Which Vanguard European index

[pp2023]

Hi all,
I'd like to put a small amount of money invested in a GBP European index for growth that includes the UK, as a counter balance to other holdings with heavy weight on US stocks, using the Vanguard platform.
I found five indexes when I checked what is available on the platform.

ESG Dev Europe All Cap UCITS ETF Acc
FTSE Dev Europe ex UK UCITS ETF Acc
FTSE Dev Europe ex-UK Equity Index Fund Acc
FTSE Dev Europe UCITS ETF Acc
SRI European Stock Fund Acc

It is difficult for me to decide which one of them to pick. One of them says it is an Irish UCITS, the other one says simply UCITS. That does not mean much to me. Some of them have class assets in £, some in €. If assets are in €, does that mean there is exchange fee. Two of them exclude UK, I would rather include the UK. I understand they have different number of stocks and OCF is slightly different. Some are index funds, some are ETF.
Which one would you pick and why? Help me understand your choice.
Thank you for your answer and best regards

[GeoffF100]

The ETFs are index funds too. Vanguard FTSE Dev Europe ex-UK Equity Index Fund looks to be your best bet, provided that you do not pay a percentage platform fee for holding it. UK domiciled. Reasonably big. Low costs. Proper market weighted index fund, unlike ESG or SRI. Dividends in GBP.

[monabri]

UCITS (Undertakings for Collective Investment in Transferable Securities). Defined as organizations, whose sole purpose is to collectively invest - in securities and other financial assets - capital raised by the public and which operate under the principle of risk management.


When you look at the ETF, check the "ISIN"

(1) VANGUARD FUNDS PLC FTSE DEVELOPED WORLD UCITS (VEVE)

example https://www.hl.co.uk/shares/shares-sear ... orld-ucits

ISIN: IE00BKX55T58

The "IE" tells you where the fund is "domiciled" - in this case IE = Ireland. It is thus treated as "foreign".

VEVE (this fund) contains roughly 4% UK share holdings.


(2) VANGUARD FUNDS PLC FTSE DEVELOPED EUROPE EX-UK UCITS ETF (VERX)
https://www.hl.co.uk/shares/shares-sear ... rope-ex-uk

ISIN: IE00BKX55S42 (also "Foreign" domiciled)

THis fund does not hold UK based shares.


(3) ESG ---- look it up, if that what floats your boat! It probably (?) means not investing in sin stocks/arms manufacturers/oil/gambling. But (from what I glean) one funds ESG acceptable stocks list diffes from another funds.




(ISIN is an acronym for International Securities Identification Number. ISIN numbers are the unique 12-digit numbers that are recognized by the International Standards Organization, located in Geneva, Switzerland, as security identifiers for cross-border securities transactions.)

[Lootman]

The ETFs are index funds too. Vanguard FTSE Dev Europe ex-UK Equity Index Fund looks to be your best bet, provided that you do not pay a percentage platform fee for holding it. UK domiciled. Reasonably big. Low costs. Proper market weighted index fund, unlike ESG or SRI. Dividends in GBP.

Yes, that is the only European investment I have, although I hold it in ETF form. IMO European funds should be ex-UK.

[GeoffF100]

You can easily add in UK exposure by adding a UK fund if you wish.

[monabri]

So....VEVE ( Europe inc. UK) + VUKE ( Uk only) ....tilt the holding by increasing the amount of VUKE to suit.

IShares offer similar ETFs from their stable but you'll have to look them up!

https://www.ishares.com/uk

[monabri]

The Vanguard SRI European Stock Fund (VGSESAG)...the "SR" bit in the title being "Socially Responsible ".

https://www.vanguardinvestor.co.uk/inve ... c/overview

"The Index is comprised of large and mid-sized company stocks in developed markets in Europe.
The Fund promotes environmental and social characteristics by excluding companies from its portfolio based on the impact of their conduct or products on society and / or the environment. This is met by not holding stocks of companies in the Index that do not meet specific “socially responsible” criteria."

"exclude stocks that violate United Nations Global Compact (“UNGC”) principles and stocks of companies involved in making controversial weapons and tobacco products."

( but Oil is ok...the fund holds Shell, Totalenergies, BP).

Just under a quarter (23%) of the fund is UK ( VEVE is 4% ) so it's a relatively strong tilt to the UK for a European fund.

[GeoffF100]

The OP is looking for a European tracker. VEVE is a developed world tracker, not a European tracker.

[monabri]

The OP is looking for a European tracker. VEVE is a developed world tracker, not a European tracker.

Apologies, sorry for the confusion. The European tracker being "VEUR"

Income version

https://www.vanguardinvestor.co.uk/inve ... y=European

Accumulating version being " VEUA".

[pp2023]

Thank you all for your answers.
The info about the ISIN was a very useful piece of information I was not aware of. 4 of the funds I listed have ISIN starting with IE and, indeed, only "FTSE Dev Europe ex UK Equity Index Fund" has an ISIN starting with GB.
So if a fund's ISIN number starts with IE, there is a currency exchange involved when investing or disinvesting, right?

[monabri]

Thank you all for your answers.
The info about the ISIN was a very useful piece of information I was not aware of. 4 of the funds I listed have ISIN starting with IE and, indeed, only "FTSE Dev Europe ex UK Equity Index Fund" has an ISIN starting with GB.
So if a fund's ISIN number starts with IE, there is a currency exchange involved when investing or disinvesting, right?

If you are investing via an ISA or a SIPP I wouldn't worry whether the fund is domiciled in Ireland...it is only based there for (their) tax reasons. Ditto the effect of currency conversion - if you buy a fund demoninated in Sterling then these exchange rate issues are handled for you. I'd be more interested in what's in the fund and past performance.

If you are investing outside of these tax wrappers, then you need to consider Excess reportable income (ERI)

https://www.justetf.com/uk/news/passive ... he-uk.html

"Excess reportable income Offshore funds with UK reporting status (including ETFs) may also declare excess reportable income (ERI). ERI is income that’s earned by the fund in excess of any distributions it made.
You must declare ERI on your tax return, even if the sums were retained inside your fund. Use the calculation guidance provided by your fund’s provider. For the avoidance of doubt, distributions include dividends and interest, and ERI applies to accumulation/capitalising ETFs too."

Hopefully you are loading up your ISA and you won't need to worry about this!

[Alaric]

So if a fund's ISIN number starts with IE, there is a currency exchange involved when investing or disinvesting, right?

Many ETFs are domiciled in Ireland. Whether there is a currency exchange from UK £ depends in which currency they quote the prices.

[pp2023]

The investment is within an ISA, so I don't need to worry about Excess reportable Income.
But I am confused regarding the currency.
Daily stock price is quoted in £ in all of these funds on vanguardinvestor.co.uk, however total assets are quoted in some cases in £ and in other in €.
Then comes the element of the first two letters in the ISIN: in some cases it is IE and in one case it is GB.
In what case would there be currency conversion?
Thank you for your time to answer me

[Alaric]

In what case would there be currency conversion?

When the buying and selling prices are not quoted in UK pounds.

[monabri]

In what case would there be currency conversion?

When the buying and selling prices are not quoted in UK pounds.

Yep, as difficult as that!


"if you buy a fund demoninated in Sterling then these exchange rate issues are handled for you" ....my spelling eh?

[GeoffF100]

The investment is within an ISA, so I don't need to worry about Excess reportable Income.
But I am confused regarding the currency.
Daily stock price is quoted in £ in all of these funds on vanguardinvestor.co.uk, however total assets are quoted in some cases in £ and in other in €.
Then comes the element of the first two letters in the ISIN: in some cases it is IE and in one case it is GB.
In what case would there be currency conversion?
Thank you for your time to answer me

You have to be very careful here. Share classes that are denominated in different currencies (always / often / usually?) share the same ISIN. Worse than that, there are brokers only list the dollar denominated version, according to a recent Monevator article. If the fund is an ETF traded on the London stock Exchange, the EPIC code will be unique to the share class. You need to find out the currency in which the fund is traded and the currency in which it pays dividends before you buy it. The base currency of the fund is not relevant.

[GeoffF100]

If you are investing via an ISA or a SIPP I wouldn't worry whether the fund is domiciled in Ireland...it is only based there for (their) tax reasons.

There is a possible issue here. UK domiciled global equity OEICs seem to outperform Ireland based ETFs tracking the same index, e.g. VWRL is outperformed by the HSBC FTSE All-World Index Fund. I am still researching this matter, but advise against jumping to conclusions here.

[kempiejon]

Most of my Vanguard ETF 'cept the UK ones VUKE(FTSE100) VMID(FTSE250) and VGOV (UK Gilts) pay dividends in other currencies, dollhars and Euro.
The dividend currency conversions went on undocumented though now AJ Bell itemise them for me, I don't think HL do.

[Nikosven]

Thanks for sharing!