vgs vs iwld

A final concern for IWLD is how its is actually put together, and whether the underlying ETFs allow it to accurately track its index. Because there is only one ETF with VGS, there is only one place cash drag occurs. But if the ETF portfolio is going to represent the vast majority of your wealth, you probably want at least 50% of it to be in AUD. I still need to chat to my accountant about that. However, from what we can tell, there have been no block trades on IWLD yet. This tax inefficiency would, on the surface, suggest VGS is a better product. Meaning that basket financing should be more expensive. How IWLD's creation baskets are optimised for tracking (wonkish, feel free to skip). track a market index rather than taking bets on individual companies Because IWLD’s creation basket is simply four hyper-liquid ETFs with massive volumes, all of which have easy hedges, one would expect block trades to be very straightforward and in fact quite cheap. Using standard deviation, which is perhaps the most common risk measure, there doesn’t appear to be any difference. VGS and IWLD are both good funds. Just a general note about your planned portfolio: it has a lot of exposure currency movements, as 70% of it isn’t in AUD. For example, Nestle is a Swiss company and IEFA's biggest holding, meaning Swiss taxes apply. Spreads are particularly significant for traders, or for short term holders. This means Nestle’s dividend gets taxed twice. I only just read about it yesterday. (In practice, it doesn’t necessarily work like that. Australian Personal Finance: budgeting, saving, getting out of debt, investing, and saving for retirement. Australia’s best global shares ETF: Vanguard’s VGS or iShares IWLD? What does the new tech bubble and COVID-19 lockdown imply for value investors? Press J to jump to the feed. As traders rarely hold a fund the whole year, they don’t wear the full management fee. For those wanting small caps, there is always VISM, the Vanguard international small cap ETF. Specifically, IWLD can get some of that double tax back. Until then they were only a couple of basis points below VGS so not significantly different, and Vanguard has a reputation for being on the side of investors due to the (original) US arm of Vanguard which was setup to literally send profits back to people who purchase shares in their funds, ie it is essentially owned by their customers. Most ETF providers are sure to tuck this cash away in futures when certain thresholds are hit. Now I’m not fully sure how this works in any detail. IEFA invests in companies based in rich European and Asian countries (including Australia). At that level the difference is negligible especially since people like Vanguard as a company and the fact that IWLD includes Australia and Vanguard doesn't. Is there a catch? In theory, the FoF approach should also help make IWLD more liquid, as market makers have to source fewer securities when creating IWLD. By Investing overseas is important for Australians. The approach means that the US takes up a two-third majority of both VGS and IWLD’s assets. Management fees are always the first thing that comes into investors’ minds these days when ETFs are discussed. Why not retire at 45? Both are super cheap, well diversified and from two of the most famous ETF issuers. My concern was that because it has overseas ETFs within the ETF you purchase that is funds within a fund, it would be less tax efficient because the foreign withholding taxes paid by the US listed ETFs would not be able to be claimed for, So EAFE fund pays withholding taxes on dividends received to the source countries. Potentially...I'm also wondering what the tax implications of both are. How discount brokers actually work, ETF Insight: The rat race to become Europe’s number two ETF provider. IWLD only just reduced their fees a couple of weeks ago. B) I'm not sure if there is a tax drag, for example if you hold a US domiciled fund that has ex-US companies (like VEU), I think you pay tax to the US that you would not otherwise pay with an non-US domiciled fund holding non-US stocks, but for VEU (not sure for IWLD) you can claim that against your tax so might not be an issue unless you have a less than 15% marginal tax rate. New comments cannot be posted and votes cannot be cast. The weighted average spread on VGS’s basket is higher than IWLD’s. I'll see what the accountant says about tax. Press question mark to learn the rest of the keyboard shortcuts. We take a look. Until then they were only a couple of basis points below VGS so not significantly different, and Vanguard has a reputation for being on the side of investors due to the (original) US arm of Vanguard which was setup to literally send profits back to people who purchase shares in their funds, ie it is essentially owned by their customers. MER is really attractive for IWLD but VGS is all I ever hear about. They cause higher transaction costs and capital gains taxes. Its tiny 9bp fee makes it one of the cheapest in Australia. Press J to jump to the feed. By using our Services or clicking I agree, you agree to our use of cookies. Can’t make up your mind whether to buy VGS or IWLD? VGS by contrast has negligible turnover, which helps keeps costs and tax down. Press question mark to learn the rest of the keyboard shortcuts. I've already both of those threads and now in continuing my research I wanted to see what the people on reddit brought up from their experiences. I'm not sure if this is the case with IWLD as it depends if the underlying ex-US fund/s in it are US domiciled or not. VGS only includes large and medium-sized global companies. Because iShares’ Australian and Hong Kong staff didn’t have to build IWLD from scratch, and because they can piggyback off existing popular iShares ETFs, they can provide IWLD at an ultra-low cost. VGS might be slightly better; VGS and IWLD are both good funds. The most crucial difference between IWLD and VGS is how they’re structured. their assets under management reaches around 150-200M, so that would remove both tax related issues. First, and perhaps less importantly, IWLD tracks a version of the MSCI World that includes Australia, which makes up around 2.5% of its assets. The local share market is dominated by a few big banks, miners, and retailers. This means it has to pay taxes where the companies are based as well as where the fund is based. Biden vs Trump: Sector ETFs to play if Democrats win US election, No—Superhero is not Robinhood. The investment strategies VGS and IWLD follow are very similar: they buy the global share market and weight every company by size. In terms of risk, again, both funds are similar. Market makers then pass on the costs of basket financing to investors, while adding a spread of their own. Great, thank you for your reply. Turnover comes when the underlying ETFs get rebalanced. IWLD has the advantages of including smaller companies, which have historically outperformed, and a lower management fee. And looking at the end result, iShares and Vanguard’s dividend yields are very similar. VGS invests directly in shares whereas IWLD is a fund of funds that invests in other ETFs; Both ETFs have very similar dividend yields because both invest in a similar range of international companies; IWLD invests in 3,800+ shares compared with 1,500+ for VGS.

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