S&P500 vs All World ETFs

Hi folks,
I’m a small long term investor so that I put money into ETF in “set-up and forget mentality”:slight_smile: I prefer buying accumulating ETFs, not the ones giving dividends.
I’m in between “all world global funds” and “S&P 500”. Why do people choose S&P 500 over all world Global funds (v.v.)? Because all world contains the companies in S&P500 mostly. Or do you guys buy both with different weights in portfolio? I focused on the lowest cost (TER) in each ETF but I’d like to get your opinions as well. I’m not looking for financial advisor. Just wanna hear your opinions if you were in my shoes to expand my ideas.

I’d appreciate if you’d kindly share your opinions, recommendations.

Additionally, which all world or S&P 500 do you usually go for?

ALL WORLD ETFs in my list.
1- Invesco FTSE All-World UCITS ETF Acc FWRG
2- Vanguard FTSE All-World UCITS ETF (USD) Accumulating VWRP
4- L&G Global Equity UCITS ETF LGGG

S&P 500
1- Invesco S&P 500 UCITS ETF SPXP
2- iShares Core S&P 500 UCITS ETF (Acc) CSP1
3- Xtrackers S&P 500 UCITS ETF 2C GBP hedged XDPG
4- Vanguard S&P 500 UCITS ETF (USD) Accumulating VUAG

Hi TravellerSeko,

I don’t have time to do a full reply at the moment, but just thought I’d point out a few things :blush:

In your list of all world ETFs, the L&G one is actually a developed markets only ETF and it has an ESG filter. There’s not much difference between the other 3, apart from that SSAC tracks the MSCI version of the FTSE All World. FWRG has the lowest TER at 0.15%, but it has a lower AUM and (i think) less favourable bid-offer spread. As the AUM builds up though, it may work out to be better than the Vanguard version due to the TER difference.

Regarding the S&P 500 ETFs:
SPXP is synthetic, which means it does not actually hold the underlying stocks. It delivers the returns through a swap agreement with a counterparty. This is beneficial in that it avoids the withholding tax on US stock dividends, which may lead to ever so slightly greater total returns in the long run. However, some people do not like synthetic ETFs due to the additional counterparty risk (there’s a lot of safety measures in place to reduce this risk, but it is still there to some extent no matter how small).

VUAG and CSP1 are identical apart from that one is offered by Vanguard and the other by BlackRock. They both have a 0.07% TER, physical replication, and will have very high AUMs.

XDPG is GBP hedged which means it is designed to limit currency risk (USD to GBP). It will outperform a standard S&P 500 ETF (VUAG/CSP1) when the pound strenghthens, but underperform when the pound weakens. In the long run, it has underperformed a standafd ETF quite sinlgnificantly. I personally don’t bother with hedging. You can see in the example below thay over the past 6 months? XDPG has performed slightly better due to the pound becoming slightly stronger. On the 5 year chart, it is a different story.

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If those 8 ETFs are the what your portfolio is composed of then you have created a complete mess (a pretty harmless mess though!)

No need for this complexity at all.

What are your weights?

Hi @Tom_Whitehead ,
Thanks million times. If this is not a full reply, then it would be tens of pages:) I’ll read over every details you mentioned to digest. I really appreciate it pal.

Hi @Josh ,
Mate you misunderstood it. I’ll pick only one ETF for investment from the one in that list. I just wanted to hear your opinions if you were in my shoes.

Fair enough.

Then any of the first three will do! Job done

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VUAG all-day everyday.

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Thanks mate for your advise.

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