Xtracker FTSE 250 ETF XMCX

[sanityclaws]

Does anybody have any experience with this ETF they would care to share?

I am looking to increase exposure to UK mid caps, already hold some VMID and was going to simply increase that holding.

I understand though that buying XMCX rather than VMID has the advantage that it avoid duplication of FTSE 100 holdings I hold through through VUKE and elsewhere albeit at the cost of a slightly higher Total Expense Ratio ( 0.15% rather than 0.10%). Is that right?

I note too that XMCX appears to be much smaller than VMID - how important is that?

Is there anything else I should be aware of?

[nmdhqbc]

I understand though that buying XMCX rather than VMID has the advantage that it avoid duplication of FTSE 100 holdings

What FTSE 100 holdings dos VMID hold? I though it's a 250 tracker which is 101st to 350th biggest so excludes FTSE 100.

[Laughton]

Vanguard says:-

Investment strategy

The Fund seeks to track the performance of the Index, a widely recognised benchmark of mid cap sized companies of the United Kingdom. The Fund employs a passive management or indexing investment approach, through physical acquisition of securities, designed to track the performance of the Index, a free-float-adjusted market-capitalisation-weighted index. In tracking the performance of the index, the Fund attempts to replicate the index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index.

Charges are 0.10% but there are also transaction costs which, I guess, is the reason that it doesn't exactly match the performance of the FTSE250. But it's pretty close and I'm happy with the costs. If anyone knows of another provider doing it cheaper please let me know.

https://www.vanguardinvestor.co.uk/inve ... stributing

[kempiejon]

I understand though that buying XMCX rather than VMID has the advantage that it avoid duplication of FTSE 100 holdings

What FTSE 100 holdings dos VMID hold? I though it's a 250 tracker which is 101st to 350th biggest so excludes FTSE 100.

That's my understanding VMID is a ftse250 tracker and hence would exclude ftse100 constituents. I bought iShares MIDD for FTSE250 exposure but swapped to VMID for the charges saving, iShares wanted .5% I think Vanguard only .1 or .2%, now 0.1% plus transactions as mentioned

[sanityclaws]

Thanks for your responses.

My plan was (is) to move most of our investments towards passives (almost entirely ETFs) and ITs before I go entirely gaga. I'm beginning to wonder whether I left it a bit late!

[1nvest]

Vanguard says:-

Investment strategy

The Fund seeks to track the performance of the Index, a widely recognised benchmark of mid cap sized companies of the United Kingdom. The Fund employs a passive management or indexing investment approach, through physical acquisition of securities, designed to track the performance of the Index, a free-float-adjusted market-capitalisation-weighted index. In tracking the performance of the index, the Fund attempts to replicate the index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index.

Charges are 0.10% but there are also transaction costs which, I guess, is the reason that it doesn't exactly match the performance of the FTSE250. But it's pretty close and I'm happy with the costs. If anyone knows of another provider doing it cheaper please let me know.

https://www.vanguardinvestor.co.uk/inve ... stributing

Vanguards choice of benchmark lags the FT250 total return index (as published by Russell https://www.ftserussell.com/), and in turn Vanguard the actual fund (after a Expense Ratio of 0.1%) lags their benchmark. According to my reckoning 2019 saw a 0.25% lag of the FTSE 250 total return index, and a 0.18% lag was evident for 2018.

A alternative potentially lower cost (even negative cost i.e. positive reward) is to use 2MCL, a 2x FT250 total return swap ETC, weighted to 50%. Expense ratio 0.6%, but when half weighted that's 0.3% relative to total.

That borrows to scale up exposure, and recently its fund fact sheet indicates a 0.0022% daily swap rate (which over a year compounds to around 0.8%). If the other half not invested in 2MCL is invested in a stable value/safe manner and that achieves a return in excess of 2MCL's fees and its cost to borrow, then your reward will exceed the index; Similarly if the rewards from the 'safe' investment are less - then you'll lag the index. Rebalance once/year to realign back to 50/50 2MCL/safe in order to keep overall tracking error/drift from the FT250 index relatively low.

There's no UK equivalent for the following links ... but as a example for US data https://tinyurl.com/v5xa4hb is one option of 'safe' choice. With that applied alongside a 50% allocation to a 2x leverage stock fund https://tinyurl.com/uknewad you might achieve a negative cost factor (positive benefit) after costs relative to the total return index.

Fundamentally that's playing off 50% of your funds being invested in a acceptably low-risk/safe manner to offset what 2MCL is paying to borrow on a daily basis in order to provide investors with twice stock exposure (and the expenses that the fund charges to provide that product). In low interest rate periods such as current times, that tends to be easier than when interest rates are higher - so keep in mind that when interest rates are higher it may be more appropriate to just hold VMID as-is.

[GeoffF100]

Vanguards choice of benchmark lags the FT250 total return index (as published by Russell https://www.ftserussell.com/), and in turn Vanguard the actual fund (after a Expense Ratio of 0.1%) lags their benchmark. According to my reckoning 2019 saw a 0.25% lag of the FTSE 250 total return index, and a 0.18% lag was evident for 2018.

Do you mean the VMID benchmark lagged the FTSE 100 index over one year? That would not tell us much about the future. I do not like the FTSE 250 because it contains investment trusts. That means I would be paying additional costs to hold shares that I already own through other trackers. (A small proportion of investment trust holdings are not available on the open market, but that is besides the point.) FTSE 250 is "small cap" in world terms. If you want to invest in "small companies", perhaps it is better to buy a global small companies tracker.

[1nvest]

Vanguards choice of benchmark lags the FT250 total return index (as published by Russell https://www.ftserussell.com/), and in turn Vanguard the actual fund (after a Expense Ratio of 0.1%) lags their benchmark. According to my reckoning 2019 saw a 0.25% lag of the FTSE 250 total return index, and a 0.18% lag was evident for 2018.

Do you mean the VMID benchmark lagged the FTSE 100 index over one year? That would not tell us much about the future. I do not like the FTSE 250 because it contains investment trusts. That means I would be paying additional costs to hold shares that I already own through other trackers. (A small proportion of investment trust holdings are not available on the open market, but that is besides the point.) FTSE 250 is "small cap" in world terms. If you want to invest in "small companies", perhaps it is better to buy a global small companies tracker.

No, we're discussing the FTSE 250 index here (not FTSE 100). xmcx, vmid ...etc are FTSE250 index trackers/funds. I highlighted how VMID lagged the FTSE 250 index total return by the VMID expense ratio (of 0.1%) ... and some. The figures that Vanguard publish as the benchmark they use to compare their VMID fund against lagged the FTSE 250 Index total return - which gives a impression that their actual fund returns were more close to tracking the FTSE 250 index total return than it actually was. Some investors might for instance just look at the funds total return for the year, compare that to the benchmarks total return for the year that Vanguard publish, see around a 0.1% difference and accept that as being the funds 0.1% Expense Ratio (and opine that they're closely tracking the actual index total return less 0.1%/year). But when measured against the Russell (mathematical) Index, they're (VMID) lagging that by more (0.18% in 2018, 0.25% in 2019).

There's something like £2Bn invested in VMID, if a additional 0.1% of that in addition to the 0.1% Expense Ratio is opaquely 'lost' from view each year then that's £2M/year. Yes that's compared to the mathematical index, that Russell calculates/publishes and that cannot be matched in the real (trading) world, but it would be nice to see those differences actually published rather than being hidden away. Transparency.

Yes the FTSE 250 is small cap in US scale (largest FTSE 250 stock market cap comparable to the US's small cap largest stock), and the FTSE 250 holds a number of Investment Trusts (that makes the Financial sector weighting look relatively heavy - whilst within that those Investment Trusts might invest/diversify relatively widely across sectors/assets). For those that don't hold other investments that include Investment Trusts that might be considered as additional diversity thrown in automatically. Around half of the FTSE 250 earnings are I believe sourced from foreign earnings/exposure. If I hold a global fund then that will incur all sorts of costs, dividend withholding taxes, currency conversion costs ...etc. A case of more 0.1% type 'hidden' amounts being 'lost' (to me as the investor). Compare the total return from the FTSE 250 to that of US Small Cap Value (£ adjusted) and since 1986 the two have achieved comparable rewards (total returns). The US however would in the case of small cap value holdings have taken a 15% slice out of dividends (under UK/US tax treaty, 30% for others). Currency conversion spreads/costs would also be involved.

Personally I do not opine that there is a Small Cap Value premium that some suggests exists, instead I see it as a Large Cap drag factor being involved (that isn't evident in Small/Mid Cap, such that Small/Mid tends to relatively outperform Large Cap). The primary cause of that lag is that whilst small/mid have stocks enter/exit out of both the top/bottom, Large cap is only fed into/out of the bottom. Single stocks can rise to be massive, such that even when they falter and perhaps halve or more in value/price they are still very large ... acting as a drag factor upon the whole index. With small/mid no single stocks tend to become excessively over-weighted, instead of 10% of the index being in a single stock for large cap, the largest small/mid cap stock tends to be less than 2.5% of the whole index. You might use the HYP as examples. A pure HYP that just buys 20/whatever stocks in equal measure (capital values) and holds that as-is thereafter will tend to see some stocks fade, others do very well. A initial equal capital allocation to each stock will, over time, see a few become relatively heavy elements of the total portfolio. Single stock concentration risks will be relatively high for a small number of stocks and if any one of those falters then the whole portfolio value could be dragged down significantly. It would have become more like a standard large cap index, tilted towards individual stocks/sectors. In contrast a 'tweaked HYP' that sought to periodically scale down 'tilt' mitigates single stock/sector concentration risk. Accordingly I'd predict that initially a standard and tweaked HYP's might both compare reasonably similar for a decade or so, but thereafter the standard HYP would tend to be more prone to lag the tweaked HYP due to the standard HYP having greater single stock risk factors (uncompensated additional risk that sooner or later might backfire).

If you compare the standard Nov 2000 HYP total returns with that of the FTSE 250 total returns then the two have aligned relatively closely, however with time the gap is widening with the FTSE 250 pulling ahead. You could have taken FTSE 250 total returns and withdrawn the same amount of income from that as the HYP each year (so the exact same income produced), whilst on the capital value front the FTSE 250 portfolio value would be higher than the HYP's portfolio value. Both started as somewhat equal weighted style holdings, whilst the HYP had drifted to become more like a cap weighted index - above average risk/exposure to some stocks/sectors. Whilst other tweaked HYP have apparently compared more equally to the FTSE 250. Comparison to the FTSE 100 however indicates each of standard and tweaked HYP along with FTSE 250 have performed considerably better (as has US Small Cap Value that compared in GB£ terms to the FTSE 250).

[1nvest]

I do not like the FTSE 250 because it contains investment trusts. That means I would be paying additional costs to hold shares that I already own through other trackers.

The question that begs is whether those alternatives to gain Investment Trust exposure are more or less cost/tax efficient?

I could for example hold a HYP - but that has just compared to holding the FTSE 250. I could also have held US Small Cap Value as another holding - but again comparison is evident. I could hold some gold, but foreign currencies can be just as good as gold when the domestic currency falters - and around half of the FTSE 250 earnings are from foreign. I could hold some Investment Trusts - again that's already contained in the FTSE 250. I could hold a Equal Weighted stock index, but again that's somewhat already evident in the FTSE 250 (yes, I know, not in the strictest sense - rather just comparable, with multiples of the smaller end being in effect clumped together as a 'single' holding).

So instead of a portfolio of

HYP
US SCV
Gold
IT's
EW

... just a single holding instead. Moving that to another broker is a simple single trade action. Cost and tax wise that can be efficient along with tight spreads and liquidity. In contrast the above portfolio has multiple 'hidden' costs/taxes potentially involved, along with potential headaches of what to do when its opined that the portfolio should be 'rebalanced' or other similar action-required events (return of capital, takeovers etc.). Let alone tax reporting (self assessment). If that doesn't match your income requirement, perhaps a HYP providing 4% instead of 3% dividends, no matter, just use total returns and withdraw your own dividend from that so that the income provided compares.

[1nvest]

Haven't looked more recently, but a few years back when I did last look the FTSE 250 had around 50% of earnings sourced from foreign business activities, and comprised 15% Investment Trusts. So a broad risk/reward combined profile expectancy of ...

( 0.85 x stock ) + ( 0.15 I.T.'s) + ( 0.5 gold )

...where 'stock' is comparable to a HYP (standard or tweaked) or a Equal Weighted or a Small/Mid cap holding(s). And 'gold' is gold in the form of domestic currency hedge (comparable to holding foreign currencies).

Proportions of two thirds 'stock' (including IT's) and one third gold/foreign currencies proportions are "good" - in the sense that in around two thirds of years stocks are the better performing asset (one third of years gold is the better performing asset).

[GeoffF100]

Sorry about the typo. I did mean FTSE 250. The FTSE 250 has done less well than the FTSE 250 ex ITs over the past thirteen years:

FTSE 250
1/9/2003 to 1/1/20
5457.8 / 21883.42 = 4.0096

https://uk.investing.com/indices/uk-250

FTSE 250 ex ITs
1/9/2003 to 1/1/20
5660.50 / 22867.64 = 4.0399

https://uk.investing.com/indices/ftse-250-(ex-it)

I expect that is because the ITs have held overseas stocks that have done better than the FTSE 250 over that period. That is just good fortune.

Vanguard's prospectus for VMID looks clear to me. They are indeed not tracking the mathematical FTSE 250. I agree that they do not make that clear in their marketing material, which is remiss of them.

This is the passive investing board. Nobody here wants a HYP or investment trusts. We just want to track the global equity market, without any investment trusts thrown in. (We may add other trackers, but that is besides the point.)

The alternative to investing in foreign stocks by buying VMID, with its holding of investment trusts, is to buy market weighted overseas tracker funds. Investment trusts also pay withholding taxes, currency conversion costs etc. They also pay larger fees to their fund managers than trackers do, and incur greater trading costs. With VMID, you are also paying for a tracker on top.

The FTSE 100 is not well diversified, but the global market is much more diversified. If big money piled into the FTSE 250, it would push up the prices of the FTSE 250 stocks, which would be self defeating. Small investors can overweight the FTSE 250 without distorting prices, but if those stocks are popular they may be paying too much. That is an unnecessary gamble.

[GeoffF100]

Sorry, too hasty. Taking out the ITs improved the performance, despite the strong markets overseas. Unfortunately, I there were no trackers for FTSE 250 ex ITs when I last looked. As I have said, it makes more sense to buy a global small cap tracker than a FTSE 250 tracker if you believe that there will be a small cap premium.

[1nvest]

Looking at more recent values, looks like the FTSE 250 still derives around 50% of earnings from foreign. IT's however have risen to being 20.4% of the Index (FTSE 250 Mkt Cap - FTSE 250 exc. IT's Mkt Cap ... as published by russell.com https://research.ftserussell.com)

[1nvest]

The FTSE 100 is not well diversified, but the global market is much more diversified. If big money piled into the FTSE 250, it would push up the prices of the FTSE 250 stocks, which would be self defeating. Small investors can overweight the FTSE 250 without distorting prices, but if those stocks are popular they may be paying too much. That is an unnecessary gamble.

The FTSE 250 can absorb big-money. If into individual stocks they there'd just be the tendency for more churn at the quarterly review(s) as those stocks were moved up to the FTSE 100. If big-money was injected into the entire index (Index funds that replicated the FTSE 250 index), then again the largest stocks would be expelled into the FTSE 100. Tending to keep the FTSE 250 still aligned with not being excessively overweight individual stocks/sectors. Simply, the reviews would tend to see more being rotated in/out of the Index. A number of stocks enter/exit the index already, nothing new, the last two reviews for instance seeing

Code: Select all

September 2019 FTSE 250 quarterly review

Entering FTSE 250

Airtel Africa
Direct Line Insurance Group <- FTSE 100
Finablr
Foresight Solar Fund
Marks & Spencer Group <- FTSE 100
Micro Focus International <- FTSE 100
Sirius Real Estate
Trainline
Watches of Switzerland Group


Existing FTSE 250

Amigo Holdings
Funding Circle Holdings
Hikma Pharmaceuticals -> FTSE 100
Intu Properties
Meggitt -> FTSE 100
Metro Bank
Polymetal International -> FTSE 100
Ted Baker
Woodford Patient Capital Trust

=======================================

December 2019 FTSE 250 quarterly review

Entering FTSE 250

C&C Group
Fresnillo <- FTSE 100
Helios Towers
Hiscox <- FTSE 100
LXI REIT


Existing FTSE 250

Card Factory
Easyjet -> FTSE 100
Just Eat -> FTSE 100
NB Global Floating Rate Income Fund (GBP)
Riverstone Energy

In contrast, look at a large cap such a the US S&P500 where 15% of its value (the larage majority of its top 10 holdings) are tech holdings, the giants such as Facebook, Google, Mircrosoft ...etc. At times in the past, single stocks have been 10% of the entire index (limited by the index method preventing single stocks becoming more than 10% of the total index weighting).

Yes unlikely that such tech stocks will falter anytime soon (excepting some kind of solar burst event that left us back at using pen/paper records), however there have been instances in the past such as Japan 1980's where the 'Index' is predominately made up of very large firms that had performed incredibly well over the prior decade or two, that then falter, but in being exceptionally large still continue to be large and dominate the index despite perhaps having halved and halved again in value/price. Dragging down the whole index in the process. Japanese investors more broadly/equally diversified have achieved far better results than the Japanese stock Index - simply through not having been excessively exposed/overweight to the largest stocks.

I used the HYP as a example of how the original equal (capital value) weighted purchases had now become tilted, around 60% of the entire value concentrated into four of the stocks. They're not the same/similar sectors, but in some cases they could be (such as Japan 1990's), and their subsequent decline/demise (or revaluation) can wipe out large amounts of the capital value due to over-concentration. A unnecessary risk that can be diversified away. And a real risk as is seen from longer term comparisons of large compared to mid/small (or equal weighted). The common perception however is that of mid/cap/equal weighted having "premiums", whereas it should rather be perceived as Large Cap having a drag factor - that can be diversified away.

If you measure risk by stability, as many do, then the likes of gilts/bonds will be seen as low risk. For long term passive investors however short term volatility shouldn't be considered as a risk. It's only a risk when volatility is downwards and prolonged (losses). Gilts are not risk-free, indeed in other aspects they are very high risk. The State can print more money to induce inflation and increase nominal taxation. 15% inflation/interest rates accompanied by 75% basic rate taxpayer taxation ... and even if a investor saw bank interest paid to them that matched 15% inflation, after taxation they're down over 11% in real terms, in just a single year. Spanned over multiple years, as per the 1970's and net real (after taxes and inflation) they can lose out substantially. Or as per WW1 years (collapse of the British Empire) inflation might rage whilst Gilt yields are fixed to much lower levels. 20%+/year type inflation, 4% bank interest ... for a handful of years and perceived 'safe' investments get wiped out (or rather - heavily depleted). Inflation figures can be 'tweaked' to reflect a basket of goods that no one actually aligns to - but that again depletes real values.

For long term passive investors the primary risk is not having enough real gains to offset drawdown/income. Bonds, gold and even Large Cap each are uncompensated risks in that respect. As are more broad/common costs and tax risks. Holding foreign stocks will incur withholding taxes, currency conversion costs and often higher expense ratio costs. Yes the FTSE 250's IT's are in effect double counting costs (IT's fees/costs on top of which VMID or whatever Index Fund fees are also levied), but by comparison to paying 15% withholding taxes on 3% dividends (0.45% in dividend taxation alone), the FTSE 250's IT's are a relatively small 'overhead' (often where the alpha add benefits from IT's offsets charges/fees) and/or the added benefit of greater diversification (collective range of assets the IT's invests in) can add additional benefits (or lower overall risk).

A good way to draw income IMO is to assess/measure historic lowest Safe Withdrawal Rate (SWR) and use that as the amount drawn. Then instead of conventional SWR where you uplift that SWR value up by inflation each year as the amount drawn in later years, uplift the SWR value by either inflation or to the SWR percentage value, whichever is higher. That way the average investor will see income rising in advance of inflation over time rather than just pacing inflation. In that context "risk" is the lowest SWR percentage that is measured/calculated. Historically for instance FT All Share had a lower SWR than midcaps across all 30 (assumed retirement period) years. Adding in other drag factors such as bonds and/or gold typically doesn't reduce 'risk', seeing similar worst case 30 year SWR's, whilst tending to act as a drag factor such that average SWR values were lower. Bonds/Gold/Large Cap/foreign ETF's diversification didn't lower risk, rather they just acted as drag factors (lowered average rewards).

[flyer61]

Very interesting thread - thank you.

I have two big ETF holdings in the equity arena, VWRL and VMID. (SHYU,PGX,PFF - fixed income) Whilst I realised there were Investment trusts in VMID I wasn't aware until I read this thread quite how high the percentage is.

Can anyone recommend an ETF that captures a pure play (or much nearer to) on the UK economy?

[GeoffF100]

The FTSE 250 can absorb big-money. If into individual stocks they there'd just be the tendency for more churn at the quarterly review(s) as those stocks were moved up to the FTSE 100. If big-money was injected into the entire index (Index funds that replicated the FTSE 250 index), then again the largest stocks would be expelled into the FTSE 100.

The market capitalisation of the global stock market is about $85 trillion. The market capitalisation of the FTSE 250 is about £400 billion. If Mr Market invested $85 trillion in a FTSE 250 tracker, the prices of the FTSE 250 stocks would become completely insane, and you could buy the whole of Apple for one cent. A hundred of the FTSE 250 companies would be promoted to the FTSE 100, and the tracker would have to sell their shares at a huge loss. It would then have to pay an insane premium for the shares that had been demoted. This process would be repeated until Mr Market lost most of his money.

If too many people buy small cap stocks they become over priced, and a bad buy. Your position seems to be that it is always better to invest in the FTSE 250, rather than the global market, irrespective of the relative prices.

[1nvest]

The FTSE 250 can absorb big-money. If into individual stocks they there'd just be the tendency for more churn at the quarterly review(s) as those stocks were moved up to the FTSE 100. If big-money was injected into the entire index (Index funds that replicated the FTSE 250 index), then again the largest stocks would be expelled into the FTSE 100.

The market capitalisation of the global stock market is about $85 trillion. The market capitalisation of the FTSE 250 is about £400 billion. If Mr Market invested $85 trillion in a FTSE 250 tracker, the prices of the FTSE 250 stocks would become completely insane, and you could buy the whole of Apple for one cent. A hundred of the FTSE 250 companies would be promoted to the FTSE 100, and the tracker would have to sell their shares at a huge loss. It would then have to pay an insane premium for the shares that had been demoted. This process would be repeated until Mr Market lost most of his money.

If too many people buy small cap stocks they become over priced, and a bad buy. Your position seems to be that it is always better to invest in the FTSE 250, rather than the global market, irrespective of the relative prices.

If Mr Market were being so irrational as to investing solely in the FTSE 250 Mrs Market would become a active investor and benefit from Mr Markets totally irrational behaviour. I'm not saying its always better to invest in the FTSE 250 rather than a global market for everyone, but for some.

VWRL (world stock) has a 0.22% expense ratio and holds around 50% US stock exposure. I could buy into a US stock tracker with 50% of funds for a 0.1% or lower expense ratio and seek out low cost tax efficient global (excluding US) alternatives for the other half. According to your tax position and method of holding/exposure withholding taxes can be a risk factor, as can potential changes to those terms (Brexit for instance). https://monevator.com/etfs-and-the-pecu ... lding-tax/ If such risks materialise then selling to move holdings to alternative choices may incur capital gains liabilities. A minefield where adjustment to perhaps a 30% withholding tax and a 3% dividend could increase "costs" to 1%/year for that alone. And to what benefit. With global markets increasingly 'connected' so equity arbitrage benefits have narrowed down. Holding a "sampled" set of stocks can reflect the whole reasonably closely - negative tracking error in some years, positive in others, neutral overall. If a smaller sampled set can replicate the rewards of the whole, but do so with lower costs/taxes, then why not! Using a single stock as a example, CISCO, which is listed both in the US and in Mexico. Should you hold some of both or just one. Account for the currency differences and the price is the same, whilst for some investors holding one will likely be more cost/tax efficient than holding the other or a combination of both.

Also, as per large cap stocks having a drag factor due to overweighting individual stocks/sectors, so also does a world stock fund. VWRL's 50% exposure to the US at present for instance. In the 1970's/80's the US fell from something like 75% weighting down to 25% weighting - as Japan rose from near nothing up to 50%. It's better to equal weight - which is similar to mid/small cap, than it is to cap weight, even if its just equal weight at the offset and then leave it to run as-is (as per Pyad's HYP versus FTSE 100). Better still to periodically realign to equal weightings when modest deviations/drift have become apparent (reduce the 'tilt' risk).

Its easy to overlook individual small costs/overheads, hidden or otherwise, as being 'insignificant'. Financials live by that. Some brokers even charge 0% fees/expenses nowadays as they know that large chunks of money will be left idle or inefficiently invested that they can exploit to their own benefit; Or where additional costs (spreads/currency conversion/lending stock ..etc.) will feed them. Compounded little gains (for them) here and there accumulate to large benefits - at the investors expense. And too late to look back in a decade or two time and wonder why the great difference between the mathematical index you sought to track via a seemingly low cost tracker actually encountered lower rewards than the expense ratio suggested you might lag that index by. The introduction of mandatory "Key Facts" documents were intended to yield greater transparency - they haven't, as its not in the best interest of Financials. A good idea has in effect been turned into a joke/inconvenience - about as useful as every web site now having a 'click to accept cookies' mandatory requirement inconvenience.

[GeoffF100]

VWRL (world stock) has a 0.22% expense ratio and holds around 50% US stock exposure.

VWRL is not competitive on price. VWRL = 0.9 x VEVE + 0.1 x VFEM which is much cheaper.

The US market is currently about 50% of the world market. That may be wrong. I do not know more than the market. Do you?

The rise of protectionism may make global markets less correlated.

Tracking a free float index is not a problem. It is a necessity. You cannot track the mathematical index, because you cannot buy the stocks to do it.

There are additional costs and taxes in global investing. The costs are coming down. We do not know what will happen to withholding taxes, but a global investor has a spread of risk there. Nonetheless, UK institutional investors currently have an average of about 75% of their equity holdings overseas. If I am wrong, I am in good company. Having my investments go down the tubes when my country goes down the tubes would not be good.

The Key Facts documents are useless. You have to find the relevant information from other sources. I have already mentioned the Prospectus.

[1nvest]

I do know that investors in the broad Japanese Market have barely seen break even in real terms since 1990, whilst others with less (Large Cap) risk concentration have achieved 10% annualised real stock rewards.

Institutes might be relatively short the Pound, whether that is appropriate or not - their guess is as good as any. The Pound could rebound once the UK enters the Transition period and is free to negotiate deals with others, possibly strongly. 50/50 UK and foreign when you're spending in GB £ is a neutral stance.

Gifting fees/costs/taxes to others detracts from your own benefits. Each to their own.

[GeoffF100]

I do know that investors in the broad Japanese Market have barely seen break even in real terms since 1990, whilst others with less (Large Cap) risk concentration have achieved 10% annualised real stock rewards.

If they had invested globally, they would have done much better than they did by investing in their local market. That will not always be true though. Their local market will occasionally be the highest performing market in the entire world.