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iShares Quality Dividend ETFs & What Are The GBP Based Equivalents?

General discussions about equity high-yield income strategies
tlf67482
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iShares Quality Dividend ETFs & What Are The GBP Based Equivalents?

#223117

Postby tlf67482 » May 20th, 2019, 11:26 am

I am currently evaluating moving away from selecting specific UK HYP like shares and moving to expanding to different markets like USA and Europe especially for new money or when I rebias my portfolio for whatever reason.

iShares do a few dividend related ETFs and I am interested in the High Dividend USA, Europe and Worldwide variants and are looking for opinions on these over their standard dividend ETFs? E.g. EQDV (Europe Quality Dividend) vs IDVY (Euro Dividend)

Also taking the USA High Dividend QDIV as an example there is also a HDIQ both are USA High Dividend but the difference being one is in USD and the other is GBP. Why is that and should you be looking at the USD or the GBP version?

Thanks

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Re: iShares Quality Dividend ETFs & What Are The GBP Based Equivalents?

#223735

Postby Julian » May 22nd, 2019, 5:19 pm

Sorry, I'm not an expert on ETFs but one thing to add to your list of options is that Vanguard do do a global high divi ETF (https://www.vanguardinvestor.co.uk/inve ... _fund_link) which distributes in GBP and, at 0.29% annual charges vs 0.38% for the iShares worldwide one which I assume is WQDV (https://www.ishares.com/uk/individual/e ... &fst=50572), might be worth adding to your list of candidates. In my opinion Vanguard are a very competent operation.

- Julian

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Re: iShares Quality Dividend ETFs & What Are The GBP Based Equivalents?

#223803

Postby tlf67482 » May 22nd, 2019, 8:57 pm

Many thanks Julian.

Anyone happen to know if Vanguard ETFs are open to any trading platform just like any FTSE share without extra charges. This is how I understand ETFs but as I am not in a position of having to change platforms to choose a Vanguard ETF I want to be sure I understand correctly and I am not paying anything extra by not using the Vanguard platform?

Also I have tried and failed to confirm the paying distributions in GBP (doesnt help that the Distribution page is listed in USD) anyone happen to know where I can find confirmation of this as I have seen Currency Conversion fees on my statements so payment is GBP is desirable.

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Re: iShares Quality Dividend ETFs & What Are The GBP Based Equivalents?

#223857

Postby EssDeeAitch » May 23rd, 2019, 8:05 am

tlf67482 wrote:Many thanks Julian.

Anyone happen to know if Vanguard ETFs are open to any trading platform just like any FTSE share without extra charges. This is how I understand ETFs but as I am not in a position of having to change platforms to choose a Vanguard ETF I want to be sure I understand correctly and I am not paying anything extra by not using the Vanguard platform?

Also I have tried and failed to confirm the paying distributions in GBP (doesnt help that the Distribution page is listed in USD) anyone happen to know where I can find confirmation of this as I have seen Currency Conversion fees on my statements so payment is GBP is desirable.


VHYL is available on Interactive Investor at a cost of 0.42% (0.10 for II and 0.32 for Vanguard) so it is quite a bit higher than Vanguard direct at 0.29%. II will also charge £6 per trade which Vanguard do not charge.

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Re: iShares Quality Dividend ETFs & What Are The GBP Based Equivalents?

#223859

Postby Lootman » May 23rd, 2019, 8:27 am

EssDeeAitch wrote:
tlf67482 wrote:Many thanks Julian.

Anyone happen to know if Vanguard ETFs are open to any trading platform just like any FTSE share without extra charges. This is how I understand ETFs but as I am not in a position of having to change platforms to choose a Vanguard ETF I want to be sure I understand correctly and I am not paying anything extra by not using the Vanguard platform?

Also I have tried and failed to confirm the paying distributions in GBP (doesnt help that the Distribution page is listed in USD) anyone happen to know where I can find confirmation of this as I have seen Currency Conversion fees on my statements so payment is GBP is desirable.

VHYL is available on Interactive Investor at a cost of 0.42% (0.10 for II and 0.32 for Vanguard) so it is quite a bit higher than Vanguard direct at 0.29%. II will also charge £6 per trade which Vanguard do not charge.

I am confused by that. Since VHYL is an ETF it should cost the same for all investors, just like holding a share. Likewise there is no percentage platform fee for equities. Interactive Investors charges me only a flat fee per month/quarter and holds my ETFs at zero cost.

I thought it was only open-ended funds that had different expense ratios for different clases of funds, plus percentage platform fees in some cases?

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Re: iShares Quality Dividend ETFs & What Are The GBP Based Equivalents?

#223861

Postby EssDeeAitch » May 23rd, 2019, 8:41 am

Lootman wrote:
EssDeeAitch wrote:
tlf67482 wrote:Many thanks Julian.

Anyone happen to know if Vanguard ETFs are open to any trading platform just like any FTSE share without extra charges. This is how I understand ETFs but as I am not in a position of having to change platforms to choose a Vanguard ETF I want to be sure I understand correctly and I am not paying anything extra by not using the Vanguard platform?

Also I have tried and failed to confirm the paying distributions in GBP (doesnt help that the Distribution page is listed in USD) anyone happen to know where I can find confirmation of this as I have seen Currency Conversion fees on my statements so payment is GBP is desirable.

VHYL is available on Interactive Investor at a cost of 0.42% (0.10 for II and 0.32 for Vanguard) so it is quite a bit higher than Vanguard direct at 0.29%. II will also charge £6 per trade which Vanguard do not charge.

I am confused by that. Since VHYL is an ETF it should cost the same for all investors, just like holding a share. Likewise there is no percentage platform fee for equities. Interactive Investors charges me only a flat fee per month/quarter and holds my ETFs at zero cost.

I thought it was only open-ended funds that had different expense ratios for different clases of funds, plus percentage platform fees in some cases?


I found the information on the "Cost Disclosure Document" which is available just below the KIID document on the VHYL page. There are no platform fees beyond the quarterly charge as far as I am aware.

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Re: iShares Quality Dividend ETFs & What Are The GBP Based Equivalents?

#223927

Postby mc2fool » May 23rd, 2019, 11:26 am

EssDeeAitch wrote:
Lootman wrote:
EssDeeAitch wrote:VHYL is available on Interactive Investor at a cost of 0.42% (0.10 for II and 0.32 for Vanguard) so it is quite a bit higher than Vanguard direct at 0.29%. II will also charge £6 per trade which Vanguard do not charge.

I am confused by that. Since VHYL is an ETF it should cost the same for all investors, just like holding a share. Likewise there is no percentage platform fee for equities. Interactive Investors charges me only a flat fee per month/quarter and holds my ETFs at zero cost.

I thought it was only open-ended funds that had different expense ratios for different clases of funds, plus percentage platform fees in some cases?

I found the information on the "Cost Disclosure Document" which is available just below the KIID document on the VHYL page. There are no platform fees beyond the quarterly charge as far as I am aware.

A link is always useful. It's at https://www.ii.co.uk/etfs/vanguard-ftse-allwld-hidivyld-ucits-etf-gbp/LSE:VHYL

What the "Cost Disclosure Document" says is that the 0.1% is "Transaction costs" and consists of the £10 trading fee on their example of a £10,000 investment. The notes say, "The transaction costs shown above are an illustration based on our standard online commission charges / tiers. Charges may vary and may be higher for international trades, high value trades, or trades which are not placed online, and may be lower for frequent traders."

£10 is their (current) standard flat rate to buy and sell investments online (the £6 you quote is for frequent traders and new accounts until the end of this month), and so it's just a one-off and only happens to be 0.1% in the specific example of a £10K purchase.

In regards to the Product costs, the "Cost Disclosure Document" says that Vanguard have Ongoing costs, "Costs that the manufacturer take each year for managing your investments", of 0.29% plus Transaction costs, "Costs incurred by the manufacture buying and selling underlying investments", of 0.03%.

These are both costs within the ETF and ones you will incur no matter where you buy or hold it. Vanguard themselves (unless I'm missing it) seem to only reveal the 0.29% OCF, which is a little surprising as I thought everyone was required to reveal all costs nowadays, but obviously not. The only mention that there's more than just the OCF that I could (easily) find is on their "Costs & Minimums" page for the ETF* where they state the 0.29% OCF and in the notes say "Transaction costs also apply and are incurred when the fund buys or sells holdings."

* https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-all-world-high-dividend-yield-ucits-etf-usd-distributing/cost-minimums

Vanguard themselves charge 0.15%pa (max £375) to hold their investments directly with them, so clearly they are cheaper for "smaller" amounts whereas Interactive Investor's no %age but fixed (currently) 4*£22.50 account fee would make them cheaper for holdings over £60K. (Most folks won't pay the trade fee as the account fee includes some free trades. Note that II has new fees from 1-June. https://www.ii.co.uk/our-charges-1june2019).

Of course, one could buy and hold VHYL with IWeb, which has no platform or account fees, just a one-off £25 signup fee and a £5 per trade fee.

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Re: iShares Quality Dividend ETFs & What Are The GBP Based Equivalents?

#223932

Postby Lootman » May 23rd, 2019, 11:36 am

mc2fool wrote:These are both costs within the ETF and ones you will incur no matter where you buy or hold it. Vanguard themselves (unless I'm missing it) seem to only reveal the 0.29% OCF, which is a little surprising as I thought everyone was required to reveal all costs nowadays, but obviously not. The only mention that there's more than just the OCF that I could (easily) find is on their "Costs & Minimums" page for the ETF* where they state the 0.29% OCF and in the notes say "Transaction costs also apply and are incurred when the fund buys or sells holdings."

As regards the cost of trading within the fund (any fund) I was always of the view that such costs (commissions, exchange fees, stamp duty, bid-to-offer spreads) cannot be included in the expense ratio statement since they are variable, dependent on the amount of trading done, and can only be known in retrospect.

So for an index fund, for instance, you'd see the effect of those trading costs not in the stated expense ratio but rather in the tracking error. And of course index funds should only be trading to deal with corporate actions and index promotions/relegations (open-ended funds aside).

Since the major index funds have a very low tracking error, the assumption has to be that any such expenses are either minimal, or are mitigated by stock lending revenues. Also for large fund managers like Vanguard, Fidelity, State Street and Blackrock, many of the fund trades can be satisfied through internal crossing mechanisms, which are effectively at zero commissions and stamp duty, and at the mid-price.

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Re: iShares Quality Dividend ETFs & What Are The GBP Based Equivalents?

#223936

Postby EssDeeAitch » May 23rd, 2019, 11:42 am

mc2fool wrote:
EssDeeAitch wrote:
Lootman wrote:I am confused by that. Since VHYL is an ETF it should cost the same for all investors, just like holding a share. Likewise there is no percentage platform fee for equities. Interactive Investors charges me only a flat fee per month/quarter and holds my ETFs at zero cost.

I thought it was only open-ended funds that had different expense ratios for different clases of funds, plus percentage platform fees in some cases?

I found the information on the "Cost Disclosure Document" which is available just below the KIID document on the VHYL page. There are no platform fees beyond the quarterly charge as far as I am aware.

A link is always useful. It's at https://www.ii.co.uk/etfs/vanguard-ftse-allwld-hidivyld-ucits-etf-gbp/LSE:VHYL

What the "Cost Disclosure Document" says is that the 0.1% is "Transaction costs" and consists of the £10 trading fee on their example of a £10,000 investment. The notes say, "The transaction costs shown above are an illustration based on our standard online commission charges / tiers. Charges may vary and may be higher for international trades, high value trades, or trades which are not placed online, and may be lower for frequent traders."

£10 is their (current) standard flat rate to buy and sell investments online (the £6 you quote is for frequent traders and new accounts until the end of this month), and so it's just a one-off and only happens to be 0.1% in the specific example of a £10K purchase.

In regards to the Product costs, the "Cost Disclosure Document" says that Vanguard have Ongoing costs, "Costs that the manufacturer take each year for managing your investments", of 0.29% plus Transaction costs, "Costs incurred by the manufacture buying and selling underlying investments", of 0.03%.

These are both costs within the ETF and ones you will incur no matter where you buy or hold it. Vanguard themselves (unless I'm missing it) seem to only reveal the 0.29% OCF, which is a little surprising as I thought everyone was required to reveal all costs nowadays, but obviously not. The only mention that there's more than just the OCF that I could (easily) find is on their "Costs & Minimums" page for the ETF* where they state the 0.29% OCF and in the notes say "Transaction costs also apply and are incurred when the fund buys or sells holdings."

* https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-all-world-high-dividend-yield-ucits-etf-usd-distributing/cost-minimums

Vanguard themselves charge 0.15%pa (max £375) to hold their investments directly with them, so clearly they are cheaper for "smaller" amounts whereas Interactive Investor's no %age but fixed (currently) 4*£22.50 account fee would make them cheaper for holdings over £60K. (Most folks won't pay the trade fee as the account fee includes some free trades. Note that II has new fees from 1-June. https://www.ii.co.uk/our-charges-1june2019).

Of course, one could buy and hold VHYL with IWeb, which has no platform or account fees, just a one-off £25 signup fee and a £5 per trade fee.


Thanks for the clarification Lootman - appreciated

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Re: iShares Quality Dividend ETFs & What Are The GBP Based Equivalents?

#223953

Postby mc2fool » May 23rd, 2019, 12:22 pm

Lootman wrote:
mc2fool wrote:These are both costs within the ETF and ones you will incur no matter where you buy or hold it. Vanguard themselves (unless I'm missing it) seem to only reveal the 0.29% OCF, which is a little surprising as I thought everyone was required to reveal all costs nowadays, but obviously not. The only mention that there's more than just the OCF that I could (easily) find is on their "Costs & Minimums" page for the ETF* where they state the 0.29% OCF and in the notes say "Transaction costs also apply and are incurred when the fund buys or sells holdings."

As regards the cost of trading within the fund (any fund) I was always of the view that such costs (commissions, exchange fees, stamp duty, bid-to-offer spreads) cannot be included in the expense ratio statement since they are variable, dependent on the amount of trading done, and can only be known in retrospect.

Yes, but that shouldn't prevent them listing it. E.g. OCF = 0.29%, Transaction Costs for the last 12 months (or in last FY) = 0.03%

After all, we now all get the information in the annual statement from our brokers, so it'd be good to get an idea of all potential costs before buying ... without having to resort to asking in forums what brokers' reported to existing holders to find out.

And, of course, as we've seen, if some places list total costs and others only OCF, it can lead to confusion ... ;)

EssDeeAitch wrote:Thanks for the clarification Lootman - appreciated

You're welcome, but I'm not Lootman. :D

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Re: iShares Quality Dividend ETFs & What Are The GBP Based Equivalents?

#223959

Postby Lootman » May 23rd, 2019, 12:30 pm

mc2fool wrote:
Lootman wrote:
mc2fool wrote:These are both costs within the ETF and ones you will incur no matter where you buy or hold it. Vanguard themselves (unless I'm missing it) seem to only reveal the 0.29% OCF, which is a little surprising as I thought everyone was required to reveal all costs nowadays, but obviously not. The only mention that there's more than just the OCF that I could (easily) find is on their "Costs & Minimums" page for the ETF* where they state the 0.29% OCF and in the notes say "Transaction costs also apply and are incurred when the fund buys or sells holdings."

As regards the cost of trading within the fund (any fund) I was always of the view that such costs (commissions, exchange fees, stamp duty, bid-to-offer spreads) cannot be included in the expense ratio statement since they are variable, dependent on the amount of trading done, and can only be known in retrospect.

Yes, but that shouldn't prevent them listing it. E.g. OCF = 0.29%, Transaction Costs for the last 12 months (or in last FY) = 0.03%

After all, we now all get the information in the annual statement from our brokers, so it'd be good to get an idea of all potential costs before buying ... without having to resort to asking in forums what brokers' reported to existing holders to find out.

I agree. But at least with a tracker you can look at the tracking error and see the net effect of all costs. With an active fund it is all buried and I think that is where the bigger problems lie. It's a long time since I was involved in this business and I feel sure much has changed since then, but back in the day all kinds of expenses were dumped into the retail funds because those customers were considered the least sophisticated and the most indifferent to cost.

ETFs are relatively transparent in comparison to open-ended active funds.

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Re: iShares Quality Dividend ETFs & What Are The GBP Based Equivalents?

#223977

Postby EssDeeAitch » May 23rd, 2019, 1:16 pm

mc2fool wrote:
Lootman wrote:
mc2fool wrote:These are both costs within the ETF and ones you will incur no matter where you buy or hold it. Vanguard themselves (unless I'm missing it) seem to only reveal the 0.29% OCF, which is a little surprising as I thought everyone was required to reveal all costs nowadays, but obviously not. The only mention that there's more than just the OCF that I could (easily) find is on their "Costs & Minimums" page for the ETF* where they state the 0.29% OCF and in the notes say "Transaction costs also apply and are incurred when the fund buys or sells holdings."

As regards the cost of trading within the fund (any fund) I was always of the view that such costs (commissions, exchange fees, stamp duty, bid-to-offer spreads) cannot be included in the expense ratio statement since they are variable, dependent on the amount of trading done, and can only be known in retrospect.

Yes, but that shouldn't prevent them listing it. E.g. OCF = 0.29%, Transaction Costs for the last 12 months (or in last FY) = 0.03%

After all, we now all get the information in the annual statement from our brokers, so it'd be good to get an idea of all potential costs before buying ... without having to resort to asking in forums what brokers' reported to existing holders to find out.

And, of course, as we've seen, if some places list total costs and others only OCF, it can lead to confusion ... ;)

EssDeeAitch wrote:Thanks for the clarification Lootman - appreciated

You're welcome, but I'm not Lootman. :D


:oops: You look nothing like him/her either. I expect. Sorry about that!

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Re: iShares Quality Dividend ETFs & What Are The GBP Based Equivalents?

#223980

Postby richfool » May 23rd, 2019, 1:23 pm

If you consider that markets are currently high and due for a correction, or a prolonged bear market, one thing you can be sure of with a tracker is that it will track the market all the way down. I take the view that an active like an IT can at least take a defensive stance.


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