Discussion in 'Shares & Funds' started by Redwing, 23rd Feb, 2017.
VDHG share price went almost vertical on the Google chart last few days .
Anyone know why?
Very relevant issues it seems! wondering if any posters have received any feedback from vanguard call centre staff on these matters or any other matters?!
Give them a call and let us know.
Vanguard economic and market outlook for 2018: Rising risks to the status quo
Vanguard Group, The $4.5 Trillion Fund Giant, Makes Its Move To Blockchain
Just chanced upon this on the Vanguard Sites TOOLS & CALCULATORS
Compare products and costs
Select and compare investment funds from Vanguard and other providers.
Can anyone explain why VAN0107AU (hedged international fund) has such high distributions relative to VAN0011AU (unhedged international shares fund).
The 1 year distribution difference 19.78% vs 6.33%.
The 3 year difference is 9.44% vs 2.99%. Fund total returns are relatively parallel with differences obviously being based on currency, but I don't understand why this distribution difference occurs.
Welcome to the world of hedging. Erratic distributions as a result is why in part I dislike hedged Funds. See my previous post:
Tax inefficiency is another problem.
You’ll get the currency adjusted total return but the split between capital and income will vary wildly.
Hedging is an inexact science and difficult to explain especially by me with a sore head this time of night.
The following article relate to bonds but it’ll give you some background. Light bedtime reading.
LISTED PROPERTY - Separate Allocation, yes or no?
@Il Falco rather than get off track on the other thread I’ve been thinking more about VAP and whether it deserves to be a separate allocation in one’s portfolio. You mentioned low correlation with the main index etc. You do tend to overwork my geriatric brain at times truth be told.
I remembered something about this in a Vanguard report and why they removed property from their diversified funds.
This is an extract from the Report. There’s accompanying charts on page 16:
- not a prop investor so not overweight
- yes it’s concentrated, as is the ownership of commercial property
- drop gfc and correlation is much lover and that’s a very weird Index they have constructed on page 17 (half areit and half hedged Int’l reit)
This is a new position for Vanguard, having previously held A-reit and Int’l reit in their diversified funds. I wouldn’t be surprised to have them add back at next asset allocation review....let’s see
Re Vanguard. Keep changing their mind. Yep don’t trust them. Never had, never will. LICs, now they can be trusted.
It’s about whether or not you want to outsource your asset allocation decisions I guess. Me, no.
Another note on VAP ; only raised this in other thread as was an all listed portfolio. In this sector you could make a strong case for unlisted single asset funds or direct investment imo.
I must admit I don’t like the diversified product as discussed earlier in this thread especially given tax issues from rebalancing and changing asset allocation etc. Fine if for behavioural reasons that’s the only way an investor can cope with the market. But I agree that direct investment into separate funds is much preferred.
I think I’m suffering from recency bias given what happened to AReits during the GFC. I owned SLF (along with STW) quite early on and when the GFC struck I started piling into SLF when it was down over 40%. Big mistake. From memory I think it got near 90% down at its worst? I should’ve listened to @SatayKing back then. He had always disliked them.
That said it’s not a sector I trust. When badtimes are forgotten AReits have a bad habit of overleveraging when good times return. Then again they’re not alone there. Hence whatever the reason whether psychological and / or analytical it’s not a sector I would invest in ever again.
US investors had the same experience. Lots walked away from the asset class. Many coming back around now... Long term trend line looks good
Never walked away from Shares which also copped a decent hiding during the GFC just AReits which I really didn’t do most of our buying till over 40% plus down.
To be honest the other main reason is they just ain’t as good for income as normal shares given their nature. For the same reasons that Thornhill and @SatayKing used to explain to me many years ago. Of course we’re different types of investors so in your case they’re likely to be a good fit. As a dividend investor less so for me.
I do like your new portfolio suggestion introducing correlation factor on the other thread. Quite some thought has gone into it. For total return asset allocators it looks excellent.
To be honest I know A-Reits aren’t ideal. As always there are many factors to consider ; tax, currency, cost, ease of management, volatility etc. It is what it is.
The concept is striking a balance between the above mentioned factors. Somewhere between Taylor Larimore and Swedroe / Merriman, ha. One thing I’d also reconsider is to split out EM as a stand-alone rather than bundle into World ex US due to its different performance characteristics from the DM in that product. Question then rebalancing bands or time based? On it goes!
I like AU domicile but VGS would be much better split in two. But then Small Caps are missing. It’s really disappointing the product choice in Aus. You read the great stuff on Boglehead forum then try to apply it here taking into account our small concentrated market. Most solutions usually seem suboptimal. Frustrating at times.
Also an Australian domiciled ETF that tracks the US
S and P 500 would be very nice. I would take one like that over VGS any day.
The US part of VGS being mostly large Cap would be similar to S&P 500 or vice versa anyhow. So yes just a simple AU domiciled S&P 500 ETF would do the job.
Use VGS and VGE in the right proportion to overweight emerging markets?
Vanguard would definitely be better with an Australian domiciled version of VTS or S&P500.
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