Was machen Vanguard und FTSE anders als iShares & Co.?

Summary

In this video, the speaker discusses the advantages of Vanguard ETFs over MSCI ETFs, emphasizing their performance, cost efficiency, and unique index composition. Despite Vanguard's lesser-known status in Europe, it is a major player in asset management, using a cooperative structure that influences its low-cost offerings. Detailed comparisons reveal that Vanguard ETFs have marginally outperformed MSCI counterparts over recent years. Ultimately, the speaker encourages investors to focus on long-term strategies and not get caught up in minute comparisons, highlighting the importance of entering the market with well-chosen ETFs.

Takeaways

• 📊 Vanguard ETFs are gaining popularity in the European market despite not being widely known yet.
• 🏦 Vanguard is the second-largest asset manager globally, structured as a cooperative rather than a publicly traded company.
• 🌍 Vanguard ETFs are based on indices from the British index provider FTSE, not MSCI.
• 📈 The FTSE Developed World Index includes approximately 2,200 stocks, while the MSCI World Index has around 1,600.
• 🔍 The FTSE indices cover 90% of the global market capitalization compared to 85% for MSCI indices.
• 📉 Vanguard offers both accumulating and distributing ETF options to suit different investor needs.
• 💡 Vanguard ETFs have lower expense ratios (TER) compared to many MSCI ETFs, potentially leading to better performance.
• 🔄 Over five years, Vanguard's FTSE Developed World ETF outperformed its MSCI World equivalent by a slight margin.
• 📉 Both Vanguard and MSCI ETFs show similar performance, indicating that long-term performance differences may be minimal.
• 🔧 ETF performance can improve due to optimizations like securities lending, but this shouldn't be relied upon long-term.

Q & A

Why are Vanguard ETFs not commonly recommended by some financial advisors in Europe?

Previously, financial advisors did not recommend Vanguard ETFs because they lacked data from the index provider, Fuzzy. However, recent data has shown that Vanguard ETFs perform better than MSCI ETFs.

What distinguishes Vanguard from other ETF providers like BlackRock?

Vanguard is unique because it is not a publicly traded company; instead, it is structured as a cooperative, meaning it is owned by the investors in its funds, which influences its management and pricing strategies.

How does Vanguard's index selection differ from MSCI?

Vanguard primarily uses indices from the British index provider FTSE, unlike MSCI, which influences the classification of countries and the overall index composition.

What is the significance of the FTSE Developed World Index in comparison to the MSCI World Index?

The FTSE Developed World Index covers about 2,200 stocks across 25 industrialized countries, whereas the MSCI World Index includes around 1,600 stocks. This broader scope means the FTSE index may have different country classifications, impacting the overall performance.

What is the average annual return of the Vanguard FTSE Developed World ETF compared to the MSCI World ETF over the last five years?

Over the last five years, the Vanguard FTSE Developed World ETF achieved an average annual return of 9.51%, while the MSCI World ETF provided a return of 9.67%, indicating very similar performance.

How do expense ratios impact ETF performance?

Expense ratios represent the costs associated with managing an ETF. While lower expense ratios can contribute to better performance, they are not the sole determinant of success, as various factors such as fund management and market conditions also play significant roles.

What strategies do ETFs employ to enhance their returns beyond their underlying indices?

ETFs may engage in strategies like securities lending, which allows them to lend out shares for a fee, thus generating additional income. This can sometimes lead to returns that exceed the performance of their underlying indices.

Why should investors focus more on long-term performance rather than short-term fluctuations?

Investors should focus on long-term performance because short-term fluctuations can be influenced by market volatility and may not accurately reflect the underlying value or performance of the ETF over time.

What should investors consider when choosing between Vanguard and MSCI ETFs?

Investors should consider factors such as their investment goals, tax strategies, and the specific indices being tracked by the ETFs. Both Vanguard and MSCI ETFs can be suitable for wealth building over the long term.

How can investors easily access Vanguard ETFs for their investment portfolios?

Investors can access Vanguard ETFs through various platforms, including direct banks and online brokers. However, it is important to note that Vanguard ETFs may not be available on all trading platforms, such as Trade Republic.