World Equity ETFs Paying Dividends in GBP

[CleverClogs]

I'm looking for a global/world equity distributing ETF which is UK listed and so can be purchased in GBP (that is the easy bit)...
and also pays dividends in GBP (Interactive Investor exchange rates are poor), yet so far I have been unable to
find any at all. I should say I am not looking for a Hedged fund and would only consider those with fees in the low range.

The one I have currently, HMWO, pays divs. in USD, as so it appears do all the others I have looked into.

Have I missed any? Do you have any suggestions please?

(if there are none, I may consider Unit Trust option)

[tjh290633]

I'm looking for a global/world equity distributing ETF which is UK listed and so can be purchased in GBP (that is the easy bit)...
and also pays dividends in GBP (Interactive Investor exchange rates are poor), yet so far I have been unable to
find any at all. I should say I am not looking for a Hedged fund and would only consider those with fees in the low range.

The one I have currently, HMWO, pays divs. in USD, as so it appears do all the others I have looked into.

Have I missed any? Do you have any suggestions please?

(if there are none, I may consider Unit Trust option)

You could look at the big global ITs, like FCIT or Alliance. Certainly better than an OEIC. Consistent increases in dividends over many, many years.

TJH

[EthicsGradient]

You could also look at an OEIC - https://monevator.com/low-cost-index-trackers/ lists HSBC FTSE All-World Index Fund C (GB00BMJJJF91) as 0.13% OCF (and 0.02% transaction costs, though how accurate those are still isn't clear).

[DrFfybes]

I couldn't find an ETF when I was looking, but I did find a quite similar Fund.
HSBC FTSE All World ISIN GB00BMJJJG09 tracks VWRL and VEVE as near as dammit - I switch between them if/when I need to use some CGT allowance.

Paul

[richfool]

I'm looking for a global/world equity distributing ETF which is UK listed and so can be purchased in GBP (that is the easy bit)...
and also pays dividends in GBP (Interactive Investor exchange rates are poor), yet so far I have been unable to
find any at all. I should say I am not looking for a Hedged fund and would only consider those with fees in the low range.

The one I have currently, HMWO, pays divs. in USD, as so it appears do all the others I have looked into.

Have I missed any? Do you have any suggestions please?

I couldn't find an ETF when I was looking, but I did find a quite similar Fund.
HSBC FTSE All World ISIN GB00BMJJJG09 tracks VWRL and VEVE as near as dammit - I switch between them if/when I need to use some CGT allowance.

Paul

Yes, there are many. Your starters (all distribute dividends):

VEVE - Developed World
VWRL - Whole World
VHYL - Whole World - higher yield.

[TedSwippet]

You could also look at an OEIC - https://monevator.com/low-cost-index-trackers/ lists HSBC FTSE All-World Index Fund C (GB00BMJJJF91) as 0.13% OCF (and 0.02% transaction costs, though how accurate those are still isn't clear).

I couldn't find an ETF when I was looking, but I did find a quite similar Fund.
HSBC FTSE All World ISIN GB00BMJJJG09 tracks VWRL and VEVE as near as dammit - I switch between them if/when I need to use some CGT allowance.

Although, if the OP is investing through Hargreaves Lansdown, the 0.45%/year added platform fee merely for the privilege of holding funds rather than ETFs will completely swamp any forex drag on ETF dividends. Ditto for AJ Bell, though to a slightly lesser extent, 0.25%.

Personally, I use IWeb/HSDL. No egregious charges merely for holding OEICs rather than ETFs. And yes, this and other HSBC class C tracker OEICs are consistently good options.

[kempiejon]

Yes, there are many. Your starters (all distribute dividends):

VEVE - Developed World
VWRL - Whole World
VHYL - Whole World - higher yield.

I hold VWRL and get paid in dollhars in AJ Bell. I hold VEVE in Halifax where the same is true, both are ISAs and get converted into GBP.

[EthicsGradient]

You could also look at an OEIC - https://monevator.com/low-cost-index-trackers/ lists HSBC FTSE All-World Index Fund C (GB00BMJJJF91) as 0.13% OCF (and 0.02% transaction costs, though how accurate those are still isn't clear).

I couldn't find an ETF when I was looking, but I did find a quite similar Fund.
HSBC FTSE All World ISIN GB00BMJJJG09 tracks VWRL and VEVE as near as dammit - I switch between them if/when I need to use some CGT allowance.

Although, if the OP is investing through Hargreaves Lansdown, the 0.45%/year added platform fee merely for the privilege of holding funds rather than ETFs will completely swamp any forex drag on ETF dividends. Ditto for AJ Bell, though to a slightly lesser extent, 0.25%.

Personally, I use IWeb/HSDL. No egregious charges merely for holding OEICs rather than ETFs. And yes, this and other HSBC class C tracker OEICs are consistently good options.

The OP implies that they're with ii, since it's ii's exchange charges they're not happy about. So for them, there isn't an extra platform percentage. But yes, iWeb could be the cheapest place to hold it (even if you buy once a month, their trading charge is still less than ii's monthly fee).

[TedSwippet]

The OP implies that they're with ii, since it's ii's exchange charges they're not happy about. So for them, there isn't an extra platform percentage.

Ah yes. Somehow I lost sight of that while typing. Sorry.

[DrFfybes]

I'm looking for a global/world equity distributing ETF which is UK listed and so can be purchased in GBP (that is the easy bit)...
and also pays dividends in GBP (Interactive Investor exchange rates are poor), yet so far I have been unable to
find any at all. I should say I am not looking for a Hedged fund and would only consider those with fees in the low range.

The one I have currently, HMWO, pays divs. in USD, as so it appears do all the others I have looked into.

Have I missed any? Do you have any suggestions please?

I couldn't find an ETF when I was looking, but I did find a quite similar Fund.
HSBC FTSE All World ISIN GB00BMJJJG09 tracks VWRL and VEVE as near as dammit - I switch between them if/when I need to use some CGT allowance.

Paul

Yes, there are many. Your starters (all distribute dividends):

VEVE - Developed World
VWRL - Whole World
VHYL - Whole World - higher yield.

Yebbut the OP wants ones that pay divis in GBP. Certainly in my ii accounts the Vanguard ones all pay in USD and are converted by ii in our ISAs and SIPPs at their exchange rate. TBH I haven't looked into the exchange rate aspect, perhaps I should as the Vanguard ETFs pay me several £k per year in divis.

Paul

[richfool]

Yes, there are many. Your starters (all distribute dividends):

VEVE - Developed World
VWRL - Whole World
VHYL - Whole World - higher yield.

Yebbut the OP wants ones that pay divis in GBP. Certainly in my ii accounts the Vanguard ones all pay in USD and are converted by ii in our ISAs and SIPPs at their exchange rate. TBH I haven't looked into the exchange rate aspect, perhaps I should as the Vanguard ETFs pay me several £k per year in divis.

Paul

As the ETF's are priced in sterling and the dividends arrive in my ISA in sterling, I hadn't realised that some may actually pay the divis in USD's. Apologies if I misled anyone.

(I hold: VEVE and VUSA).

[Dod101]

Not sure that I understand the concerns about currency exchange. The fact is that if you are investing in a world tracker whether it is an ETF. an OEIC or an IT you are going to have currency conversions all over the place , although most take place behind the scenes so the investor is not aware of them.

Dod

[scrumpyjack]

Not sure that I understand the concerns about currency exchange. The fact is that if you are investing in a world tracker whether it is an ETF. an OEIC or an IT you are going to have currency conversions all over the place , although most take place behind the scenes so the investor is not aware of them.

Dod

But it is only the retail investor that gets screwed for 1% to 1.5% on every dividend. Currency exchange costs with Vanguard or Ishares will be minimal.

Alternatively find a platform that lets you have a dollar cash account or has low forex charges. It does irritate me that HL grab such an unjustified margin on every VWRL divi I get.

[kempiejon]

AJ Bell only want 0.5%, I'll have to check towards the end of the month how good the exchange rate is but it looks OK> They only itemised the currency cost a few years ago and I complained that this was a new charge when I first noticed it, the nice people at AJB said nothing has changed except that the commission now gets its own line on the cash statement. That inspired me to check the dividend notes from my other brokers and the fees were there but tucked away. No doubt why richfool hadn't realised.

As the ETF's are priced in sterling and the dividends arrive in my ISA in sterling, I hadn't realised that some may actually pay the divis in USD's. Apologies if I misled anyone.

y

[GeoffF100]

VWRL has a historical dividend yield of 1.74% according to Vanguard. That is 174 basis points. The exchange rate drag from a 0.15% commission is 174*0.15/100 = 2.61 basis points. The OCF is 22 basis points. That is about 9 basis points more than 90% VEVE plus 10% VFEM, which to all intents and purposes is the same. You could save another 7 basis points by using PRIW in place of VEVE (Amundi has a super cheap replacement for VFEM too). On £1 million investment, 1 basis point is £100. You need to keep a sense of proportion here.

[DrFfybes]

But it is only the retail investor that gets screwed for 1% to 1.5% on every dividend. Currency exchange costs with Vanguard or Ishares will be minimal.

Alternatively find a platform that lets you have a dollar cash account or has low forex charges. It does irritate me that HL grab such an unjustified margin on every VWRL divi I get.

ii do let you keep the cash in dollars in a GIA, and only charge you if you convert. I tend to reinvest dollar divis into BRKB anyway, which requires some detailed record keeping when it comes to using HRMC's exchange rates when it comes to calculating CGT. Hmm, or does it? I've been manually converting each tansaction into sterling, but if I buy them in dollars and sell them in dollars then the gain is in dollars and the applicable exchange rate is on the date of sale, not that is used to be a £$£$%%£$ problem.. One for another board perhaps

[TedSwippet]

VWRL has a historical dividend yield of 1.74% according to Vanguard. That is 174 basis points. The exchange rate drag from a 0.15% 1.5% commission is 174*0.15/100 174*1.5/100 = 2.61 basis points.

Interactive Investor's forex charge is 1.5%. Right answer, but typos in the lead up?

Even on an LTA-sized pension, £250 or so per year isn't life changing, but on the other hand, it's better for you to have it than for the platform to have it, all else being equal. For example, an extra foreign holiday or city break every few years that you wouldn't otherwise have.

Not sure that I understand the concerns about currency exchange. The fact is that if you are investing in a world tracker whether it is an ETF. an OEIC or an IT you are going to have currency conversions all over the place , although most take place behind the scenes so the investor is not aware of them.

If they take place behind the scenes, the expectation (if not necessarily the reality) would be that the fund provider can access better forex rates, particularly given the size of their transactions, and/or juggle sales and purchases so that some or perhaps most of the forex nets out and so becomes unnecessary.

Of course, it's hard to tell if that occurs in practice.

[mc2fool]

ii do let you keep the cash in dollars in a GIA, and only charge you if you convert. I tend to reinvest dollar divis into BRKB anyway, which requires some detailed record keeping when it comes to using HRMC's exchange rates when it comes to calculating CGT. Hmm, or does it?

Yes, it does.

I've been manually converting each tansaction into sterling, but if I buy them in dollars and sell them in dollars then the gain is in dollars and the applicable exchange rate is on the date of sale...

Nope, sorry, they've seen you coming ....

"You should not accept a contention that the gain or loss on an asset acquired and disposed of for foreign currency should itself be computed in foreign currency and then converted into sterling at the rate ruling at the time of the disposal of the asset."
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg78310

[GeoffF100]

VWRL has a historical dividend yield of 1.74% according to Vanguard. That is 174 basis points. The exchange rate drag from a 0.15% 1.5% commission is 174*0.15/100 174*1.5/100 = 2.61 basis points.

Interactive Investor's forex charge is 1.5%. Right answer, but typos in the lead up?

Even on an LTA-sized pension, £250 or so per year isn't life changing, but on the other hand, it's better for you to have it than for the platform to have it, all else being equal. For example, an extra foreign holiday or city break every few years that you wouldn't otherwise have.

You are right about they typos. I did the calculation correctly and wrote it down wrongly.

My point here is not that 2.65 basis points is nothing, but that bigger savings are likely to be available elsewhere. Nonetheless, all the cost saving measures have potential downside. AFAIK, Vanguard does not charge commissions on FX conversions on its own platform. I assume iWeb charges 1.5%, but they do not give the time of the FX conversion, so I cannot check that. AJ Bell is substantially cheaper at 0.5%. There are cheaper rates than that available, but from platforms that do not look attractive to me.

[Dod101]

My point re exchange rates is that if you are buying an ETF which is in effect a world tracker , it must be buying more or less every currency in the world. It will obviously have to convert these into some common currency. No investor has any control over the exchange rates used nor any commission involved so to worry too much about the final exchange rates to the currency of your choice does not seem to me to make a lot of sense.

Dod