The Lemon Fool

I read a lot on this site about the benefits of the VWRL product and indeed have a large portion of my money in this product.
VWRL: Vanguard FTSE All-World UCITS ETF USD Dis.

My understanding is that there is also an accumulating version which is quoted in US dollars:
VWRA: Vanguard FTSE All-World UCITS ETF USD Acc.

Does anyone know why the VWRA does not get the same amount of spotlight as the VWRL? I understand it is quoted in dollars and currency may be an issue? Surely if a person is growing their pot then the accumulating version is more beneficial?

I ask becuase I am considering selling my VWRL and buying VWRA.

TDM

VWRP is the accumulation one that I'm aware of.

Scott.

Or the VWRL could be replaced with iShares MSCI ACWI UCITS ETF (Acc) Epic: SSAC, as this is also an All Country World Index (ACWI) index.

TDM

swill453 wrote:VWRP is the accumulation one that I'm aware of.

Scott.

Thank you for the repy.

I see for some reason, that VWRP is not available on the iDealing platform.
TDM

TopOfDaMornin wrote:Surely if a person is growing their pot then the accumulating version is more beneficial?

It depends. If your shares are in a tax-sheltered account (SIPP, ISA) then there's a good argument for that.

But if in a general investment account, you still need to keep track of the notional dividends that are received, for Income Tax purposes. This is harder than it would be if you held the non-accumulating version.

Scott.

swill453 wrote:

TopOfDaMornin wrote:Surely if a person is growing their pot then the accumulating version is more beneficial?

It depends. If your shares are in a tax-sheltered account (SIPP, ISA) then there's a good argument for that.

But if in a general investment account, you still need to keep track of the notional dividends that are received, for Income Tax purposes. This is harder than it would be if you held the non-accumulating version.

No, the tax is slightly easier for the accumulating version in a GIA. You need to declare the Excess Reportable Income for both versions. You also have to declare the dividends for the distributing version, but not for the accumulating version. The main problem with the accumulating version is the wider market spread. VWRL is more expensive than VEVE with a market weight of VFEM, by the way.

Is there any Excess Reportable Income for VWRL ?
I rather assumed all the divis etc would be distributed
Mine is in an ISA so not too bothered...

VWRP appears to perform slightly better than VWRL. Not sure why.

Arb.

Arborbridge wrote:VWRP appears to perform slightly better than VWRL. Not sure why.

Arb.

I expect that'll swap as I now prefer VWRL to VWRP and have made my first buy last year.

kempiejon wrote:

Arborbridge wrote:VWRP appears to perform slightly better than VWRL. Not sure why.

Arb.

I expect that'll swap as I now prefer VWRL to VWRP and have made my first buy last year.

Oh dear, you and I are in the same boat!

Even worse for family relationships, I advised my daughter to put quite a large dollop in VWRP, and now it has become a little retarded.


Arb.

Arborbridge wrote:VWRP appears to perform slightly better than VWRL. Not sure why.

Arb.

Not sure what the "slightly better" means ?

The main differences between VWRL and VWRP are that VWRL pays a dividend every quarter, whereas the VWRP fund reinvests the dividends it receives from the companies it holds into the same companies. Otherwise, they are the same and contain the same securities.

Apologies if there is something more subtle that you are referring to.

AleisterCrowley wrote:Is there any Excess Reportable Income for VWRL ?
I rather assumed all the divis etc would be distributed
Mine is in an ISA so not too bothered...

Not in an ISA (nor SIPP) but in a general account it would appear the answer is a "yes".

https://www.itinvestor.co.uk/2019/06/va ... -etf-vwrl/

short snippet from the linked article

"The other dividend-related drawback I mentioned earlier arises because VWRL is an offshore fund (it is based in Ireland). If you hold a fund like this inside an ISA or SIPP then its offshore status shouldn’t be a problem. Outside of these tax shelters, it’s a different story. Most offshore funds have what is known as UK reporting status. This is a good thing as it means that when you sell them, any profit you make is classed as a capital gain rather than income (the latter generally attracts a higher rate of tax). But if the fund doesn’t distribute all the income it receives over the course a year then you may have to pay tax on what is known as ‘excess reportable income’ as well on any dividends you actually receive. In other words, even though the fund in question didn’t pay out all this income, you are still deemed to have received it for tax purposes. Here things can get tricky because excess reportable income generally doesn’t get included on the year-end tax cetificates that brokers provide you with. You have to go the fund’s website and dig it out yourself. "


There's an example!

(then there is the end of period + 6 month rule.... )

monabri wrote:

Arborbridge wrote:VWRP appears to perform slightly better than VWRL. Not sure why.

Arb.

Not sure what the "slightly better" means ?

The main differences between VWRL and VWRP are that VWRL pays a dividend every quarter, whereas the VWRP fund reinvests the dividends it receives from the companies it holds into the same companies. Otherwise, they are the same and contain the same securities.

Apologies if there is something more subtle that you are referring to.

Not very subtle, I'm afraid. I just checked the two using HL's charts and VWRP is "slightly better" - but I am making the assumption that HL are showing the TR for both, not VWRL after distribution. I haven't found anything in the "help" section which clarifies that.

GeoffF100 wrote:

swill453 wrote:

TopOfDaMornin wrote:Surely if a person is growing their pot then the accumulating version is more beneficial?

It depends. If your shares are in a tax-sheltered account (SIPP, ISA) then there's a good argument for that.

But if in a general investment account, you still need to keep track of the notional dividends that are received, for Income Tax purposes. This is harder than it would be if you held the non-accumulating version.

No, the tax is slightly easier for the accumulating version in a GIA. You need to declare the Excess Reportable Income for both versions. You also have to declare the dividends for the distributing version, but not for the accumulating version.

What makes you think that? Dividends are taxed the same whether they are distributed or accumulated.

Arborbridge wrote:

monabri wrote:

Arborbridge wrote:VWRP appears to perform slightly better than VWRL. Not sure why.

Arb.

Not sure what the "slightly better" means ?

The main differences between VWRL and VWRP are that VWRL pays a dividend every quarter, whereas the VWRP fund reinvests the dividends it receives from the companies it holds into the same companies. Otherwise, they are the same and contain the same securities.

Apologies if there is something more subtle that you are referring to.

Not very subtle, I'm afraid. I just checked the two using HL's charts and VWRP is "slightly better" - but I am making the assumption that HL are showing the TR for both, not VWRL after distribution. I haven't found anything in the "help" section which clarifies that.

I've just resorted to HL's tools but they weren't working . I believe though that if you graph the two then it is a like-for-like comparison of TR. This makes sense if the 2% divi + any ERI is being reinvested into VWRP and not shelled out as a divi - so returns might be higher over the last 5 years (max plotting timeframe).

AleisterCrowley wrote:Is there any Excess Reportable Income for VWRL ?
I rather assumed all the divis etc would be distributed
Mine is in an ISA so not too bothered...

Yes, $0.0023 per share last year:

https://fund-docs.vanguard.com/TaxdocumentDec2021.pdf

GeoffF100 wrote:

AleisterCrowley wrote:Is there any Excess Reportable Income for VWRL ?
I rather assumed all the divis etc would be distributed
Mine is in an ISA so not too bothered...

Yes, $0.0023 per share last year:

https://fund-docs.vanguard.com/TaxdocumentDec2021.pdf

But might there be a calculation to do to reduce this figure depending on when one purchased if not held for a full reporting period.

Arborbridge wrote:VWRP appears to perform slightly better than VWRL. Not sure why.

AJ Bell quotes exactly the same return for VEVE and the accumulating version last year. Morningstar showed VEVE as slightly ahead, over a slightly different time period (it only has closing prices). The two ETFs are separate shares, and can go to a small discount or premium before the Authorised Participants can fix it. I expect that is what is happening. The accumulating versions have not been around for long, so we do not have much data. Vanguard seems to want to hide them away.

mc2fool wrote:

GeoffF100 wrote:

swill453 wrote:

TopOfDaMornin wrote:Surely if a person is growing their pot then the accumulating version is more beneficial?

It depends. If your shares are in a tax-sheltered account (SIPP, ISA) then there's a good argument for that.

But if in a general investment account, you still need to keep track of the notional dividends that are received, for Income Tax purposes. This is harder than it would be if you held the non-accumulating version.

No, the tax is slightly easier for the accumulating version in a GIA. You need to declare the Excess Reportable Income for both versions. You also have to declare the dividends for the distributing version, but not for the accumulating version.

What makes you think that? Dividends are taxed the same whether they are distributed or accumulated.

Yes, but the dividends are not distributed. For foreign domiciled reporting funds, they have to be declared as part of the Excess Reportable Income.

GeoffF100 wrote:

Arborbridge wrote:VWRP appears to perform slightly better than VWRL. Not sure why.

AJ Bell quotes exactly the same return for VEVE and the accumulating version last year. Morningstar showed VEVE as slightly ahead, over a slightly different time period (it only has closing prices). The two ETFs are separate shares, and can go to a small discount or premium before the Authorised Participants can fix it. I expect that is what is happening. The accumulating versions have not been around for long, so we do not have much data. Vanguard seems to want to hide them away.

The chart lines for VWRP and VWRL are slowly but surely diverging since the launch of VWRP.

Arb.