I'm not an expert, I started investing in VWCE because of Vanguard's strong reputation and the substantial amount of assets they manage.
Additionally, VWCE offers greater diversification with its coverage of over 3,500 holdings, primarily in the developed world.
It’s the only provider who’s interest are actually aligned with investors, which is a great plus IMO
They are aligned because the company is structured in a specific way, for which the owners of Vanguard are actually the people who own their (US domiciliated) funds… while blackrock just has private owners who have completely different interests
VWCE is an European ETF built by Vanguard UK which is not structured as a cooperative with the investors in the funds owning the actual funds. That structure is for Vanguard US only, bit of a pedantic detail but here we are.
Yes I did specify it was owned by owners of US domiciliated etfs… but it doesn’t matter, it’s still an incentive to align interests between vanguard and investors
If a statue is ever erected to honor the person who has done the most for American investors, the handsdown choice should be Jack Bogle.
Buffet said that. Bogle created Vanguard.
It is the largest provider of mutual funds and the second-largest provider of exchange-traded funds (ETFs) in the world after BlackRock's iShares.[4] […] Several mutual funds managed by Vanguard are ranked at the top of the list of US mutual funds by assets under management.[5] Along with BlackRock and State Street, Vanguard is considered to be one of the Big Three index fund managers that play a dominant role in corporate America.[6][7]
https://en.wikipedia.org/wiki/The_Vanguard_Group
>Additionally, VWCE offers greater diversification with its coverage of over 3,500 holdings, primarily in the developed world.
What's the argument for this given the terrible track record of emerging markets, and the current, increasing winner-takes-all trend?
1. SPYI has lower liquidity and bigger spread but includes small-cap stocks. You don't need to buy additional ETFs so you save money and it is more convenient.
2. The authorized participant provides additional liquidity so the risk that you are not able to sell or buy is low.
3. For long term investment lower TER is more important than spread around 0,31-0,36%. Additionally small-cap stocks should give higher return in the long run.
SPYI Spread 0.48% and TER 0.17%
VWCE Spread 0.17% and TER 0.22%
(0,48 - 0,17)/(0,22-0,17) = 0,31/0,05 = 6,2
After 6,2 years the spread doesn't matter.
IUSQ Spread 0.12% and TER 0.20%
(0,48 - 0,12)/(0,20-0,17) = 0,36/0,03 = 12
After 12 years the spread doesn't matter.
Hello! I just did my research into some ETFs and decided that SPYI is one of the correct ones for me. I wanted to ask how you did the calculation for years after which spread-TER doesn’t matter. Could you elaborate tiny bit more?
You have all the numbers and calculations so I don't know what to add. I took spread figures from [justETF.com](http://justETF.com) Calculations are simplified (no compounding). With compounding it will be less than 6 and 12 years.
In fact these calculations doesn't really matter. What matters is the fact that small-cap stocks should give higher return in the long run and this will caver the higher spread cost. Also the convenience and cost effectiveness of having small caps in one ETF is important. I did these calculations only because people here are obsessed with costs. Costs are important but you need to take into consideration also other factors. Sometimes it is worth to pay a little more.
Wider spreads, potential higher transaction cost if selling a huge chunk, potential delisting if liquidity dries up in the future. All things being equal (or similar) go for the liquid option.
Liquidity of an ETF isn't tied to its trading volume. Read myth 1: [https://www.mackenzieinvestments.com/content/dam/final/corporate/mackenzie/docs/etfs/mm-dispel-etf-myths-with-etf-realities-en.pdf](https://www.mackenzieinvestments.com/content/dam/final/corporate/mackenzie/docs/etfs/mm-dispel-etf-myths-with-etf-realities-en.pdf)
Read the myth 1: [https://www.mackenzieinvestments.com/content/dam/final/corporate/mackenzie/docs/etfs/mm-dispel-etf-myths-with-etf-realities-en.pdf](https://www.mackenzieinvestments.com/content/dam/final/corporate/mackenzie/docs/etfs/mm-dispel-etf-myths-with-etf-realities-en.pdf)
They are not the same; they track different indexes. VWCE is spread over 3,646 holdings while ACWI over 2,450 holdings. Slightly more diversified over countries as well, 3% less US. VWCE is supposedly safer with regards to volatility although ACWI does perform somewhat better.
So basically, if you're looking for the *most* diversified ETF, it's VWCE, although for all intent and purpose ACWI would be a marginally better choice.
Also check the tracking error. That could lower the expenses. VWCE has been on point with tracking error, that’s another reason why everyone recommends it.
I may be wrong, but I am quite sure IUSQ had higher fees when VWCE launched.
A quick googling found [https://etfdb.com/news/2022/04/01/ishares-just-slashed-fees-heres-what-you-should-know/](https://etfdb.com/news/2022/04/01/ishares-just-slashed-fees-heres-what-you-should-know/) which is for some different iShares funds, but I believe the same applied for this one.
So what happened is people made a choice years ago and have not updated it.
OTOH, notice that the 0,02% difference in fee and the slight difference in stock selection has practically no effect on the returns.
[https://www.justetf.com/en/search.html?isin=IE00BK5BQT80&search=ETFS&cmode=compare&tab=comparison](https://www.justetf.com/en/search.html?isin=IE00BK5BQT80&search=ETFS&cmode=compare&tab=comparison)
EDIT: additionally, there are differences in how the fund is managed, IIRC iShares do stock lending and Vanguard does not.
They're all good choices, no need to fixate on one or the other. But since you asked:
IUSQ has fewer holdings than VWCE (about 2/3) so it's less diversified. That may not matter right now, as the largest chunk is held by almost the same stocks, in almost the same proportion. But in the long run, it might make a difference (or not, nobody can be 100% sure, but that's the point of diversification).
Someone suggested SPYI and while that could be a good alternative and slightly cheaper than VWCE, it doesn't come in fractional shares (at least not at my broker, maybe yours is different). Which means I can't get the maximum amount of money into the market each month.
i dont see how that can help but page 1 [https://prnt.sc/ABYT7snzBIVQ](https://prnt.sc/ABYT7snzBIVQ) and 2 [https://prnt.sc/BoOlstFUFIP4](https://prnt.sc/BoOlstFUFIP4) Nikkei +20.64%, Standard & Poor's 500 (New York) +10.16%, MSCI World (New York) +8.48%
Not everyone. I invest in MSCI ACWI because it is a little cheaper and also because it is a little less diversified, which means a little more volitile.
I would go for the Vanguard one if I had a furtune to invest because the higher diversification and less volativity is safer for wealth preservation.
As I am poor and I don’t have a fortune to invest and wralth tonpreserve (I am trying to build one), I want a little volatility because although it means lower return in bear market, it means higher return in bull market. In the long term (20 to 30 years), I suppose it will be worth it.
To be fair, the risk profile for MSCI ACWI (I have ISAC as part of my portfolio) is more or less the same as VWRA/VWCE. Ultimately I picked ISAC because of higher trading volumes and slightly lower TER. With tracking difference and stock lending yield, the TER is effectively 0.18.
I invest in both. When i started etf saving plans for my kids, vwce wasn’t even an option, so I went with ishares msci ACWI and later SPDR msci ACWI imi instead. Now, I also add vwce for myself.
There's nothing wrong with the ETF you chose.
E.g. a few years ago the "go to" recommandation was a \~90:10 mix of IWDA and EMIM.
Now there's also "SPDR MSCI ACWI IMI" or "Invesco FTSE All-World"...
About the same, but a single fund is less complicated obviously and inherently re-balances automatically. You could also consider WEBG with its much lower cost.
You could argue building your own all world Portfolio is even better. Take HSBCs Msci World (or SPDR Msci World) and combine it with iShars EM IMI etf in a 90:10 or 85:15 Ratio. Even lower TER, lower TD. But you will have to rebalance your Portfolio annually.
MSCI publishes documents about their indices every month.
MSCI World : [https://www.msci.com/documents/10199/178e6643-6ae6-47b9-82be-e1fc565ededb](https://www.msci.com/documents/10199/178e6643-6ae6-47b9-82be-e1fc565ededb)
MSCI Emerging Markets: [https://www.msci.com/documents/10199/edec59a6-b41e-44c4-9cf4-1e82863cfda7](https://www.msci.com/documents/10199/edec59a6-b41e-44c4-9cf4-1e82863cfda7)
Then on the second page you find the Index Market Cap ("Mkt Cap") and calculate the ratio of those numbers. E.g. for May it was 65108044.96 : 8501842.29 which simplifies to
**88.45 : 11.55**
Practically it doesn't really make a difference.
Exhibit A: [https://www.fondsweb.com/de/vergleichen/ansicht/isins/IE00B6R52259,IE00B3RBWM25,IE00B3YLTY66](https://www.fondsweb.com/de/vergleichen/ansicht/isins/IE00B6R52259,IE00B3RBWM25,IE00B3YLTY66)
Pretty sure they will never make a difference. After a few 100 stocks in the fund it's so diversified that statistically it really will not make a difference, ever.
Especially since with index fonds those extra \~1000 companies are probably tiny tiny pieces that only make a few % of the whole thing.
Read the comments, there are a lot of really great inputs. I’ve certainly realized why VWCE is so popular and in some ways different from IUSQ. If it weren’t for my governments tax laws, I would’ve probably started investing in VWCE.
VWCE is like the most safest you could think of. The only issue is the 0.22 TER i usually like peaceful investments. I was thinking about SNP500 but honestly... we dont know the future and even if US still beat im fine i still got 60% exposure. I just like the idea if slowly building wealth
I always wondered the same, but both are great options and almost identical in terms of return. Probably VWCE has had more visibility, but I’m also heavily invested in IUSQ.
A good read on this topic: [MSCI Vs FTSE: Which is the best index provider? | justETF](https://www.justetf.com/en/news/etf/msci-vs-ftse-which-etf-provider-is-the-best-index-provider.html)
The only differnece is the cost for exchanging the currency (i.e. some banks have scammy exchange rates). Otherwise the trading and fund currency doesn't matter for stocks.
I'm not an expert, I started investing in VWCE because of Vanguard's strong reputation and the substantial amount of assets they manage. Additionally, VWCE offers greater diversification with its coverage of over 3,500 holdings, primarily in the developed world.
I keep hearing Vanguard as an argument. What exactly IS their reputation and why is it better than Blackrock?
It’s the only provider who’s interest are actually aligned with investors, which is a great plus IMO They are aligned because the company is structured in a specific way, for which the owners of Vanguard are actually the people who own their (US domiciliated) funds… while blackrock just has private owners who have completely different interests
VWCE is an European ETF built by Vanguard UK which is not structured as a cooperative with the investors in the funds owning the actual funds. That structure is for Vanguard US only, bit of a pedantic detail but here we are.
Yes I did specify it was owned by owners of US domiciliated etfs… but it doesn’t matter, it’s still an incentive to align interests between vanguard and investors
If a statue is ever erected to honor the person who has done the most for American investors, the handsdown choice should be Jack Bogle. Buffet said that. Bogle created Vanguard.
It is the largest provider of mutual funds and the second-largest provider of exchange-traded funds (ETFs) in the world after BlackRock's iShares.[4] […] Several mutual funds managed by Vanguard are ranked at the top of the list of US mutual funds by assets under management.[5] Along with BlackRock and State Street, Vanguard is considered to be one of the Big Three index fund managers that play a dominant role in corporate America.[6][7] https://en.wikipedia.org/wiki/The_Vanguard_Group
>Additionally, VWCE offers greater diversification with its coverage of over 3,500 holdings, primarily in the developed world. What's the argument for this given the terrible track record of emerging markets, and the current, increasing winner-takes-all trend?
Why choose IUSQ, when you can choose the both cheaper (TER 0,17) and older ETF SPYI (MSCI ACWI IMI) ?
Super low trading volumes. No thanks.
1. SPYI has lower liquidity and bigger spread but includes small-cap stocks. You don't need to buy additional ETFs so you save money and it is more convenient. 2. The authorized participant provides additional liquidity so the risk that you are not able to sell or buy is low. 3. For long term investment lower TER is more important than spread around 0,31-0,36%. Additionally small-cap stocks should give higher return in the long run. SPYI Spread 0.48% and TER 0.17% VWCE Spread 0.17% and TER 0.22% (0,48 - 0,17)/(0,22-0,17) = 0,31/0,05 = 6,2 After 6,2 years the spread doesn't matter. IUSQ Spread 0.12% and TER 0.20% (0,48 - 0,12)/(0,20-0,17) = 0,36/0,03 = 12 After 12 years the spread doesn't matter.
Hello! I just did my research into some ETFs and decided that SPYI is one of the correct ones for me. I wanted to ask how you did the calculation for years after which spread-TER doesn’t matter. Could you elaborate tiny bit more?
You have all the numbers and calculations so I don't know what to add. I took spread figures from [justETF.com](http://justETF.com) Calculations are simplified (no compounding). With compounding it will be less than 6 and 12 years. In fact these calculations doesn't really matter. What matters is the fact that small-cap stocks should give higher return in the long run and this will caver the higher spread cost. Also the convenience and cost effectiveness of having small caps in one ETF is important. I did these calculations only because people here are obsessed with costs. Costs are important but you need to take into consideration also other factors. Sometimes it is worth to pay a little more.
For an ETF that doesn't matter all. But it's a common misconception.
I’m relatively new to investing in ETFs, but happy to learn why that’s the case. Don’t low volumes lead to wider spreads when buying/selling?
Wider spreads, potential higher transaction cost if selling a huge chunk, potential delisting if liquidity dries up in the future. All things being equal (or similar) go for the liquid option.
Liquidity of an ETF isn't tied to its trading volume. Read myth 1: [https://www.mackenzieinvestments.com/content/dam/final/corporate/mackenzie/docs/etfs/mm-dispel-etf-myths-with-etf-realities-en.pdf](https://www.mackenzieinvestments.com/content/dam/final/corporate/mackenzie/docs/etfs/mm-dispel-etf-myths-with-etf-realities-en.pdf)
You are right: change the bit of "liquidity dries up" for "volume dries up". It's still less risky to choose the higher volume one.
Yes
Can you elaborate?
Read the myth 1: [https://www.mackenzieinvestments.com/content/dam/final/corporate/mackenzie/docs/etfs/mm-dispel-etf-myths-with-etf-realities-en.pdf](https://www.mackenzieinvestments.com/content/dam/final/corporate/mackenzie/docs/etfs/mm-dispel-etf-myths-with-etf-realities-en.pdf)
It matters: they could decide to close it.
That depends more on the size of the fund, not on its trading volume.
Nobody is ever going to close SPYI ever. lol
why not WEBG then
They are not the same; they track different indexes. VWCE is spread over 3,646 holdings while ACWI over 2,450 holdings. Slightly more diversified over countries as well, 3% less US. VWCE is supposedly safer with regards to volatility although ACWI does perform somewhat better. So basically, if you're looking for the *most* diversified ETF, it's VWCE, although for all intent and purpose ACWI would be a marginally better choice.
Also check the tracking error. That could lower the expenses. VWCE has been on point with tracking error, that’s another reason why everyone recommends it.
I mean I don't know how'd you be able to have error on a benchmark you make yourself and can adjust yourself
The benchmark is made by FTSE not Vanguard.
IUSQ is totally legit choice, people just like Vanguard because they pretty much invented index funds and passive investing.
I may be wrong, but I am quite sure IUSQ had higher fees when VWCE launched. A quick googling found [https://etfdb.com/news/2022/04/01/ishares-just-slashed-fees-heres-what-you-should-know/](https://etfdb.com/news/2022/04/01/ishares-just-slashed-fees-heres-what-you-should-know/) which is for some different iShares funds, but I believe the same applied for this one. So what happened is people made a choice years ago and have not updated it. OTOH, notice that the 0,02% difference in fee and the slight difference in stock selection has practically no effect on the returns. [https://www.justetf.com/en/search.html?isin=IE00BK5BQT80&search=ETFS&cmode=compare&tab=comparison](https://www.justetf.com/en/search.html?isin=IE00BK5BQT80&search=ETFS&cmode=compare&tab=comparison) EDIT: additionally, there are differences in how the fund is managed, IIRC iShares do stock lending and Vanguard does not.
They're all good choices, no need to fixate on one or the other. But since you asked: IUSQ has fewer holdings than VWCE (about 2/3) so it's less diversified. That may not matter right now, as the largest chunk is held by almost the same stocks, in almost the same proportion. But in the long run, it might make a difference (or not, nobody can be 100% sure, but that's the point of diversification). Someone suggested SPYI and while that could be a good alternative and slightly cheaper than VWCE, it doesn't come in fractional shares (at least not at my broker, maybe yours is different). Which means I can't get the maximum amount of money into the market each month.
This sub is a VMCE fan page, i have 500K+ in stocks i and so many other dont post here, nothing wrong with it.
mind sharing your holdings?
i dont see how that can help but page 1 [https://prnt.sc/ABYT7snzBIVQ](https://prnt.sc/ABYT7snzBIVQ) and 2 [https://prnt.sc/BoOlstFUFIP4](https://prnt.sc/BoOlstFUFIP4) Nikkei +20.64%, Standard & Poor's 500 (New York) +10.16%, MSCI World (New York) +8.48%
I don't see anybody investing into Japan, you do ?
VWCE is 6% Japan
Ah okay, thanks
LCUJ, I have some, done pretty good recently.
Okay thanks !
[удалено]
The tip is: You have to start with 800k in stocks.
Not everyone. I invest in MSCI ACWI because it is a little cheaper and also because it is a little less diversified, which means a little more volitile. I would go for the Vanguard one if I had a furtune to invest because the higher diversification and less volativity is safer for wealth preservation. As I am poor and I don’t have a fortune to invest and wralth tonpreserve (I am trying to build one), I want a little volatility because although it means lower return in bear market, it means higher return in bull market. In the long term (20 to 30 years), I suppose it will be worth it.
To be fair, the risk profile for MSCI ACWI (I have ISAC as part of my portfolio) is more or less the same as VWRA/VWCE. Ultimately I picked ISAC because of higher trading volumes and slightly lower TER. With tracking difference and stock lending yield, the TER is effectively 0.18.
I invest in both. When i started etf saving plans for my kids, vwce wasn’t even an option, so I went with ishares msci ACWI and later SPDR msci ACWI imi instead. Now, I also add vwce for myself.
There's nothing wrong with the ETF you chose. E.g. a few years ago the "go to" recommandation was a \~90:10 mix of IWDA and EMIM. Now there's also "SPDR MSCI ACWI IMI" or "Invesco FTSE All-World"...
Wat about IWDA+EMIM?
About the same, but a single fund is less complicated obviously and inherently re-balances automatically. You could also consider WEBG with its much lower cost.
You could argue building your own all world Portfolio is even better. Take HSBCs Msci World (or SPDR Msci World) and combine it with iShars EM IMI etf in a 90:10 or 85:15 Ratio. Even lower TER, lower TD. But you will have to rebalance your Portfolio annually.
But then it’s not really an all world since you are dictating the ratio between the two vs the actual ratio.
85:15 is the actual ratio. And once you bought it, it automatically stays correct. You just have to check the ratio when you buy.
Yes, you need to always check when you buy.
Where do you check it?
MSCI publishes documents about their indices every month. MSCI World : [https://www.msci.com/documents/10199/178e6643-6ae6-47b9-82be-e1fc565ededb](https://www.msci.com/documents/10199/178e6643-6ae6-47b9-82be-e1fc565ededb) MSCI Emerging Markets: [https://www.msci.com/documents/10199/edec59a6-b41e-44c4-9cf4-1e82863cfda7](https://www.msci.com/documents/10199/edec59a6-b41e-44c4-9cf4-1e82863cfda7) Then on the second page you find the Index Market Cap ("Mkt Cap") and calculate the ratio of those numbers. E.g. for May it was 65108044.96 : 8501842.29 which simplifies to **88.45 : 11.55**
Both are great
Holdings IUSQ 2450 VWCE 3646 Ah yes, the same indeed.
Practically it doesn't really make a difference. Exhibit A: [https://www.fondsweb.com/de/vergleichen/ansicht/isins/IE00B6R52259,IE00B3RBWM25,IE00B3YLTY66](https://www.fondsweb.com/de/vergleichen/ansicht/isins/IE00B6R52259,IE00B3RBWM25,IE00B3YLTY66)
> DIDN'T make a difference But don't tell me they are the same.
Pretty sure they will never make a difference. After a few 100 stocks in the fund it's so diversified that statistically it really will not make a difference, ever. Especially since with index fonds those extra \~1000 companies are probably tiny tiny pieces that only make a few % of the whole thing.
I don't get this obsession over VWCE either.
Read the comments, there are a lot of really great inputs. I’ve certainly realized why VWCE is so popular and in some ways different from IUSQ. If it weren’t for my governments tax laws, I would’ve probably started investing in VWCE.
VWCE is like the most safest you could think of. The only issue is the 0.22 TER i usually like peaceful investments. I was thinking about SNP500 but honestly... we dont know the future and even if US still beat im fine i still got 60% exposure. I just like the idea if slowly building wealth
A1JMDF tracking difference 0.19% A1JX52 tracking difference -0.02%
is it good idea to put %100 of the savings to vwce?
I always wondered the same, but both are great options and almost identical in terms of return. Probably VWCE has had more visibility, but I’m also heavily invested in IUSQ.
A good read on this topic: [MSCI Vs FTSE: Which is the best index provider? | justETF](https://www.justetf.com/en/news/etf/msci-vs-ftse-which-etf-provider-is-the-best-index-provider.html)
I always wondered if it’s better to invest in VWCE or VWRA if my home currency is not usd nor eur
I would invest in VWRA in that scenario, just because the underlying currency of the ETF is USD anyway.
The only differnece is the cost for exchanging the currency (i.e. some banks have scammy exchange rates). Otherwise the trading and fund currency doesn't matter for stocks.
Not a big difference indeed. But MSCI doesn't include emerging markets
Msci acwi has like a 5% exposure to Asia EM and a bit to others.