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Vanguard global tracker
Mr Smith
Posted: 13 June 2018 09:25:00(UTC)
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I'm going to open an ISA with Vanguard and I'm looking to put the majority of this year's allowance into a low cost global tracker. There appear to be several global funds on offer and I'm a bit confused as to which one to go for.

Thanks in advance for any suggestions
Tim D
Posted: 13 June 2018 14:49:55(UTC)
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Assuming you're looking for straight market-cap weighted passive global exposure: these days, for me, the one to go for is the relatively new FTSE Global All Cap Index Fund. It (like its index) goes further down into the small&mid caps than the VWRL ETF does. Caveats would be that the fund size has been slow to grow (still only in the millions while VWRL is in the billions), and it trades as a fund rather than a liquid ETF (for long-term buy-and-hold I don't care). It is slightly cheaper... although at 0.24% vs 0.25% OCF you're not going to notice.

Other things might be of interest could be the Lifestrategy range if you wanted a bit of bond exposure too (for the sub-100% equity ones) and/or some "home bias" to the asset allocation. I know less about the actively managed smart-beta things Vanguard offer, or the "ex-UK" or "Developed World" global things (personally, I want my core global fund to have a piece of everything, not be missing some things out).
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Mr Smith on 13/06/2018(UTC)
Apostate
Posted: 13 June 2018 17:07:20(UTC)
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yes FTSE Global All Cap Index Fund is the one. If you want an ETF then there's VWRL but it is distributing rather than accumulating and AFAIK Vanguard's platform does not provide automatic reinvestment of dividends.

there's also FTSE Developed World ex UK which as the name suggests has different constituents but is likely to perform very similarly.
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Tim D on 13/06/2018(UTC)
Malcolm Beaton
Posted: 13 June 2018 18:20:57(UTC)
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Remember the Bond part of your Portfolio
I have been using the Vanguard Global Bond Index Tracker(hedged to the pound) (VIGBBD) for 8 years now
Cheap and fire and forget
Along with a Global Equity Tracker (any of the ones suggested above) makes life simple-2 Fund Portfolio
Asset Allocation ie how much in Equities and how much in Bonds is the big decision
xxd09
PS Personally I use the Vanguard Developed World ex UK (VVDVWE) and Vanguard FTSE U.K. AllShare Index(VVFUSI)
Both OEICS and use Acc(not Inc) version where Dividends are automatically reinvested
Global Tracker not available when I started out or I would have used it- may still move to it to make life simpler as I get older!
mark spurrier
Posted: 13 June 2018 20:02:25(UTC)
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Hi

I am not convinced that large scale passives are the way to go.

VWRL 3 Years Annualised 14.16
5 Years Annualised 13.19

FRCL 18.5 /16.87 3/5 year
bnkr 14.1/14.06
bgs 37/28
smt 27/28
FGT 13.75/14.98
Fundsmith 23/20


I only hold short duration bonds. I see no point in them. If it was 25 years ago I would be holding 25% today.......whats the point? Guaranteed capital losses.

The problem I see with global passives is that they have so many holdings - nothing really stands out and the current world position is rare.all markets and geographies growing. Usually something is in the dumps - an active can change the weighting BEFORE the passive is forced to react to a historical fact


Smaller/mid caps tend to outperform in the longer run v large caps...........cap weighted passives inversely select.

I am not against ETFs... I have some but I do like to really check out the index they are tracking.

You might want to look at the Global large Cap blend category on the Morningstar IT screener and the Global Small cap too and make your own
Tim D
Posted: 13 June 2018 21:42:25(UTC)
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But 5 years ago you probably wouldn't have picked those... something else was flavour of the month. Hindsight is wonderful. If I go on trustnet and plot IT Global vs FTSE World from 1/1/2013, they're pretty much equal... plot it from 1/1/2007 and FTSE World is ahead. (But OK plot it it from back in the 90s and IT Global is ahead.)

The thing about active managers being able to sidestep the duds is something much repeated by active management fans... but if they can do it, it's clearly not helping them actually beat the indices in aggregate; something borne out by the SPIVA scorecard data year after year (example).

Certainly agree with the mid-small cap thing though; if you want to dial-up your risk-reward level then adding an allocation to global small-cap seems a reasonable thing to do. Other factors are available too though (momentum, value, quality etc) and have been demonstrated to have some premium associated with them (if you can wait long enough).

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Mr Smith on 14/06/2018(UTC)
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