Comparing stock index trackersFor a long time now i've been investing in VWRL (FTSE All World Index) as a way of keeping my portfolio diversified and allowing me to take more risk when it comes to individual stocks as most of my money is within this fund. When talking to a friend the other week he has a similar approach but instead of VWRL he's been investing in VUSA (S&P 500 Index tracker) he swears but it and said the returns are better than VWRL.
My curiosity kicked in, as a long term investor i want to get the most value out of my investments as a few pounds now could cost thousand later. With this in mind i decided to do a comparison. My friend was right, long term returns are better on VUSA but it's more heavily weighted to America and also the top Tech Companies taking up 25% of the funds total investment.
Depending on your risk tolerance etc you need to work out what is the best option for you. In terms of historic performance VUSA might be the better play, but more risk involved with all exposure in America.
VUSA
VANGUARD FUNDS PLC S&P 500 UCITS ETF USD(GBP) (VUSA)This ETF gives exposure to the US market particular for European/ UK investors. It tracks the S&P 500 index (the 500 top US listed companies). A full summary available here .
The quarterly yield currently 1.61%, Vanguard also take an annual %-based management fee which is relatively low imo. Annual %-based fees are good for those who are a buying regularly - like small amounts from wages.
If like me you want to continue building your exposure here, I recommend buying between the daily 200ma and 500ma (red and orange) during bearish periods, during bullish moves you won't have this opportunity so you can wait for buys between the daily 20ma and the 100ma (blue and green). The 50ma is a good place to average in.
My strategy is small buys from disposable income - that means don't bet what you're not willing to "lose".
In the past ETFs like this have been low risk, low return investments. There has been a lot of FUD over the last couple of years surrounding stocks and the market has been very volatile due to political interventions (Trump).
Right now, I think the market is preparing for a decisive move, possibly bullish imo, but if not the fund will likely retest (at least close to) the 500ma, probably over a 12 month period.
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