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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..
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.
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.
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.
@@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!
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.
Hi @khtan5531 the fee for those funds is surprisingly high at 0.22% so there are now several cheaper alternatives with almost identical returns. Thanks, Ramin
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.
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!
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.
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.
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?
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.
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.
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.
@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.
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.
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'!
@@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.
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
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... 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?
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.
Anyone with Hargreaves Lansdown should stay clear of Funds and replace them with an equivalent ETF if investing in a SIPP or ISA. The fees are capped if only investing in shares or ETF but not with funds.
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 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
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.
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%)?
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.
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
I still want a Global ex-USA fund. I suppose you could construct such a fund using multiple funds, but that's just a hassle. Also, if you stick to one fund, you are less likely to fiddle with it (e.g. if one of your funds is performing better or worse than the others).
Agreed. If you have VUSA/IUSA then whats the point in having it duplicated in a global fund? I’d rather have a non US non UK fund that takes into account the best of European, Singapore, Australia, South Korea, Japan. But without having to go and get ETFs for each specific region.
11:40 With the FWRG Invesco FTSE All World Tracker (which the video says is for GBP), it's base currency is listed as USD so does that still incur foreign exchange fees for buying and selling or not? Thanks.
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.
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 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.
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
I know it's complicated but I think we need a video regarding EEA passporting. "Brexit led to the loss of the UK's EEA passporting rights, which in the coming years could mean the disruption of as much as 20 percent of the UK’s investment and capital markets revenue."
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.
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
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.
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.
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
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?
@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.
The reason to exclude UK is really because one needs to avoid the UK due to it's persistent underperformance which is not going to change any time soon, consider buying the market UK again if there are signs Brexit is going to get fixed.... untill then cherry pick if you are happy picking individual stocks.
There's always a bitter pro-EU person on every UK-related thread on YT. The FTSE 100, of course, hit ATHs this February - "despite Brexit" - and it has had higher dividends than the US, certainly miles better than the Nikkei in that regard. UK accumulation funds have been very kind to me over the years. You also avoid currency fluctuations One could quibble over the fees on some etfs, but it's really best to just buy the big dips and take profits from time to time. I think a bit of a trading mindset really, really helps with longterm investing too. If you think Brexit will be "fixed" then buying when low would be the right idea. If you think we're out of the EU for good then personally I think it's a bit narrow-minded to say that the UK economy will *never* adapt to being out, even if I agreed that Brexit was a bad thing, which is an unbelievably tiresome debate that never seems to end - people are too entrenched one way or the other.
Remember that some underperformance due to Brexit may already be priced in. The question is, is such underperformance estimated correctly by the market or not? It could go both directions
@yt-mca Not in the UK. Vanguard ftse all world etf 0.22%, ftse dev world 0.12%. Just S&P 500 eft is 0.07%, but that doesn't offer enough diversification on its own
Lots of angry Vanguard U.K. customer faces let down by Vanguard U.K. not performing, not delivering, not executing, performing poorly to the best description and with one aim steering the customers away from Vanguard platform!
Why not performing. I use Vanguard sipp and no problems with customer service. And the 0.15% platform fee is cheap enough. And the index funds appear to track their indexes efficiently. If its not performing for you that could be that your choice of funds isn't good, or your strategy not good, or maybe you aren't using, sticking to a sensible ongoing strategy, buy and hold, don't tinker with your portfolio. The only things I don't like about vanguard UK are no automatic reinvestment of dividends, income, no Acc versions of their own etfs on their platform, not possible to buy fractional shares of the etfs, again only on their own platform. Also as Ramin says no cheap open ended ftse all world index fund with Acc and Inc versions, or even a cheap msci index fund, or ftse dev world. Just etfs in Distribution versions, which aren't really suitable for pound cost averaging anyway
@@Black-Circle Does invest engine offer any index funds or just etfs. Also automatic dividend, income reinvestment and fractional shares of etfs. Is it good for pound cost averaging, monthly investing
Very informative. I am in Europe and have GBP in case I ever decide to go back (same for my daughter) but finding it difficult to decide on a high-quality euro-denominated world tracker incl. UK and EM. Would be fabulous if you did a video for us European residents! There are lots of us Ramin....
Looking at returns over a long period covering different monetary systems - including a fixed gold standard - is misleading. Over the last 20 years gold has outperformed the UK & US stock markets. As long as we have the current fiat monetary system with more QE and inflation I expect gold to continue and accelerate its out-performance. A 20-year outlook is much more relevant to investors than a 150-year outlook.
With ETFs there are US, Euro, GBP versions, you just need to see what the index is that the ETF tracks, eg MSCI World, and find one listed on your local exchange.
VWRL is all world including emerging markets but is income distributing rather than accumulation. However Vanguard have recently launched on their UK platform an identical accumulation version ETF called VWRP.. Identical ETF other than VWRL is income and VWRP is accumulation.
This might be too political a point for this channel, but... Might it not also be worth trying to persuade the Vanguards of this world to let the people who hold, for example, their global index funds, to have a proportional voting share in the companies they own?! This could be done through their websites, with a default, middle-of-road position held by those who aren't interested. Instead of all the power lying in the hands of the fund managers / Larry Finks of this world?! Not that I'd be expecting this to happen in a world where banks control governments.
Exists areas where voting doesn't bring smart decisions. The main quality of of the successful trader is to go against majority and greed and fear. Vanguard maybe worse form of investing but there aren't better. Maybe DEFI in the future?
Thats all US. Not diversified enough going forward. Ramin is pointing out the value and risk management of a global fund. The US is in for a rough decade.
