Difference between VTI and VT

Investing / Portfolios
21

Simple.
VXUS < VXUS + A-shares, which changes the balance of it all. I can’t be bothered to research this exactly as FTSE doesn’t publish their numbers as clearly as MSCI.

You can learn a bit about A-Shares form this MSCI page:

Also remember that MSCI EM is not the same as FTSE EM. The largest difference is South Korea, which is classified as EM by MSCI but is Developed according to FTSE.

As to small caps - this worked before. No guarantee for the future. I don’t think it’s a big risk long term. Worst that can happen is you spend a tiny bit more on fees (VSS is 0.13% TER as compared to weighted 0.06% of VTI+VEA+VXUS).

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22

VT vs VGWL (latter one is Total World fund of Vanguard for Europeans)

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However I do not understand why those two funds perform so differently while they have pretty much the same allocation of countries (of course there could be also a difference with having small caps included or not but the difference feels too big).

Can anyone explain this significant difference?
(acutally the VGWL is closer to the S&P 500 than to a Total Word Index)

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23

Did you plot them with the same currency?

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24

Exactly, that Bloomberg tool is probably not smart enough to convert currencies for you. Instead, you should compare with VWRD. Then you will get a perfect alignment.

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What remains, not visible on the chart, are dividends. VT has (relatively) higher, but it’s not easy to count, by how much, because they don’t get paid out on the same days.

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25

Ohh of course… Ive compared with different currencies.

Other thing:

While VWRD is distributing and VT accumulating - shouldnt there now be still a difference?

26

VT is distributing, not accumulating.

27

Ok everything clear now - thanks a lot guys!

28

Hey hedgehog, do you mind sharing in which Vanguard ETF’s you are investing? I appreciate your knowledge you share in this forum.

Thanks man.

29

They have not really produced “excellent yield” for the past decade or so since they have underperformed (which might be a good case to take some now/soon/after some crash happens; because cyclicity).
Yes you are right that they come with higher risk and volatility.
Play money does not do much effect, people state anything less than 10/20% of your portfolio is not worth even adding to your investment logistics efforts.
But won’t hurt you as much to play around if it doesn’t work out, true. :slight_smile:

Edit: short vid from the OG

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30

Unfortunately good ol knowledgeable @hedgehog hasn’t been seen on here for almost a year now.

But I think he would answer you with:
VT, VT VT
VT, VT VT
VT, VT VT
Theres nothing you can do that cant be done
Nothing that you can sing that can’t be sung
Nothing you can say, but you can learn how to play the game
Its easy
Theres nothing that you can make that cant be made
No one you can save that can’ be saved
Nothing you can do, but you can learn how to be you in time
It’s easy
All you need is VT
All you need is VT
All you need is VT, VT is all you need
(VT VT VT)
(VT VT VT)
(VT VT VT)
All you need is VT
All you need is VT
All you need is VT, VT VT is all you need
Theres nothing you can know that isnt known
Nothing you cant see that isnt shown
Theres nowwhere you can be that isnt where your meant to be
Its easy
All you need is VT
All you need is VT
All you need is VT, VT
VT is all you need
All you need is VT
(All together now)
All you need is VT. (everybody)
All you need is VT, VT
VT is all you need(X about 20 times)
END

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31

@rolandinho haha :smiley:
Well i like the answer, i just thought he mixes the vanguard stuff. I am on the VT train as well, keeping it simple.

32

More precisely, @hedgehog recommended VTI + VEA + VWO, because each of them has much bigger AUM than VT, and together they have a lower TER.

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33

I’m doing for the main portfolio: AGG + VTI + VXUS . Bonds, US and Non US.
The distribution depends of you.

VTI + VXUS is lower TER that VT. AGG is nothing: 0.05% TER.

34

Are you concerned by the currency risk?

35

Well… one thing that I’m very concerned is that the CHF are more and more expensive. If I was at the beginning of my investor life I would say perfect! More USD or EUR to invest!

But I’m in the last line and I’m planning to stay in Switzerland so if the CHF goes to 2 USD, for example, that will kill my retirement!!!

36

@Bojack Thanks for the information. I searched for that in the posts, but could not find it. Good to know there is an option to further optimise with vangauard ETF’s.

37

Just a note: Define optimize… you gain the opportunity to weigh/rebalance the different ETFs * and save a small amount on TER but you lose simplicity. Do not underestimate simplicity in the long run :slight_smile:

*and some diversification

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38

Most companies are global and are traded in several exchanges with different currencies anyway. So if the US goes weak compare to CHF, the worth of the share itself would spike as revenue is done not only in the US in US$. Or am I wrong here?

39

Your logic is correct, but the SP500 and the dollar index (DXY) have been moving in nearly perfect sync recently. In other words - who knows?

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40

Have they?

https://www.msci.com/documents/10199/a67b0d43-0289-4bce-8499-0c102eaa8399