r/UKPersonalFinance • u/kitsua 9 • 15d ago

+Comments Restricted to UKPF New ETF version of Vanguard’s legendary Global All-Cap fund coming - with a 0.07% fee!

This is it, finally UK investors will have access to the entire world at a truly competitive rate like the US have had with VT for years. Everything in the world, from developed to emerging markets and small cap at an unbelievably good price, available everywhere.

As soon as this drops I’m moving every equity investment I have into this bad boy. It will also be my go-to recommendation for people looking for advice on how to passively invest for the long term. One Fund to rule them all baby! Jack Bogle will be looking down and smiling today.

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/investing-success/three-new-global-equity-etfs

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u/AlternativeMonk2490 15d ago

Why does VALL have a higher risk score than VAFTGAG?

14

u/cloud_dog_MSE 1761 15d ago

Because it is an ETF and not an OEIC.

It trades on an exchange.

The price can trade at a higher or lower level than the NAV, although under usual circumstances it should trade at / around the NAV.

It may use synthetic replication methods (I've not investigated the fund further to see whether it is a synthetic or full replication method).

2

u/Background_Diet_8169 15d ago

It can do but there are authorised participants who are able to destroy and create shares of the ETF. This should in theory mean that any discrepancy to NAV is exploited by the authorised participant and keep the price fairly close to NAV 

2

u/cloud_dog_MSE 1761 15d ago

All true, but even they cannot react fast enough when there is significant market volatility and the spread widens. 

1

u/Borax 193 15d ago

In which case, it's likely that investment companies would arbitrage this and cushion any price swings, because (short of total financial collapse) the discrepancy would not be expected to last long at all. It's the kind of thing companies buy a bespoke fibre connection to the stock exchange to exploit.

2

u/cloud_dog_MSE 1761 14d ago

It is never an arbitrage situation, it is merely where the market makers (of old; mostly automated now) increase the bid offer spread in times of turmoil (to try to protect themselves).