This ETF tracks the performance of almost all the equities on the London Stock Exchange’s main market.
Hi All,
I currenlty invest in the UK market through the VMID (250) and ISF(100) ETFs.
I’m keen to know people’s thoughts on replacing them with either FTAD / FTAL. Has anyone looked into this / done this?
My thoughts dumped are:
- FTAD seems to very closely match the ASX index, which is ideal.
- FTAL actually does better than ASX, which is great.
- FTAL/FTAD prices are very difference £5 vs £60 (i could invest in FTAD with lower spare change).
- I would gain access to the companies outside of 250 & 100.
- I would only have 1 ETF for the UK.
- I would still like to receive dividends but it seems kinda silly to take that approach if i’d be missing out on the better perfomance of FTAL.
- I suppose I would have less control over allocation within the fund (i looked into it and FTAD is 84% FTSE100, 13.7% FTSE250 & 2.3% Everythign else).
- Dividend yield of FTAD is less than ISF but more than VMID. (I havent looked into how much these fluctuate yet).
- The TER is 0.2% for FTAL/D, 0.1% for VMID and 0.07% for ISF.
I know in the scheme of things it probably doesnt matter too much but I’m interested to know other peoples thoughts on this?
Blue:Allshare Index
Yellow: FTAL
Cyan: FTAD
Orange: VMID
Purple: ISF
Not specifically those funds, but I swapped to FTAL from CSUK (0.33% TER), after reviewing the ETFs I was invested in.
Obviously beneficial from a fees perspective in my particular case amongst other things.
You’ve found the key points, which is good, not quite got the dots drawn together.
As a TLDR - The difference is with the FTSE 100 (ISF) and FTSE 250 (VMID) ETFs you have currently you’d have to manage the market cap weightings to get an accurate representation of the UK stock market returns.
With FTAL/FTAD you’re paying a slightly higher fee for the fund to manage the market cap weightings for you, plus a wider set of shares (small impact at 2.3% as you’ve found).
Yeah the index/companies on it are same as the distributing ETF, obviously with the funds aim of tracking the index as closely as possible.
This is from the dividends being reinvested into the same companies shares (based on market cap), which increases the funds underlying net asset value.
Can be seen in the screenshots that this fund still tracks the ups and downs of the index fairly closely.
There isn’t any real difference in returns between FTAD and FTAL, maybe minor price differences (can sometimes be a small premium on dividend funds), it’s just that FTAD distributes dividends, rather than reinvesting them for you like in FTAL
Correct, it tracks the whole UK stock market, based on market capitalisation
See the screenshot below showing CUKX in purple (the accumulation fund equivalent to ISF), the FTSE 100s heavy weighting is apparent and quite clearly shows trend wise in comparison with FTAL (plus FTSE 100 has had higher returns compared to the FTSE 250 over the last 5 years).
Thanks @woodyblade,
That’s actually really helped me understand this a bit more. Maybe stupidly, I hadn’t really considered the impact of the weighting of market cap for the UK 
. My method is to have set allocations for the regions of the world. So as long as my overall UK holding matched that, I didn’t really think about the maket cap of it all.
Now looking at my holdings, I actually have more money in the 250 than 100 which would have actually resulted in a lower return than if I had it weighted more closely to the all share, so I will definitely be re-evaluating and moving to a single ETF.
I think I might still opt for a dividend paying position as I will be re-investing them anyway but I will at least have the freedom to re-invest into my other holdings.
Do you happen to know why FTAD is £5 and FTAL is £60?
Also, can I ask how did you actually move your position?
- Did you bulk sell CSUK and then bulk buy FTAL or
- Periodically sell off CSUK to slowly buying FTAL
I think i will probably go with the perodic selling/buying for dollar-cost averaging reasons.
Thanks gain
Ben
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I did the same mistake couple years back when setting up my SIPP here, used CSUK (mostly FTSE 100 holdings but not all), it had broadly the same return as the FTSE All Share, so tad lucky/no harm done.
But same I split my SIPP out into allocations based roughly on country/regional weightings, ISA I just use VWRP (Vanguard All World ETF) for simplicity.
I believe you’ll get roughly the same effect, just slightly more manual intervention, with accumulating funds you’d still have to rebalance occasionally, to account for differing returns in markets at least with the above mentioned regional split approach.
Different initial listing prices I would gather, FTAL listed around £30 in February 2012, FTAD a bit under £5 in April 2018
It’s likely newer ETFs have lower initial prices (I’ve not specifically looked if this is the case, just thinking aloud) to lower the barrier to entry for retail investors compared to prior years.
I bulk sold CSUK and moved straight to FTAL, just generally preferred the more hands off approach, quick transactions and accumulating funds with my SIPP and other pension.
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