So FWRA did a much better job in its first year than VWRL, even with way lower AUM.
I do wonder how they did that?
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Did someone actually try to analyze annual reports of VWRL and understand how much they earn with securities lending?
I think because they are new , they have not yet bought all the tiny tiny stocks that constitute the index but they will do so over time . Maybe that has helped
I think long term performance difference would be similar to TER difference and security lending profits etc
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I also think they got lucky because they are in the process of buying all the constituents (2415 holdings as of 27th Feb. out of 4247 compared to the index).
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TL;DR WEBG or IMID/SPYI to replace VT with UCITS funds?
Hello, I need advice.
I only hold VT on IBKR (like many of you I guess) and because of the āImpact of rapidly changing US policies on investing [2025]ā I would like to reduce exposure to US domiciled assets / US brokers.
I want to pick a single ETF to invest in and hold it for years, it has to be low-cost and diversified. I could sell some of my VT and buy this new ETF as well.
After a bit of research, Iām undecided between WEBG and IMID/SPYI. Here is a quick comparison table (in bold the main differences):
| Ticker | WEBG | IMID/SPYI |
|---|---|---|
| Provider | Amundi (EU) | SSGA (US) |
| Index | Solactive GBS Global Markets Large & Mid Cap | MSCI All Country World (ACWI) IMI |
| Includes Emerging Markets | Yes | Yes |
| Includes Small Cap | No | Yes |
| TER (%) | 0.07 | 0.17 |
| AUM (B) | 2.2 | 2.4 |
| Domicile | IE | IE |
| Dist / Acc | Dist | Acc |
| Trade currency | USD, EUR | USD, EUR |
| # constituents | 3435 | 3670 |
| Inception date | Feb 2024 | May 2011 |
What do you suggest in case I will buy it using DEGIRO?
I like WEBG, itās very cheap and distributes dividends (that I will re-invest, resulting in FX exchange cost!). On the other hand itās only 1 year old, doesnāt include small cap (VT does, will it provide a meaningful difference?), people complain about Amundi rising TER. What the hell is Solactive?!
IMID/SPYI seems more established, replicate VT, itās also more expensive (no tax treaty with IE increasing even more the cost). The provider is US based, so I donāt know if makes sense to pick it if I really want to move away from the US.
Final word on spread: on XETRA WEBG seems to have a higher spread compared to SPYI, but I think itās small (Iām not an expert, please correct me if Iām wrong). Spread on SIX is even worse.
Thoughts? Suggestions? Am I overreacting*?
Many thanks for your inputs!
*yes, maybe, but if I can hedge the risk for ācheapā why not?
FYI thereās WEBN thatās accumulating if you prefer.
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I had similar thought sometime back.
After some thinking I decided not to worry about small caps anymore
If you look at world ETF- it already have a good mix of big and small companies because ex-US companies are not so big like US big companies.
So I only use WEBG or SPDR ACWI (TER 0.12%, trades in CHF) when I buy UCITS ETFs. It depends on the broker and the foreign exchange costs.
For example 0.5% forex fees for CHF-EUR (buy + sell) would mean you need to hold the ETF 10 years to have same return with WEBG vs SPDR ACWI. For shorter durations, ACWI will end up being better than WEBG
Since you are trying to disconnect as much as possible from US chain of custody, maybe WEBG/WEBN is good as it is European fund and European domicile ETF
I think spread of WEBG/N on XETRA is quite good. Not sure what you mean by high spread ? Try to check when markets are open in Europe
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It actually might not be a bad idea:
- Use a UCITS ETF to take on US L&M cap
- Combine it with an SCV ETF like AVUV/DFSV (still US situs, but can be kept under the 60k limit)
- This way we also avoid the āmost crappyā kind of Small cap (the Growth type)
Might consider it for myself too.
(Similar idea to The Ginger Ale Portfolio (My Own Portfolio) and M1 ETF Pie, just an āoutside of USā variant, and not taking the SP500 but going a bit broader)
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If you are undecided, it means that the choice is not important. Take the one with lower TER.
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AVWS UCITS
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Go with WEBG. Small caps on their own mean absolutely nothing because their weight in a global market-weighted index is essentially nothing other than feelgood/FOMO āI got some of thatā.
Small cap + factor (value/profitability) is an active tilt which may or may not play out.
Somewhat irrelevant to the topic, but very good video overall: https://www.youtube.com/watch?v=JfknibBat2A
Dunno, but if it mean making moves now then Iād say itās a bad idea. Edit: to qualify my point, the point is that making reactive moves during volatile times more often than not leads to bad outcomes because the decision-making process is under stress.
Under such conditions, people generally get motivated by fear and greed impulses which is usually exactly the wrong thing to do at that time.
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There is a reason why average investor underperforms 60-40 portfolio
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Thanks everyone! I will probably go with WEBG.
Yes, indeed. But Iām not going to change my strategy: I will still invest in the Global Market, cap weighted. Iām not saying āI will sell all my VT stocks and only buy EU stocksā. Iām just trying to diversify even more (broker, fund domicile, ā¦) which I believe can be beneficial (and a bit more expensive also).
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this is one of my concerns. am i silly to be put off by the fact that itās not an index provider i am very familiar with?
They have been around for quite a while. Anyone from the ETF and related industries, is well aware of then.
And by the way, MSCI is charging ETFs quite a bit of money.
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The details of index composition is the thing that would concern me the least when comparing two ETFs - as long as they are compatible e.g. in Emerging markets definition.
Edit: DM/EM assignment is only important if you split them, and only substantial for South Korea.
All-World ETF is going to have a very similar composition anyway.
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I would completely ignore the index provider and focus on what the fund invests in
ETF following Solactive Global Large & Mid cap would invest in most of the companies that MSCI ACWI would invest in.
I noticed that recently there are European domiciled ex-US ETFs available
Could be interesting to have VTI in IBKR for US exposure and one of these for the rest
Yeah. Following could be an all European fund selection for decent TER.
WEBH + EXUS + XMME
Or
VTI + EXUS + EIMI (if American funds are also okay)
Of course above only makes sense if purpose is to achieve a different split of the world vs standard market weight
For market cap weight, WEBG should do the job.