Moving from VT to VWRL (or VWRD, or VEVE/VFEM)

[Dr.PI]

@Twain

In 20 years there might very well be a significant performance difference between the investors who chose VT and those who chose VWRD.

Which you can’t control or estimate a priori. Unlike fees.

@Bojack

I wouldn’t just blindly assume that you can take the face value of TER and strictly apply it as cost.

Splitting the world

I was thinking about updating this post, but decided not to. Too many variables that affect total investment costs. Instead I decided to outline what I think is a right way to calculate the total investment costs for an ETF. As a Swiss investor, one is only taxed on dividends, and namely up to 3 times. Let’s consider the whole process. All companies included in a fund are paying out dividends, which all together make gross dividend yield (in %) D_G. The gross dividend yield of various baskets …

@Bojack

As such, is it guaranteed by the fund that this value will not be exceeded?

There is a management fee which is fixed in advance and other costs, mostly trading fees. There are expected TER and actually realized TER, typically 1 year rolling. It should be possible to find both in reports etc.

@Bojack

I just wonder why we don’t see this constant divergence between the S&P 500 and VOO or even VUSD.

The fund management is using futures to “leverage” cash positions and bring the fund exposure into an agreement with the index tracked.