MartynC27 wrote:The Vanguard Global Bond (VAGP) contains a range of over 4200 Global Government and Investment grade Bonds, average quality AA- , Average Duration 7.2 years and is probably the closest ETF you can hold which is similar to the Vanguard Global Bond Fund.
Yes, VAGP includes a lot of shares, but that does not mean it is well diversified. It is less well diversified than a whole market world tracker, because it omits all the shares that do not have high yields. Indeed, it is likely to omit whole sectors, and even be mostly restricted to a few sectors. That is also true of value trackers and of growth trackers.
I am using iWeb, so platform fees. I have a large holding of Vanguard Global Bond fund, and I am paying 0.05% p.a. more than I would with the ETF. Nonetheless, there would be switching costs, and Vanguard's charges may change.
Another point worth mentioning with regard to geographical allocation is UK bias. Vanguard's committee has decided to invest 25% of the LifeStrategy equity allocation in the UK market. That is also the average allocation of UK institutional investors. The main arguments for a UK bias are reduced volatility and more favourable tax treatment. A UK bias also waters down the US market allocation, which many consider to be overweight, but a passive investor is not going to pay much attention to that.