The Lemon Fool

I have an investment in VEVE, the Vanguard global developed countries ETF. I notice that according to HL the "currency" is GBP, but the dividend carries an FX charge of 0.5% in my account, being declared in USD.

Excuse my ignorance, but I find Vanguard's offering quite confusing due to its number of funds: is there a VEVE equivalent in which there is no conversion charge on the dividends - or is this something one just lives with?


Arb.

You may well already know this:

FTSE Developed World UCITS ETF (VEVE) - Income

FTSE Developed World UCITS ETF (VHVG) - Accumulation

Even though the share class currency may be £, the base fund currency of any "world" fund is going to be $. So somebody is going to be converting it to £. Vanguard do two developed world index funds whose distributions are in £: Vanguard Developed World ex UK and ESG Developed World All Cap. These are both UK domiciled and their distributions are in £. They obviously have differences to VEVE i.e. no UK, or ESG.

I think most of the other ETF that track developed world are accumulation only.

There is also iShares Developed World Index Fund Dist (GBP Hedged). This has distributions in £ but the whole share class is GBP hedged - which may not be desirable in an equity fund.

helfordpirate wrote:Even though the share class currency may be £, the base fund currency of any "world" fund is going to be $. So somebody is going to be converting it to £. Vanguard do two developed world index funds whose distributions are in £: Vanguard Developed World ex UK and ESG Developed World All Cap. These are both UK domiciled and their distributions are in £. They obviously have differences to VEVE i.e. no UK, or ESG.

I think most of the other ETF that track developed world are accumulation only.

There is also iShares Developed World Index Fund Dist (GBP Hedged). This has distributions in £ but the whole share class is GBP hedged - which may not be desirable in an equity fund.

I have the global exUK VERX and my distributions are in Euro, Halifax gave me the rate - 1.1498 EUR To 1.00 GBP.

kempiejon wrote:
I have the global exUK VERX and my distributions are in Euro, Halifax gave me the rate - 1.1498 EUR To 1.00 GBP.

Sounds an interesting one, but it seems to be only Europe - not global.


Arb.

I think you have to put up with it, or use an accumulating ETF or an OEIC. The Vanguard accumulating ETFs still have wider spreads and I expect bigger discounts/premiums to NAV, but they have come down a long way.

I was interested to see that HL charges a competitive 0.5% for converting dividends into GBP. I am having issues with Vanguard customer service, and transferring my SIPP (which is wholly invested in VEVE) to HL and collecting £1,500 cashback is starting to look attractive.

GeoffF100 wrote:I think you have to put up with it, or use an accumulating ETF or an OEIC. The Vanguard accumulating ETFs still have wider spreads and I expect bigger discounts/premiums to NAV, but they have come down a long way.

I was interested to see that HL charges a competitive 0.5% for converting dividends into GBP. I am having issues with Vanguard customer service, and transferring my SIPP (which is wholly invested in VEVE) to HL and collecting £1,500 cashback is starting to look attractive.

That charge is what A J Bell are charging me for FX - what I wrote was ambiguous, sorry.

As regards the Acc version of the fund, I wonder if the various charges are all rolled in, so you would never know if there's anything to be gained.

Arb.

Arborbridge wrote:As regards the Acc version of the fund, I wonder if the various charges are all rolled in, so you would never know if there's anything to be gained.

What specifically is the issue?

GeoffF100 wrote:

Arborbridge wrote:As regards the Acc version of the fund, I wonder if the various charges are all rolled in, so you would never know if there's anything to be gained.

What specifically is the issue?

0.5% nicked off my dividend payments in FX charges. Question: if there a similar global devloped country fund which does not need this conversion?

I think the answer may be "no" as mose global companies would be paying in dollars.


Arb.

Arborbridge wrote:

GeoffF100 wrote:What specifically is the issue?

0.5% nicked off my dividend payments in FX charges. Question: if there a similar global devloped country fund which does not need this conversion?

I think the answer may be "no" as mose global companies would be paying in dollars.

You will not pay that if you buy the accumulating version of the ETF (Vanguard can convert currency very cheaply), but, as I have said, the transaction charges will be higher. You can also avoid the charge by buying OEICs or Unit Trusts, but most platforms will then charge you a swinging percentage platform fee. iWeb is an exception.

Arborbridge wrote:

kempiejon wrote:
I have the global exUK VERX and my distributions are in Euro, Halifax gave me the rate - 1.1498 EUR To 1.00 GBP.

Sounds an interesting one, but it seems to be only Europe - not global.


Arb.

Yes sorry I got turned around with veve and vere.

It is worth noting here that Vanguard's website shows the VEVE dividend as 1.73%. The OP is paying 0.5% on that, i.e. an annual cost of 1.73% * 0.005 = 0.00865%, i.e. he is paying less than a hundredth of a percent of his investment per annum in FX fees. It could cost more than ten times that annual cost to switch funds. The actual cost of switching is difficult to assess, particularly if he switches to an OEIC, where there is no published data on swing pricing.

Their is also a Fidelity World P inc BP8RYB6 GB00BP8RYB62 which have a ongoing charge of 0.12% and yield of 1.58% If that is of interest