Is Vanguard good for ETFs
Best ETF of the Year - Vanguard FTSE All-World
An index that really maps the whole world
The special feature of the ETP Award winner is the underlying index, which enables a broadly diversified ETF product: unlike other so-called "world ETFs", the FTSE All-World ETF consists of more than 3,300 positions, invested in around 50 Countries - including industrialized and emerging countries - and thus covers more than 90% of the world's investable market capitalization.
For comparison: the largest global ETF (measured by volume invested) only invests in 23 industrialized countries, covers only 85% of global market capitalization and, with a high US share of more than 63%, has an indisputable cluster risk. It is rightly criticized that there is no real diversification, especially if investors want to invest broadly across the world.
Broad diversification in countries and sectors
The Vanguard FTSE All-World ETF, on the other hand, offers access to shares from 24 industrialized and 23 emerging countries worldwide, including the USA, Eurozone, Japan, China, Canada, Australia and other European and Asian industrialized and emerging countries, but is also from others Founding broadly diversified.
The top 10 holdings - including some of the most successful US and Chinese companies such as Apple, Microsoft, Amazon or Alibaba - have a total of around 13 percent and therefore have no risky surplus. In addition to large and medium-sized companies, some smaller companies are also included, which in turn helps diversify the product.
The same applies to the branch breakdown of the Vanguard FTSE All-World. The product invests broadly diversified and without overweighting in the following sectors: financials (18.11%), technology (15.78%), healthcare (11.82%), industrial (10.59%), consumer discretionary (10.31%) %), Communication (9.14%), consumer staples (8.19%), energy (4.94%), basic materials (4.37%), utilities (3.42%) and real estate (3.20%) *.
Advantages for investors
The very broad diversification of the FTSE All-World ETF ensures that investors hardly suffer from the crashes of individual stocks. In addition, ETF investors have the certainty that they will benefit if markets grow. Vanguard FTSE All-World ETF has achieved a performance of a whopping 34 percent over the past 5 years and the ETF has increased in value of over 130 percent since it was launched in 2012. With an average negative tracking difference, the ETF even performed slightly better than the underlying index *.
In addition, Vanguard's flagship product is very cheap with a total expense ratio of 0.22 percent. And since there is both a distributing and an accumulating version of the FTSE All-World, it is suitable for all age groups who are looking for a broadly diversified global ETF as a basic investment. The Vanguard FTSE All-World ETF provided several good reasons for the jury and audience to ultimately choose it as the best ETF of the year.
(* As of: March 8th, 2020; Source: extraETF.com)
The value of investments and the income from them can go down as well as up and investors can suffer losses on their investments. Past performance is not a reliable indicator of future returns.
Other important notes:
This document has been prepared for informational purposes only and is not to be taken as a substitute for investment advice. Vanguard only provides information about products and services and does not offer investment advice that is tailored to the personal circumstances of an investor. If you have any questions about investment decisions or would like to know whether the products described here are suitable and appropriate for you, please contact your financial advisor.
The London Stock Exchange Group companies include FTSE International Limited (“FTSE”), Frank Russell Company (“Russell”), MTS Next Limited (“MTS”), and FTSE TMX Global Debt Capital Markets Inc. (“FTSE TMX”) . All rights reserved. “FTSE®”, “Russell®”, “MTS®”, “FTSE TMX®” and “FTSE Russell” and other service marks and trademarks in connection with the FTSE or Russell indices are trademarks of the London Stock Exchange Group companies and are used by FTSE, MTS, FTSE TMX, and Russell under license. All information is provided for informational purposes only. The London Stock Exchange Group companies and its licensors accept no responsibility or liability for any errors or loss arising from the use of this publication. The London Stock Exchange Group companies and its licensors make no express or implied allegation, prediction, warranty or opinion regarding either the results that may be obtained through the use of the FTSE or Russell Indices, or the suitability or suitability of the Indices for any purpose they might be used.
Issued by Vanguard Asset Management, Ltd. which is authorized and regulated in the UK by the Financial Conduct Authority.
© 2020 Vanguard Asset Management, Limited. All rights reserved.
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