Global/World choices

Having a bit of a New Year review/rebalance. My gut feeling was one of ‘underwhelming’ re VWRL as a global option. I’ll dig a bit further but if anyone would care to chip in re other options…

I for one don’t think these world funds are all that great in general because in my opinion you have this fund with a handful of good performing companies; usually the top 10 or 20 or similar holdings, but then you have a thousand other mediocre companies dragging everyone else down.

Having said that I have to confess that I do also have VWRL in my portfolio.

I like dividends so VHYL is a better option for me even though VWRL’s performance is a wee bit better compared with VHYL

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Hi, what do you mean by ‘underwhelming’, please? Share price gains, dividends…?

but then you have a thousand other mediocre companies dragging everyone else down.<

Yeps, that happens in index-tracking ETF’s.

The alternative would be to look at the composition of this ETF and then see if you can find a number of individual ETF’s to replicate this one.

Snapshot is from Vanguard UK today

But… as these other ETF’s are probably going to be index-tracking ETF’s themselves you may have the same problem again but it’ll cost you more as you’re holding more ETF’s now.

And at that point you may be trying to find single stock ETF’s or investment trusts or funds (unit trusts) and suddenly you’re way beyond “just” holding low-cost ETF’s.

I think the main question to ask in the beginning is what you want to achieve:

  1. market returns minus costs - in which case VWRL (pays dividends) or VWRP (same ETF but accumulation) are just fine or

  2. trying to beat the market - in which case you can’t rely on index-tracking ETF’s

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Thanks for your reply. The link in my original post doesn’t work properly but in short: Expense ratio 0.22% Dividend yield 1.69% (as per Stock Events).

Hi Omian,
I always find this a good place to start

When you follow the link you’ll find a list of 8 ETF’s

After disregarding 2 ETF’s which don’t show a yield at all, the 2 ETF’s from Invesco, and another 4 ETF’s which are for subsets, like ESG and Infrastructure, you’re left with 2 ETF’s.

One of which is VWRL, which you already hold
VWRL (Vanguard Asset Management | Personal Investing in the UK) / VWRP (Vanguard Asset Management | Personal Investing in the UK)

and the other one is:

FTSE Developed World UCITS ETF (VEVE) (Vanguard Asset Management | Personal Investing in the UK) / VHVG (Vanguard Asset Management | Personal Investing in the UK)

However FTSE Developed World doesn’t include Emerging Markets so you need to account for that maybe by using FTSE Emerging Markets UCITS ETF (VFEM) (Vanguard Asset Management | Personal Investing in the UK) / VFEG (Vanguard Asset Management | Personal Investing in the UK).

And if you do then you have now 2 ETF’s instead of 1 ETF and are paying 2 sets of fees instead of 1x fees.

Hi Omian,
You can, of course, look at it from a different point of view… look for dividends.

If you follow the link you’re finding a list of 75 ETF’s, sorted by dividend yield in descending order for

Region: World
Use of profit: Distributing

with no selection of index (FTSE or MSCI etc.) or provider (FTSE or S&P etc.)

The screenshot shows the first 9 ETF’s.

What do you see?

All of these ETF’s do have a higher yield than VWRL but they also come with very much higher costs and are all very much smaller than VWRL.

Also, all of these ETF’s are for subsets of All-World

As always, do your own research (dyor).

Best of luck.

Hi, if cost of World funds is a concern :-

  • Invesco FWRG tracks the same index as VWRL but is Accumulating and charge 0.15%. No dividends to bother about, but if you are after dividends specifically an All-World probably isn’t first choice, as already mentioned.

  • Amundi PRIW if you don’t mind reinvesting dividends yourself as it is Distributing. Charge 0.09% but is Developed World only, so you’d need an EM fund too if you want to replicate the All World.