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Global Small Cap

Index tracking funds and ETFs
Deweyman777
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Global Small Cap

#453291

Postby Deweyman777 » October 26th, 2021, 5:55 pm

I’m looking at increasing my exposure to global small caps. Not too fussed about emerging markets as I have these covered already, but equally relaxed if a small cap ETF/tracker includes them.

I’ve been looking at WSML (iShares MSCI World Small Cap ETF), which seems to fit the bill.

Anyone have any other suggestions?

Hariseldon58
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Re: Global Small Cap

#453341

Postby Hariseldon58 » October 26th, 2021, 8:05 pm

I hold WLDS which is the accumulating version of this one and also the Vanguard OEIC version, which is slightly cheaper and holds more stocks in the index, 4400 + compared to 3400+ presumably it should track the index more closely.

(There is a State Street version as well.)

hiriskpaul
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Re: Global Small Cap

#453413

Postby hiriskpaul » October 26th, 2021, 11:09 pm

Hariseldon58 wrote:I hold WLDS which is the accumulating version of this one and also the Vanguard OEIC version, which is slightly cheaper and holds more stocks in the index, 4400 + compared to 3400+ presumably it should track the index more closely.

(There is a State Street version as well.)

WSML is accumulating as well, but listed in USD instead of GBP. I hold WLDS.

EthicsGradient
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Re: Global Small Cap

#453505

Postby EthicsGradient » October 27th, 2021, 11:05 am

The lowest charge for a global small cap fund currently listed at Monevator is L&G Global Small Cap Index Fund - 0.2%. It tracks theMSCI World Small Cap index too. Vanguard is 0.29%, iShares 0.35%. L&G have 4,390 out of 4,430 holdings in the index.

Hariseldon58
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Re: Global Small Cap

#453656

Postby Hariseldon58 » October 27th, 2021, 5:23 pm

EthicsGradient wrote:The lowest charge for a global small cap fund currently listed at Monevator is L&G Global Small Cap Index Fund - 0.2%. It tracks theMSCI World Small Cap index too. Vanguard is 0.29%, iShares 0.35%. L&G have 4,390 out of 4,430 holdings in the index.


That’s interesting, a very competitive charge. I used to hold L&G index funds in the early 2000’s but I put them on the naughty step and dropped them, I must admit I can’t remember the details,( I believe at that time there were additional ‘hidden’ charges…)

Deweyman777
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Re: Global Small Cap

#453700

Postby Deweyman777 » October 27th, 2021, 7:52 pm

Thanks for the top tips. I guess it’s a toss up between WLDS and Vanguard Global Small Cap.

The L&G one looks good as well but I can’t seem to access it on my platform (Interactive Investor). Unless anyone else can find it on there?

stevensfo
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Re: Global Small Cap

#453705

Postby stevensfo » October 27th, 2021, 8:02 pm

Hariseldon58 wrote:
EthicsGradient wrote:The lowest charge for a global small cap fund currently listed at Monevator is L&G Global Small Cap Index Fund - 0.2%. It tracks theMSCI World Small Cap index too. Vanguard is 0.29%, iShares 0.35%. L&G have 4,390 out of 4,430 holdings in the index.


That’s interesting, a very competitive charge. I used to hold L&G index funds in the early 2000’s but I put them on the naughty step and dropped them, I must admit I can’t remember the details,( I believe at that time there were additional ‘hidden’ charges…)


By coincidence, so did I, as well as Richard Branson's 'Virgin' tracker. The good old days of TMF. I sort of remember that one was a FTSE100 tracker and the other was ...something else, but what I do remember is ditching them both due to their charges staying sky high when others were dropping. I think that I switched into a Scottish Widows FTSE100 tracker that, as Lootman quite rightly once remarked, is now considered a sort of bond proxy. It goes up and down like a yo-yo but keeps throwing off its 3-4% every year.


Steve

monabri
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Re: Global Small Cap

#453707

Postby monabri » October 27th, 2021, 8:18 pm

Deweyman777 wrote:Thanks for the top tips. I guess it’s a toss up between WLDS and Vanguard Global Small Cap.

The L&G one looks good as well but I can’t seem to access it on my platform (Interactive Investor). Unless anyone else can find it on there?


I had a shufty for the L&G fund on ii (and iWeb and HL) ....no luck.

I tried using the ISIN IE00BG0VVG79 on the 3 platforms mentioned and a general search for Global & Small .

https://fundcentres.lgim.com/uk/en/fund ... ndex-Fund/

However, ii supports WSML & Vanguard Global Small-Cap Index Fund (IE00B3X1NT05)...and so does iWeb.

plodder
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Re: Global Small Cap

#453979

Postby plodder » October 28th, 2021, 8:26 pm

From ft.com minimum investment size for Legal & General ICAV - L&G Global Small Cap Equity Index Fund C would appear to be 100,000,000 GBP. Maybe thats why its not on II.

https://markets.ft.com/data/funds/tears ... 0VVG79:GBP

shetland
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Re: Global Small Cap

#454202

Postby shetland » October 29th, 2021, 5:12 pm

If you would be happy with an OEIC then have a look at Threadneedle Global Smaller Companies

genou
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Re: Global Small Cap

#454226

Postby genou » October 29th, 2021, 7:39 pm

plodder wrote:From ft.com minimum investment size for Legal & General ICAV - L&G Global Small Cap Equity Index Fund C would appear to be 100,000,000 GBP. Maybe thats why its not on II.

https://markets.ft.com/data/funds/tears ... 0VVG79:GBP


I assume you see the joke. If not, that has to be an error. The fund is listed as 51.22m in size, with the C class as 57.37m in size. L&G reckon the fund is USD386m.

On a quick look I don't see a dealing size.

torata
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Re: Global Small Cap

#454312

Postby torata » October 30th, 2021, 11:23 am

Deweyman777 wrote:I’m looking at increasing my exposure to global small caps. Not too fussed about emerging markets as I have these covered already, but equally relaxed if a small cap ETF/tracker includes them.

I’ve been looking at WSML (iShares MSCI World Small Cap ETF), which seems to fit the bill.

Anyone have any other suggestions?


The one suggestion I'd add if you're looking for real small cap is to use the morningstar 'portfolio' tab to look at the size of the holdings. It's often quite revealing. WSML for example is about 50% small and 50% medium cap, and it actually sits in their "Category: Global Small/Mid-Cap Equity (as of 31 Aug 2021)".
If you wanted to keep to a truer "small-cap", you might want to split it between say S&P 600 ETF, and small caps for the other regions (maybe OEICs/ITs as ETFs in this space are rare). But of course it's more expensive.

torata

EthicsGradient
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Re: Global Small Cap

#454681

Postby EthicsGradient » October 31st, 2021, 11:28 pm

https://fundcentres.lgim.com/srp/lit/7V ... K-PRIV.pdf

Looking at the L&G prospectus, the Class C minimum holding is indeed their standard (for class C) £100 million, but "The Directors reserve their right to differentiate between Shareholders and to waive or reduce the Minimum Subscription, Minimum Holding and Minimum Transaction Size at Share Class level", and "Class C Shares will be available to certain eligible investors who meet the criteria for investment in such Shares as outlined in the share class policy of the Manager or an affiliate of the Manager, which is available to investors in the C Class upon request." So basically institutional, which they deal with individually. I'm sorry for having assumed Monevator would have listed just funds open to the general public.

compscidude
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Re: Global Small Cap

#455242

Postby compscidude » November 3rd, 2021, 3:08 am

I’m looking at increasing my exposure to global small caps. Not too fussed about emerging markets as I have these covered already, but equally relaxed if a small cap ETF/tracker includes them. I’ve been looking at WSML (iShares MSCI World Small Cap ETF), which seems to fit the bill.


I think WSML is an excellent, almost perfect choice for that purpose. It is extremely diverse, directly on-theme for your interests, and cheap to own long term. It's large enough to avoid some mismanagement risk or quirky behaviour, or accidental capital gains event if outside an ISA (small ETFs are more likely to close randomly).

Global and sector weightings are good. It benefits from a little stock lending, it's ISA eligible, and it uses physical replication rather than synthetic/options (though notably, 'optimised' vs full direct holding. This might lead to some variation from the tracked index but probably is not so important).

Further, the bid-offer spread is extremely, extremely small. This makes it very cheap to purchase and efficient to rebalance. Finally, it trades frequently enough in the day to ensure there will be market makers/counterparties around to trade with. Likewise it should be supported by any major UK broker if you transfer your account around (interestingly, this is not true of all the largest iShares ETFs available in the UK).

In fact, WSML is already on my own long-term shopping list for these very reasons, at the right price. However, consider the chart (left side) here:

https://tinyurl.com/6yvab3ws

Looking at the USD-value chart, the price of the average global small cap in WSML has jumped 2.5x in barely more than 1 year (in fact the bulk of the jump in barely 6 months). While that is wonderful news for those who were buying at $6600 (chart), it is less wonderful for new buyers at > $15000. (Chart figures were given using entire fund history and $10000 initially invested, not WSML ticker prices).

I do not think that small caps in the current economy are pointing towards such wonderful long-term prospects now, versus say late 2019, as their high price would seem to imply. A chunky part of future returns are already eaten and in the price. Might I suggest there may be some dangerous element of speculative mania at play and representing some part of the current price?

If you are buying, it may be worth waiting - or dripping in money over a year to ensure you get an 'average' price over some timeframe - particularly, to take into account the effects of e.g. economic stimulus being withdrawn, market mania perhaps fading a little.

This is not financial advice to you. Rather, simply describing how I would approach this ETF / situation myself in such unusual times. Take a look at the Macro board at my 'food for bears' post if you are curious about why I would be nervous to rush into this ETF (or any ETF) right now. In short a great choice but perhaps not the best moment in history to buy in, at least compared with any point prior to 12 months ago.

Good luck with your investment regardless of what you choose.

Finally you might enjoy these two excellent videos by Ben Felix.

https://www.youtube.com/watch?v=uErHwq4M6pg

https://www.youtube.com/watch?v=2MVSsVi1_e4

comp

hiriskpaul
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Re: Global Small Cap

#455304

Postby hiriskpaul » November 3rd, 2021, 12:12 pm

As far as index funds are concerned, there are not really any small cap funds in the sense we think about them, eg FTSE small. They all contain medium caps. For truly small caps it would be necessary to look for active funds.

On valuations, I am not overly concerned about these despite the price rises over the last year. MSCI World Small is trading on around two thirds p/e and p/b of MSCI World. Anyone thinking of investing in small caps really should not be doing it at all if they are worried about the short term.

GeoffF100
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Re: Global Small Cap

#455343

Postby GeoffF100 » November 3rd, 2021, 2:33 pm

There is a FTSE Global Small Cap Index, but there do not appear to be any funds that are available to us tracking it.

hiriskpaul
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Re: Global Small Cap

#455347

Postby hiriskpaul » November 3rd, 2021, 3:04 pm

GeoffF100 wrote:There is a FTSE Global Small Cap Index, but there do not appear to be any funds that are available to us tracking it.

We hold Vanguard FTSE All-World ex-US Small-Cap ETF (VSS) in our SIPPs, but unfortunately HL will not allow me to buy any more of it due to PRIIPS/lack of conforming KID. It shows how we are being gouged for fees though when it comes to small caps, TER of only 0.11%! It also covers emerging markets.

https://investor.vanguard.com/etf/profile/VSS

1nvest
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Re: Global Small Cap

#477401

Postby 1nvest » January 31st, 2022, 6:17 am

GeoffF100 wrote:There is a FTSE Global Small Cap Index, but there do not appear to be any funds that are available to us tracking it.

BMO's BGSC Investment Trust isn't a tracker, but is perhaps close. https://www.bmogam.com/global-smaller-companies/about/

GeoffF100
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Re: Global Small Cap

#477408

Postby GeoffF100 » January 31st, 2022, 7:36 am

1nvest wrote:
GeoffF100 wrote:There is a FTSE Global Small Cap Index, but there do not appear to be any funds that are available to us tracking it.

BMO's BGSC Investment Trust isn't a tracker, but is perhaps close. https://www.bmogam.com/global-smaller-companies/about/

That fund is not likely to be a closer fit the the FTSE Global Small Cap Index than an MSCI Small Cap Index tracker, and will no doubt have higher costs.

1nvest
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Re: Global Small Cap

#477703

Postby 1nvest » February 1st, 2022, 9:21 am

hiriskpaul wrote:
GeoffF100 wrote:There is a FTSE Global Small Cap Index, but there do not appear to be any funds that are available to us tracking it.

We hold Vanguard FTSE All-World ex-US Small-Cap ETF (VSS) in our SIPPs, but unfortunately HL will not allow me to buy any more of it due to PRIIPS/lack of conforming KID. It shows how we are being gouged for fees though when it comes to small caps, TER of only 0.11%! It also covers emerging markets.

https://investor.vanguard.com/etf/profile/VSS

Institutional ('professional') Investors can still trade US ETF's/Mutual funds. Might be worth checking out the details with your broker. Typical requirements for registration for those not employed in the financial sector are something like a portfolio value of $500K+ (around £375K+ at recent $1.34/£ FX rate) and to have made 40 substantial trades in the last year, where a substantial trade is I believe $10K+/trade. So for example selling and then re-buying $12.5K (£9.4K) of a stock index fund 20 times would have you having enough demonstrable 'Trading experience'. If say £8/trade then a £320 'cost of admission' to be promoted from a regular retail to a professional investor. AFAIK being upgraded from a Retail to a Professional status is just a regulatory issue, all else remains the same.


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