Vanguard index tracker funds
Discussion
Available on a Unit Trust, or Exchange Traded Fund basis.
Fees are slightly different (unit trust being lower), athough presumably performance would be very similar.
ETF pricing changes during trading hours, whereas the Unit Trust versions have prices set once each day.
If held for a long time, I don't think the ETF constant pricing is going to be any advantage.
What are the benefits of selecting either one, or the other?
cant answer specifically, but as these are aimed at mid to long term investing does it matter?
I would concentrate on the related fees. I've moved away from Vanguard as other platforms are a bit cheaper depending on what ETF you are looking at (eg InvestEngine).
I would concentrate on the related fees. I've moved away from Vanguard as other platforms are a bit cheaper depending on what ETF you are looking at (eg InvestEngine).
Edited by superpp on Tuesday 13th August 14:00
https://monevator.com/etfs-vs-index-funds-differen...
This provides a good summary.
I think in practical terms there is very little difference for most investors
This provides a good summary.
I think in practical terms there is very little difference for most investors
It will depend how much you hold or want to and who you hold them with.
Depending on your broker you don't normally pay dealing fees on an index fund buy or sell but you do with an ETF.
The charges to hold can vary too. If for example you were to be using HL then the annual fee is capped for ETFs but not for index funds.
https://www.hl.co.uk/news/index-funds-vs-etfs-what...
Thank you for your replies.
Helpful.
I don't use trackers myself, because I have been fortunate to beat the market most years.
However, it is a different matter when it comes to helping my family with their own money, so a basic starting structure is best (for them and me). Separately in addition, an equity portfolio can gradually be constructed.
In the future, hopefully they will find it interesting to compare the different performance results and also be learning about the practicalities of business investment.
rossub said:
Oh look, its Boastfull Jon back again
You could call it attempting to encourage others, to think about serious investment.
I know so many, who just put all their savings into building society accounts.
Do they think that investing in businesses, is only for wealthy people?
Most investors 'start from scratch'. My first shareholding cost about £160.
If you don't try, then unfortunately saving in cash, or cash equivalents, is guaranteed in the long-term to lose money.
Have you heard anyone say, "I don't want to invest yet, because it is not the right time".
Warren Buffett gave the perfect explanation for that mistake.
"In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497."
Think about it. - How could anyone have lost money over that period?
Well the answer is, they kept 'dancing' in and out of the market.
( rossub - your spell checker requires a refresh. )
Jon39 said:
You could call it attempting to encourage others, to think about serious investment.
I know so many, who just put all their savings into building society accounts.
Do they think that investing in businesses, is only for wealthy people?
Most investors 'start from scratch'. My first shareholding cost about £160.
If you don't try, then unfortunately saving in cash, or cash equivalents, is guaranteed in the long-term to lose money.
Have you heard anyone say, "I don't want to invest yet, because it is not the right time".
Warren Buffett gave the perfect explanation for that mistake.
"In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497."
Think about it. - How could anyone have lost money over that period?
Well the answer is, they kept 'dancing' in and out of the market.
( rossub - your spell checker requires a refresh. )
A bit more humble goes a long way - nobody likes a brag.
Jon39 said:
rossub said:
Oh look, its Boastfull Jon back again
You could call it attempting to encourage others, to think about serious investment.
I know so many, who just put all their savings into building society accounts.
Do they think that investing in businesses, is only for wealthy people?
Most investors 'start from scratch'. My first shareholding cost about £160.
If you don't try, then unfortunately saving in cash, or cash equivalents, is guaranteed in the long-term to lose money.
Have you heard anyone say, "I don't want to invest yet, because it is not the right time".
Warren Buffett gave the perfect explanation for that mistake.
"In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497."
Think about it. - How could anyone have lost money over that period?
Well the answer is, they kept 'dancing' in and out of the market.
( rossub - your spell checker requires a refresh. )
Funny folks on here. Jon's done well and Iikes to share ideas on equity investments. The response is to put him down.
Back on topic: I don't know much about the unit trusts. I do have investments in their ETF offerings. I am in the Life Strategy bucket but there has been criticism about the bias to UK so you could do it separately e.g S&P500, Europe ex UK, then do a separate sum in FTSE100.
I do like their website where it is clear to see in the portfolio data where the biggest individual stock investments are. But for day-to-day view of the markets I find HL website better.
Back on topic: I don't know much about the unit trusts. I do have investments in their ETF offerings. I am in the Life Strategy bucket but there has been criticism about the bias to UK so you could do it separately e.g S&P500, Europe ex UK, then do a separate sum in FTSE100.
I do like their website where it is clear to see in the portfolio data where the biggest individual stock investments are. But for day-to-day view of the markets I find HL website better.
dingg said:
Jon 39
How would have an sp500 tracker compared against your stock pick investments over the same time frame.
Have you done a comparison or, are you able to.
Genuinely interested in whether you would have beat the market or not.
Tia if you can answer
How would have an sp500 tracker compared against your stock pick investments over the same time frame.
Have you done a comparison or, are you able to.
Genuinely interested in whether you would have beat the market or not.
Tia if you can answer
A very good question Grant, because the answer is that anyone who has invested in the broad US equity market, has done fantastically well during recent years.
The UK market which I favour has trailed well behind. We always need to remember though, that many of the large FTSE 100 companies are not dependent on the British economy, because they are international busineses.
My rather vague knowledge of the US indices, is that they are now heavily dominated by the few highly valued companies. Should there be concerns about a car manufacturer that is valued at 60 times earnings? Normally one would expect that future profits need to increase enormously to justify a 60 times rating.
It is interesting that the US economy has since the beginning, been a remarkable powerhouse and during the past 30 years, US companies have become world leaders in the evolving tech sector. In the 1990s 'dot com' bubble, we had the chance to invest in the new industry. The problem being of the huge number of hopeful startups, so many went bust. Hindsight now tells us which ones were enormously successful.
As I always say, we never know what is going to happen in equity markets, but being long-term and patient has usually been the best way. Probably the worst period might have been 1929 to about 1950. It took that long for markets to regain the previous high point.
Fingers crossed that doesn't repeat any time soon.
The S&P 500 now has the P/E at 29. Is that too high? I don't know. We will only be able to tell sometime in the future.
leef44 said:
Funny folks on here. Jon's done well and Iikes to share ideas on equity investments. The response is to put him down.
Jon stock picked and it worked out for him due to world events. His crystal ball isn’t any bigger than anyone else’s.What he doesn’t do is advocate stock picking and what to pick to anyone else, for which he does deserve credit.
I’m not the only one to pick up on the bragging element and if that were toned down, his posts would be much more welcome.
Jon39 said:
A very good question Grant, because the answer is that anyone who has invested in the broad US equity market, has done fantastically well during recent years.
The UK market which I favour has trailed well behind. We always need to remember though, that many of the large FTSE 100 companies are not dependent on the British economy, because they are international busineses.
My rather vague knowledge of the US indices, is that they are now heavily dominated by the few highly valued companies. Should there be concerns about a car manufacturer that is valued at 60 times earnings? Normally one would expect that future profits need to increase enormously to justify a 60 times rating.
It is interesting that the US economy has since the beginning, been a remarkable powerhouse and during the past 30 years, US companies have become world leaders in the evolving tech sector. In the 1990s 'dot com' bubble, we had the chance to invest in the new industry. The problem being of the huge number of hopeful startups, so many went bust. Hindsight now tells us which ones were enormously successful.
As I always say, we never know what is going to happen in equity markets, but being long-term and patient has usually been the best way. Probably the worst period might have been 1929 to about 1950. It took that long for markets to regain the previous high point.
Fingers crossed that doesn't repeat any time soon.
The S&P 500 now has the P/E at 29. Is that too high? I don't know. We will only be able to tell sometime in the future.
Were you employed in the political arena by any chance?
I reckon the sp500 would have most likely trumped your returns, guess we'll never know for sure though.
Never mind, good luck for the rest of the year
leef44 said:
Funny folks on here. Jon's done well and Iikes to share ideas on equity investments. The response is to put him down.
Back on topic: I don't know much about the unit trusts. I do have investments in their ETF offerings. I am in the Life Strategy bucket but there has been criticism about the bias to UK so you could do it separately e.g S&P500, Europe ex UK, then do a separate sum in FTSE100.
I do like their website where it is clear to see in the portfolio data where the biggest individual stock investments are. But for day-to-day view of the markets I find HL website better.
Back on topic: I don't know much about the unit trusts. I do have investments in their ETF offerings. I am in the Life Strategy bucket but there has been criticism about the bias to UK so you could do it separately e.g S&P500, Europe ex UK, then do a separate sum in FTSE100.
I do like their website where it is clear to see in the portfolio data where the biggest individual stock investments are. But for day-to-day view of the markets I find HL website better.
Thank you Frank.
My understanding now is that the ETF has continuous pricing (a traded asset) whereas the unit trust is valued just once a day.
Presumably it does not make any difference to long-term holders.
The unit trust version has marginally lower fees.
I have suggested that my daughter purchases monthly in her ISA (gets me off the hook if a crash happens) and I had thought both FTSE 100 and S&P 500 as you suggest. However, I am now uncertain about the high US value, so perhaps wait on that one (I know, never try to time the market
). She is building individual holdings as well, but the index will be a safer base structure.Fees are fees.
ETFs are tradable during market hours whilst OEICs are mostly valued daily (some will be less often).
I think FSCS protections can differ between OEICs and ETFs.
I'm not sure I'd be looking at an S&P product over a broad global tracker or depending on your daughters appetite for risk even a multi-asset fund.
Never have worked out why people seem to be so bothered by Tesla's valuation - it isn't even in the top 10 of the FTSE Global All Cap and could disappear tomorrow and barely make a dent.
ETFs are tradable during market hours whilst OEICs are mostly valued daily (some will be less often).
I think FSCS protections can differ between OEICs and ETFs.
I'm not sure I'd be looking at an S&P product over a broad global tracker or depending on your daughters appetite for risk even a multi-asset fund.
Never have worked out why people seem to be so bothered by Tesla's valuation - it isn't even in the top 10 of the FTSE Global All Cap and could disappear tomorrow and barely make a dent.
dingg said:
Thanks for the time you put in to the answer..
I reckon the sp500 would have most likely trumped your returns, guess we'll never know for sure though.
Never mind, good luck for the rest of the year
I reckon the sp500 would have most likely trumped your returns, guess we'll never know for sure though.
Never mind, good luck for the rest of the year
The S&P 500 has certainly trumped my returns recently, because I am in the UK market.
Thanks for the good luck, it does play a part in this 'game'.
One of the occasional unexpected uplifts has occurred, so if nothing moves up or down (unlikely) before the year end, that will do nicely for 2024.
dingg said:
Stewie
I still reckon an sp500 tracker would trump a ww indices tracker, USA stumbles, rest of the world stumbles deeper and takes longer to recover.
Difficult to back test and prove the theory though.
Historically it's closer than you'd think it's more the S&P has gone on an absolute tear the last decade or so and there's a lot of recency bias in investing.I still reckon an sp500 tracker would trump a ww indices tracker, USA stumbles, rest of the world stumbles deeper and takes longer to recover.
Difficult to back test and prove the theory though.
There have been long periods where the USA underperformed the rest of the world.
Just saying
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