund.
Any thoughts?
Great channel
I believe it’s simply due to the fee.
I had the All Cap and actually swapped the lot into Dev Ex UK. Too much volatility in EM for me, and UK is contrary to my accumalation strategy. Lower fee was an added bonus but not central to my decision.
I decided a 2 ETF portfolio was low maintenance enough for me.
I went with Vanguards 90% (VEVE) and 10% (VFEM). The fees work out cheaper than buying (VWRL) and it's close enough to be comfortable with.
spdr imid cheaper
@@UpwardMindset-he5mz I'm limited to Vanguard this year and i want to deal in £.
Exact same here.
@@travellingtom6091 I would say wish us luck Tom but I don't think either of us would be in it if we was relying on luck. So instead i'll say; stay vigilant 😅. Dont think it'll catch on but it really should!
I do this as well with the accumulation versions of these funds on investengine
I've always suspected that free trading platforms means that the bid offer spread is worse than if you paid a fee for the transaction.
Can anyone get firm this question? And improve on suspect?
@Pensioncraft Mu understanding, and according to the HL information on the ETF, (I've just checked) $VEVE includes UK.
Fund domicile is another consideration, for tax exposure, US Estate tax in particular.
I went with VWRP. Ticks most of the boxes. But it is in dollars and fees are a bit higher at .22, so I think I will switch to FWRG going forwards - so thanks for that, it wasn’t available at the time.
Exact same situation for me
Hi, both VWRP and FWRG are traded in GBP on the London Stock Exchange, and they are both exposed to the same currency risk. And they both have their NAV calculated in USD.
@@TomsPersonalFinance Just checked the investor sheet and,like VWRP, FWRG’s base currency is USD…?
@WillJBailey sorry I might have misunderstood your original comment! The "but" made it sound like you thought FWRG was a different currency.
VWRP and FWRG are both identical currency wise (base currency and trading currency).
The base currency doesn't really mean anything useful, it's just how the fund calculates its NAV. What is important is the trading currency and the currency of the underlying securities within the ETF.
Hi Ramin, in regards to ETF's, can you clarify if you buy an ETF on Trading 212 do you actually own the ETF/assets?, as i know on Etoro virtually all the ETF's available are actually CFD's. Also can you have an invest and ISA account with them at the same time? Many thanks for your great quality content.
Yes, with Trading 212 you do buy the underlying asset and you own it.
Thanks for your video, it's an interesting choice and I'd certainly favour simplicity where possible. My only concern is that these global equity funds are weighted heavily towards the US market, presumably due to their reflecting global market capitalization proportionally, but current predictions are that the US market will underperform over the next 10 years relative to international and emerging market stocks. Do you just consider the potentially lost gains not worth the trouble, or do you have another rationale for it? ( I can think of a good one, namely that we can't really predict the future with much confidence...). I'm heading towards 'rings of power' rather than 'one ring to rule them all'!
Where did you hear that the US is expected to underperform? Nodoby can know the future
@@rollojarvis6567 Watch his prior video, 'Surviving the Lost Decade'. Also read Vanguard and Blackrock's reports on their predictions for the next 10 years. Yes, it's true that nobody can know the future, I said that in my comment. However, on the basis of the information I've cited, it would seem to be an error to put most of one's investments into the US stock market. International diversification is probably a better strategy.
I would think that the US companies have just as much chance to move into new economies as any other countries companies, think fast food, car and tech companies for example. Also the global ETFs have about 60% US and of that the US companies make something like 40% of their money overseas, so a global ETF is not quite as biased to the US as it seems.
Does the new pensioncraft 'copy funds' comparison tracker tool make the comparison based on total returns with dividends reinvested?
@RM-jj4xi Most of the funds we use are accumulation but you choose which funds you choose to copy from Yahoo Finance and these may not be accumulation.
@@Pensioncraftthks
Hi Ramen, thanks for the great video. Am i right in saying an accumulation fund (lets say ftse100 index) should out perform an income fund of the same content? I dont necessarily see that when comparing historical performances
I don't see why it would. If you manually reinvest the dividends of an income fund back into that same fund, then your overall return should be very close or equal to what the accumulation fund return would have been.
fund say 3% entry and exit charge on kiid ???
Sorry why would anyone use vanguard platform? it is far more expensive than what is available
Diversity.
Quite interesting
Thanks @w00dyalien
The Vanguard FTSE All word one with the EM markets has just 10% of them, so its barely any difference between DM and EM🤣At least the one we have in the EU, 10% is really low for EM markets
When talking about Accumulation funds, I think it would be beneficial to always state that the accumulated dividends are still taxable outside of a wrapper. It is common misapprehension that they are not.
Interesting point. Is this due to the fact that the dividends are added on to the NAV of the fund (really the AUM), and manifest themselves as an increase in share price, which, in itself is subject to capital gains?
@@robertdewar1752 it is not due to that, it is simply because income is income, and is taxable irrespective of whether it is distributed or withheld for reinvestment. With regard to capital gains, you’d of course also need to account for the change in cost base as a result of these accumulated dividends.
Hargreaves Lansdown don't do either of the tickers FWRA or FWRG. There ticker for this fund is FTWG. Any ideas why that is?
This is my Guess why, if the fund is outside an ISA it can get messy separating the accumulating part of the fund, which can be needed for TAX returns for larger holdings. So it would make sense to only sell the distributing ETF version FTWG.
Im currently retired, and considering the current rollercoaster nature of the stock market, I decided to stay on the sideline for awhile, now I'm worried with the numerous bank failures as of late, am I better off reinvesting my savings in the stock market or do I wait?
If you live in the EU there are accumulating versions of Vanguard FTSE All-World with developing markets for 0.22% VWCE/VWRP.
Bingo
Does it matter if the ETF trades on in a currency other than your home currency? I only see VWRP on the LSE and my home currency is the euro 🤔
PRIW appears to have an entry fee and exit fee of 3% each. Is this correct as it significantly impacts the fund performance?
Hi. Read the asterisk underneath the costs section on the KIID and you'll see these entry and exit fees do not apply when investing in the fund through a platform. Hope that helps.
At the end you suggested FWRG @0.15% is the one to go for but didnt suggest the HSBC @0.13 listed earlier. Assuming my platform (II) supports both funds and EFTs, why would I go for FWRG? What am I missing?
You're not missing anything @bobdobalina276! If you're on an ETF-only platform (Trading 212, InvestEngine...) I'd go for FWRG as it's the cheapest and it's an accumulation fund. If your platform has funds and they're not punitively charged (as they are on Hargreaves Lansdown) then I'd go for the global HSBC fund. Thanks, Ramin
@@PensioncraftBrilliant, thanks.
I looked at one of these ETFs (LSE:PRIW), on my trading platform. In the Key Facts document it talked about an entry fee of 3% and an exit fee of 3%. In your discussion on fees, you did not talk about this. Do they really charge these fees or is there something I'm misunderstanding? These fees would make the annual fees a little immaterial.
These fees don't apply if you're trading through a platform
Hello
Stock WE ; we work 0.20
Look the move tmrw is making massive move
So this means you omit EM from the core of your portfolio completely?
That's what i am wondering too, and UK??!
Has helped me out
Glad you found it helpful @henryterranauta9100
Interesting how the FCA allow the government access to bitcoin etf's but not retail investors!!! I wonder why that is? And it's not investor protection:-)
Is invest engine a good option
Hi Ramin great video. I am rather new to investing. I am 50 years old for my sins and I have just started investing into ETFs using Trading 212 and have bought some ISA S&P 500 acc. I am thinking of long term investment for min 15 years. I live in the UK as well. What are your thoughts?
By the way it’s with Vanguard.
Invesco FTSE All World is above 100m AUM now......great product!
$128m now - edit $206M now
VWRL Gang
You get interest in ISA too
VUAG
Or you could do a market cap weighted ETF where you buy all the ETF in proportion to the market cap of the ETFs. So it would be about 32% SP500 index fund and the rest would be made up of the others.
Thanks for your tip regarding the conversion. I was wondering why I was being changed £200 per conversion on my SIPP when buying stocks worth £30k. Will buy the UK registered company now instead
the real meta is holding vanguard ETFs on platforms with capped fees for holding ETFs ;)
I like SPYD
I have no idea what I'm doing and I haven't got time to spend learning much. A simple set and leave is what I need so I've put my private pension into ftse all world ex uk based on this recommendation as I'm limited to vanguard.
I've also got an nhs pension and a few BTLs. If I can semi retire from nhs at 55 in 20 years and let my nhs pension mature that would be wonderful. Nhs is a good pension if you plan on working till 68 and living until 90.
Trading 212 is the way to go!
Does it offer managed portfolios like Investengine?
iShares MSCI World Small Cap UCITS ETF all in
What’s wrong with vwrl?
You need to work on the angry face Ramin 😆
😂😠
Ramin which platform is best to buy these fund HL does not have some of them ?
Thanks Russell
Use the etf ones to avoid HL's platform fees.
Stock => sp500 and Nasdaq, the rest it's just for playing
Here’s the dilemma though:
As you rightly say these global equity funds all track each other pretty closely. So we could be looking at the global fund you mention or the S&P500 and see similar recent pattern of growth driven disproportionately by a tiny cluster of US tech giants (Apple, NVIDA, Microsoft, et al). And that recent growth driven largely by uninformed hype around AI. So you have to ask yourself if we are looking at a bubble driven by hype, or the start or a longer term period of growth which will be sustained over the medium to long term and where those AI technologies actually result in increased revenues. The price to earnings ratios of companies like NVIDA are also at unprecedented highs. So what would be your strategy if wanted the same simple set and forget strategy, but also to hedge against this bubble imploding?
Good point on PE ratios.
VTI or VOO