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Any thoughts about Vanguard funds ?

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Alaric
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Re: Any thoughts about Vanguard funds ?

#137718

Postby Alaric » May 9th, 2018, 11:23 am

DrBunsenHoneydew wrote:ETFs are rather like like unit trusts/oeics in that they can be either trackers or actively managed.


I don't think there are any ETFs that are actively managed in the sense that there's a human fund manager making buy/sell decisions. It's in the nature of the the design of ETFs that there has to be a formula to decide what's should be in them. The more exotic ETFs will however have rules of composition which mimic how a fund manager might work.

AleisterCrowley
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Re: Any thoughts about Vanguard funds ?

#137726

Postby AleisterCrowley » May 9th, 2018, 11:35 am

https://investor.vanguard.com/etf/etf-vs-mutual-fund
This seems to suggest 'some' ETFs are actively managed:
Leave the selection of stocks and bonds to a professional fund manager and save yourself the time and effort.

Alaric
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Re: Any thoughts about Vanguard funds ?

#137730

Postby Alaric » May 9th, 2018, 11:42 am

AleisterCrowley wrote:This seems to suggest 'some' ETFs are actively managed:[i]


That is a US comparison, which goes on to say

Most ETFs are index funds (sometimes referred to as "passive" investments), including our lineup of more than 70 Vanguard ETFs.




Does anyone know of an ETF which isn't an index fund?

AleisterCrowley
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Re: Any thoughts about Vanguard funds ?

#137736

Postby AleisterCrowley » May 9th, 2018, 11:53 am

They do exist, although I suspect they are a small proportion of total
https://www.fidelity.com/learning-cente ... ly-managed

Alaric
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Re: Any thoughts about Vanguard funds ?

#137746

Postby Alaric » May 9th, 2018, 12:39 pm

AleisterCrowley wrote:They do exist, although I suspect they are a small proportion of total


That would be the American ETF market, which because of EU inspired regulation is now unavailable to most UK investors. Are there any similar funds directly available to UK investors.

AleisterCrowley
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Re: Any thoughts about Vanguard funds ?

#137762

Postby AleisterCrowley » May 9th, 2018, 1:02 pm

'Possibly' is the answer
http://citywire.co.uk/money/active-etfs ... n/a1062566
Not sure if this one mentioned is available to UK private investors;
http://www.londonstockexchange.com/exch ... ml?lang=en

Anyway, why bother?!

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Re: Any thoughts about Vanguard funds ?

#137775

Postby hiriskpaul » May 9th, 2018, 1:28 pm

Vanguard have 4 LSE listed Factor ETFs (Liquidity, Minimum Volatility, Momentum, Value), that they describe as being actively managed, but the approach sounds fairly mechanistic. For example, the Value ETF:

The Investment Manager’s quantitative model implements a rules-based active approach that aims to assess the factor exposures of securities, favouring equity securities which, when compared to other securities in the investment universe, have lower prices relative to their fundamental measures of value (which measures may include price-to-book or price-to-earnings ratio, estimated future earnings and operating cash flow).


I am about to buy the Value ETF in my daughters' Lifetime ISAs. For actively (sort of) managed global funds the charges are quite reasonable at 0.22%.

There are a number of "RAFI" (Research Affiliates) and other Factor/Smart Beta ETFs available, which although described as passive, are really rules based along the lines of the Vanguard active ETFs.

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Re: Any thoughts about Vanguard funds ?

#137777

Postby Alaric » May 9th, 2018, 1:31 pm

AleisterCrowley wrote:Anyway, why bother?!


It seems a recent development in the UK at least.

Somewhere in the "how do they work" is that ETFs rely on there being a buying or selling counterparty, able to supply stocks or cash. With an indexed ETF, that's not do difficult to arrange. With a "managed" ETF that requires a very frequent disclosure of the fund assets.

You can see the attraction though as the once a day blind dealing needed for OIECs doesn't fit well with online trading.

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Re: Any thoughts about Vanguard funds ?

#143974

Postby malakoffee » June 5th, 2018, 7:00 pm

My project to transfer from M&G to Vanguard Lifestrategy is limping forwards at last.

I thought that Halifax Sharedealing would charge me :-

£12.50 per annum for the ISA ( which I pay for my existing ISA with them ).

£12.50 for the transaction ( Buying Vanguard Units )

0.22% Ongoing Charge ( annual )

but, I spot something in Fees & Charges that I had not previously been aware of . . . .
( This is on a Halifax Fund Research page, provided by Morningstar . . . . )

"Transaction Fee - 0.5% ( based on industry average )"

This is unexpected. It appears on the same page on the iWeb website.

Any ideas ?

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Re: Any thoughts about Vanguard funds ?

#144091

Postby GeoffF100 » June 6th, 2018, 10:30 am

malakoffee wrote:but, I spot something in Fees & Charges that I had not previously been aware of . . . .
( This is on a Halifax Fund Research page, provided by Morningstar . . . . )

"Transaction Fee - 0.5% ( based on industry average )"?

That is not a fee that you have to pay. It refers to a cost within the fund. It will not be 0.5%. You will find an estimate of this cost based on the standard EU formula here:

https://www.vanguardinvestor.co.uk/cont ... s-2018.pdf

Vanguard says that this figure is not an accurate indication of the true transaction costs, however.

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Re: Any thoughts about Vanguard funds ?

#144817

Postby paulnumbers » June 10th, 2018, 3:39 pm

tjh290633 wrote:
Some ETFs are replicators and some are synthesized, using derivatives, etc. The fact sheets should make that clear.

Otherwise they trade like ordinary shares, but are open-ended. So if there are more sales than purchases they have to sell the underlying securities. Investment Trusts don't have to do this, of course. I'm with you in preferring ITs to ETFs.

TJH


I don't think that's true at all. Technically there can only ever really be the same number of sells & purchases as they're traded on the secondary markets. It's possible that they could trade below or above NAV, at which point 3rd parties can approach the provider and swap a basket of the underlying funds for a newly created share, or vice versa. That's the part that keeps them trading closer to NAV than IT's as there is an arbitrage opportunity.


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