ETF in Focus

HSBC MSCI World

Stockmarket ticker: HMWO
Sector: Global equities
Total expense ratio: 0.15% p.a.

What does it invest in?
HSBC MSCI World ETF invests in the shares of more than 1,400 companies from a wide range of developed countries, with the aim of tracking the performance of the MSCI World index. Among its biggest holdings are US tech giants such as Apple, Amazon and Tesla.

Why would you consider it for your portfolio?
It’s a low-cost way to get exposure to developed stock markets globally via the widely-followed MSCI World index. About two-thirds of the ETF is in US shares and most of its biggest holdings are US companies. Information Technology is the most widely held business sector. HSBC MSCI World is a very large ETF with a track record of more than 10 years.

Does it pay an income?
HSBC MSCI World distributes income quarterly and has a dividend yield of 1.34%.

How has it performed?
The ETF is up 48.4% over the past 5 years in £ terms with dividends reinvested (As at 20/06/22 Bloomberg ). Please note, past performance is not necessarily a reliable indicator of future performance.

You can invest in HSBC MSCI World ETF via InvestEngine’s commission-free DIY platform

Has this ETF made an appearance in your portfolio?

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Yes, though the performances have not been so exciting so far due to this general bearish situation.

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iShares UK Dividend

Stockmarket ticker: IUKD
Sector: UK equities
Total expense ratio: 0.4% p.a.

What does it invest in?
iShares UK Dividend ETF invests in the shares of 50 UK companies that pay high dividends, and aims to track the performance of the FTSE UK Dividend+ index. The ETF’s biggest holdings include tobacco firms Imperial Brands and British American Tobacco (BAT), as well as Vodafone, Legal & General and BP. Overall, the biggest sector weighting in the ETF is financial companies, particularly insurers and investment managers.

Why would you consider it for your portfolio?
It offers a high income yield (6.4% a year*) along with the potential for capital growth from a portfolio of UK companies, many of them big, well-known names. iShares UK Dividend is a substantial ETF with a track record of more than 15 years.

How often does it pay out income?
iShares UK Dividend distributes its income quarterly.

How has it performed?
The ETF is up 5.6% over the past 5 years including dividends.

You can invest in iShares UK Dividend ETF via InvestEngine’s commission-free DIY platform

Has this ETF made an appearance in your investment portfolio? If so, are you happy with it?

*As at 1/8/22, Bloomberg data

When investing your capital is at risk. Please note, past performance is not necessarily a reliable indicator of future performance.

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Xtrackers Global Inflation‑Linked Bond ETF

Stockmarket ticker: XGIU
Sector: Government bonds
Total expense ratio: 0.2% p.a.

What does it invest in?
Xtrackers Global Inflation‑Linked Bond ETF invests in inflation-linked bonds issued by governments of developed markets, including the US, UK, France and others.

The ETF has more than 150 bond holdings and its biggest weighting is in US government ‘Tips’ (Treasury Inflation Protected Securities).

Why would you consider it for your portfolio?
Inflation-linked bonds are designed to provide protection against rising inflation, with their value changing in line with the consumer price index. However, they generally have low income yields and bond prices can be hit hard by rising interest rates. Many inflation-linked bond ETFs, including this Xtrackers’ fund, lost money in the first half of 2022.

Even so, bond ETFs like Xtrackers Global Inflation-Linked Bond could be worth considering as a way of spreading risk in a portfolio of equity ETFs.

Does it pay out income?
No, as an accumulating ETF, Xtrackers Global Inflation‑Linked Bond automatically reinvests the interest income it earns from its portfolio holdings.

How has it performed?
The ETF is up 14.3% over the past 5 years including all income (as at 9/8/22, Bloomberg data). Please note, past performance is not necessarily a reliable indicator of future performance.

You can invest in Xtrackers Global Inflation-LInked Bond ETF via InvestEngine’s commission-free DIY platform

Has this ETF made an appearance in your investment portfolio? If so, are you happy with it?

When investing your capital is at risk.