The S&P 500 vs. The World - What's the Best Index?

This video compares the S&P 500 to a global index fund and I discuss the pros and cons that investors need to consider when choosing which index fund to invest in.
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[@angelyordanov108]

Awesome take on an important dilemma for new investors like me! Keep up the great work 😊

[@TobyNewbatt]

Thanks for watching!

[@lilytea3]

0:07: 📊 The video compares investing in the S&P 500 index with investing in a global index fund. 3:32: 📈 The video discusses the future of the stock market and the importance of diversification in the S&P 500 Index Fund. 6:18: 📈 International stocks have historically outperformed US stocks in certain time periods, highlighting the potential for growth in a global market. 8:56: 💰 Diversify your investments and consider a global index fund to mitigate the effects of exchange rates and focus on long-term investing. 11:53: 💰 Invest regularly for the long term and choose a strategy that aligns with your risk tolerance. Recap by Tammy AI

[@valerienewbatt9678]

So informative as always

[@DigitalDiva03]

As a new investor, I have no idea what's best right now and will learn what's best for my portfolio, over time. Right now I have VG Global AND S&P500 on a set and forget mode. The best thing about Vanguard is their platform is not enticing to log in. I have a few more years left in me yet so let's see what the next 12 month looks like!

[@brownfox3180]

Another very interesting and informative video, cheers Toby.

[@TobyNewbatt]

Thanks for the support bud and enjoy the rest of the BH weekend!

[@VideoAssociates]

Im 50% in BlackRock SP500. I see it this way that these huge US companies have their business branches globally anyway so they are essentially international in every sense

[@drewsykes8152]

The large and mid cap world fund I use is two thirds US stocks anyway and just gives me an extra feeling of reassurance not being all in on one market, whilst I don’t have the interest or skill set to invest in more than one fund having to worry about actively rebalancing etc. in my case it needs to be as passive as possible or I wouldn’t do it.

[@richard1342]

Great video as usual. Are there any upper financial limits that you are constrained (allowed to invest) by with any of the invest engines you show in your list above?

[@gileschalk212]

I buy both, 40% global, 40% S&P, 10% emerging markets 10% global small cap.

[@whxpi1561]

How has this worked out for you?

[@andresgarciacastro1783]

You're actually going 60% sp, since 50% of global is already SP.

[@TheCompoundingInvestor]

Great video Toby. Outside the ISA it’s the S&P for me as it has a lower yield than VWRL. Inside the ISA I prefer VHYL with its bigger yield. Definitely food for thought. Keep up the great work

[@me-myself-i787]

Yield doesn't matter. What matters is the total return. VWRP has a much better return than VHYG. And if you're not retired yet, you should be using accumulation funds. If you are retired, you should use index-linked gilts for any income requirements, and keep any extra money in accumulating equities. But also, I'd recommend SSAC over VWRP. It has a lower expense ratio.

[@julianfp1952]

A great video. One interesting follow up might be to go one step further down the global diversification explorations and do a comparison video on FTSE All-World vs FTSE Global All-Cap (where the all-cap index adds some small company exposure). I think that in the past global all-cap tracking wasn't accessible via an ETF but I noticed fairly recently that Vanguard now have 2 ETFs tracking the FTSE Global All-Cap index, EPIC symbols V3AM for the distributing fund and V3AB for the accumulation fund. Both are domiciled in Ireland with an OCF/TER of 0.24% which isn't massively more than the 0.22% OCF/TER of Vanguard's FTSE All-World tracker. I'd be interested in your thoughts on those.

[@carlenecayhill]

Great video Toby as usual, I'm far too indecisive and don't have a crystal ball so try and get equitable exposure to both the S&P 500 and All World indexes

[@TobyNewbatt]

best way to think! :)

[@secretagentrandybeans7533]

I have: Pension - 100% global ISA - 80% global 20% gold I feel with most globals being 50-60% USA its basically the S&P500 with some added diversity

[@carlosarodriguez7266]

No sir is 75 % 😁

[@RayRay79]

Both are great indexes to own! I do like VWRP and VUAG and I believe if you stay the course long term, you be fine.

[@DanFandelli]

I used to think S&P 500 would outperform VWRP based on recent history, but that's the problem, 'recent history' is a bias. The market has been dominated by the USA but in the next 30 years that place could be taken by China, Japan, or who knows who.

[@TobyNewbatt]

Good food for thought Dan, i think thats always good to consider how much we place on the past in terms of our analysis. :)

[@kippsguitar6539]

Japan? Somebody isn't paying attention, did you mean India?(now bigger than China in population), Indonesia, Vietnam etc etc will all benefit from a weakening USD, Japan is the most indebted nation in history with a collosal again population (apart from USA who has the reserve currency), good luck

[@kippsguitar6539]

​@@TobyNewbatt he actually said Japan!

[@TobyNewbatt]

@@kippsguitar6539 I read the comment from the perspective of stock market returns not necessarily saying that Japan will somehow overtake the US - i.e. in the next 10 years the Japanese market could outperform the S&P 500, it's entirely possible :)

[@kippsguitar6539]

​@@TobyNewbatt that's true but a strange example, Japan is in serious trouble but true the stock market is NOT the economy, thanks

[@LJB-ob6uq]

awesome content!

[@TobyNewbatt]

Thank you!

[@TheNicoliyah]

I buy both

[@suga2034]

Mate, good video as always..!! I stick with my stocks and shares ISA SIP investment rather lazy index investing..!!😁😁

[@anthonyjanes9973]

Thanks Toby, I have just set up a pension for my son, Vanguard S&P 500 ETF, he's got 37 years to wait so hopefully we are on the right horse.

[@TobyNewbatt]

Should be plenty of time nice work!

[@Duncan94]

I don't think you can go wrong with either approach - if you prefer less volatility and don't mind the lower return then a global ETF might be your best option. I think the US will continue to be an economic powerhouse in coming decades so I'm happy to concentrate on 100% US equites for the time being. As you mentioned, the only thing to consider (apart from fees) is whether you're hedged or unhedged which generally cancel each other out over the long term anyway!

[@harikrishnanchandramohan4209]

Assuming US is a powerhouse forever is no different from assuming apple is the most valuable company forever. Those extra returns are tempting, but you first need the goose alive more than the golden eggs. 30 years back would you have said the same about US or would you have vouched for Japan.

[@sethanith3181]

Hi Toby, great video! Would you consider doing one on investing for your children? I’m looking to put a small amount away monthly (for the next 18 years) for my daughter and would love to know your thoughts since these are fee free..

[@wingtsun1]

As said in the video, they should both do well in the long term, but I don't know which will do better. I simply invest 50% into both, so no matter what I will get the average and don't have to worry about being "wrong".

[@kippsguitar6539]

You are misunderstanding the global index will have most of the s & p 500 companies within it so no point in your strategy, check the holdings inside the etf

[@wingtsun1]

@@kippsguitar6539 not misunderstanding no - the global index will move the USA % as needed - if I wanted just global id be 100 % global - if I wanted 60% usa 30 Europe 10 em i'd just pick those

[@HITPOINTgrime]

@@kippsguitar6539 They want the average performance of two choices. The fact that one choice includes the other doesn't invalidate the strategy

[@george6977]

😊Interteresting graph of US out/under performing the world, correlated to USD.

[@TobyNewbatt]

Yep indeed!

[@VegasMilgauss]

Lower fees, better performance. No brainier! 🇺🇸

[@abdulrahman31350]

Great video toby. Ive just moved my pension into vanguard. Even though the snp500 makes 70% of it, ive allocated the other 30% amongst the ftse 100 (because of dividends and home bias), VHYL (did i mention i like dividend😅😅😅) and vwrl.

[@TobyNewbatt]

Dividends are fun and very motivating to get there is no question about it! :)

[@Indi3flow]

Hi Toby I really like this video and thanks for showing how you can build a cheaper, more versatile version of VWRL. I’ve setup something similar myself after watching this and just wondered if you could explain why you did not include any exposure to Japan like the VWRL has, say by including VJPN also?

[@TobyNewbatt]

I could definitely add in JPN at anytime, personally for now I'm happy where I am I really don't think that market is in a great place right now...although you could argue thats a great time to buy!

[@NatalieLane-mb3ks]

If you wanted to focus on VWRP, but supplement with some VUAG, what % would make sense?

[@Guus367]

Great video again - i fully agree with your predicament of no fuss ETFs and of continuously keep investing during the ups and downs, because in the long run, this strategy will pay off . I have a question, you mentioned a few times about the dangers of hedging currency when using the index trackers, i.e. like the IGUS does for the S&P500. When one is about to retire, i would have thought that eliminating current risks out of the equation would be a good thing - is there something wrong with this thinking?

[@TobyNewbatt]

great comment and I think it could make a lot of sense to eliminate exchange rates where possible as a variable - but I don't believe that hedging can completely do this for you as to my understanding - happy for someone much better qualified to tell me otherwise

[@barrycole5930]

I finally opened a stocks and shares ISA thanks in part to your video’s. But i struggle with fee calculations. I am using Hargreaves Lansdown, and for global indexes if i invest £100 or so monthly, VWRP wants fees of over £11 to for that currently £88 share, vs an HSBC global index with what seems to be low longer term fees. Im confused why VWRP is so popular vs others, what am i missing? I feel like it is geared towards investing larger amounts at a time so not suited to smaller investments. Thanks for the awesome content.

[@chrysanthosrialas5383]

Having both is the best along with bonds and any other kind of security, diversifying assets is fantastic

[@chi_cha]

what about the double fees ?

[@michaelsharman7176]

I’m in both

[@craigrpennyify]

Great video as always, keep up the great work. My question is, why don't more people invest in a Nasdaq index. I realise that this is more volatile but the rewards could be greater, especially now as the markets are low? Love to here your thoughts.

[@TobyNewbatt]

Thanks bud! I think plenty of people do own the QQQ BUT it's not a true index as it's curated and managed by committee (which technically the S&P 500 is as well). Just like other indexes like electric cars, banks, property indices etc. these are not 'true' indexes in the passive sense. nothing wrong with it at all, just wouldn't sit in my bucket of a passive index fund, where the S&P 500 just about slips in. Plus, lets not forget that nothing in the Nasdaq is unique it's all companies you get elsewhere except much larger concentrations.

[@billcashman5900]

The S&P 500 has 3 advantages over international funds: lower costs, simpler (no foreign tax credit to deal with), and more tax-efficient. Compound those advantages over decades and it will be very difficult to beat.

[@Norfolkpaul]

Nice video 😊

[@TobyNewbatt]

Cheers Paul!

[@willadye6033]

Great video as always! Is there a reason you chose the VRWL over the VRWP, if you’re reinvesting the dividends back into the ETF anyway?

[@TobyNewbatt]

VWRP was not available when I made the video so yes VWRP is my preferred way to go now :)

[@chqshaitan1]

Great video. I have recently changed from a uk centric fund (Vanguard life strategy) into a FTSE world for my core, and have also invested a few k into scottish mortgage as a satellite investment, to make things more interesting:)

[@TobyNewbatt]

Love it Raymond, you've clearly found something that works for you, similar to me, mostly index but have some fun on the side to keep us interested :)

[@timetraveller3063]

Good diversity and mix

[@AndzCollinson]

Hi toby what are your thoughts on adding some small caps like WLDS and ISP6 to let say s&p 500 or FTSE All world???

[@MickieJamesFTW]

I went from s&p to global, I already hold some of those top holdings as single stocks

[@kelle_li]

Heavy on the S&P 500 for me, but along with it I DCA into the likes of FTSE 100 and 250, Developed Europe, Emerging Markets and US Small cap

[@TobyNewbatt]

Find what works for you :)

[@blade11229]

I have my portfolio split into 3 ftse 100 wrld index and sp 500 then another fir “fun” stocks

[@XORTION]

All in on ARK, VTI and FTSE 100

[@sumitkumarsingh3527]

Informational....

[@TobyNewbatt]

Thanks!

[@squadmeta]

FTSE USA GBP hedged accumulating. Blackrock.

[@andybarrett9384]

Hi Toby, I do 75% global split between investco and vanguard and 15% S and P 500 rest in ftse 250. Just my thoughts on diversity

[@HL-uw7fk]

What’s your opinion in buying ETFs like S&P 500 in Eur since some of us are based in EU countries?

[@clarenceishmael9615]

I've had both of these for about a year now and they're both currently doing well but the s&p is about 18% up and VWRL is about 10% up. 👍🏾 On flipside my VHYL is minus 1.7% and VUKE is minus 7.3%!🤦🏽‍♂️

[@haggis58]

I like VHVG - FTSE developed world, which has just over 2000 companies and excludes the emerging market. It has a expense ratio of just 0.12% which is pretty cheap.

[@TobyNewbatt]

Thats a solid choice Alan!

[@R3tr0v1ru5]

Lol, why would you not want emerging markets.

[@matthaeus_jacomus]

I use FTSE Global All Cap for my SIPP then take a little more risk in my ISA (although still all ETF).

[@TobyNewbatt]

Nice idea this, i'm similar, i do have some individual stocks but mostly index and I think everyone should find a great balance for themselves :)

[@declanmcardle]

@7:00 S&P500 can be bought in hedged GBP/EUR so we don't have to -gamble- play ForEx too. Or is this what you're about to say?

[@leifharmsen]

I'm glad I started with s&p 500 because it happens to have done very well recently, but I have since changed to VT because I think it has better expected future returns and the safety of more diversification. Also, tech can crash really easily as yesterdays brilliant new inventions become tomorrow's trash. I appreciate the diversificaiton of currencies too. I also started with a huge home bias, investing too much in the tsx - now my canadian evestments are down to 15%, which is still probably too much home bias seeing as how the TSX is only about 3% of the world by cap.

[@ScaleCrawling]

I have split my investment into an S&P 500 Index Fund, a Nasdaq-100 Index Fund, a Global Index Fund, a European Index Fund, a Tech Index Fund and a Swedish Index Fund. Is that a silly amount of diversification? All of the Index Funds I've chosen has achieved several around 3-500% in returns during the last 10 years.

[@georgioslykakis1112]

I invest mostly US and Canada. US for growth and Canada higher dividends.

[@Riaan3108]

Most ppl are already invested in to a global fund similar to the one used in this example; thus why I’ve gone for the Vanguard S&P accumulated fund for my ISA investment.

[@TobyNewbatt]

Nice one Riaan!

[@kippsguitar6539]

How did you know that?

[@Riaan3108]

@kipps guitar reading of pension fund portfolios (worked for 2 blue chips and both had global funds within their pensions). Any further insight from Toby?

[@fredatlas4396]

@Riaan3108 Which Vanguard Acc class fund are you referring to. Is it the US fund tracking S&P total US stock market index

[@KelechIwuaba]

All of the above is my play

[@MakingMoneySimple]

Brilliant video Tobes! I'm a global man, All Cap for me, but as you say most approaches have and probably will continue to generate good returns

[@alexsotir]

Useful and objective video. Thank you for this.

[@TobyNewbatt]

Glad it was helpful!

[@Hawks1980]

I couldn’t decide so just went with both from Vanguard, 50% FTSE All World, 50% US Equity. 100% stocks, no bonds as I am investing for the long term

[@TobyNewbatt]

Good luck buddy. Now it's all about the long long term! Going to be a bumpy ride but hold on for dear life

[@jacc88888]

With the USA starting to tear itself apart with it’s political and cultural wars and also the huge growth in the emerging economies (most recently I guess countries like India as well as China’s meteoric rise to become a world superpower) I’m wondering whether the S&P 500 will still be a good investment even if the US economy weakens and the dollar stops being the main reserve currency in the world? Personally I feel for long term Global index funds mights be a better bet.

[@joaorolo6033]

FTSE All World and S&P500 in the same portfolio makes sense? I think that a 66% overlap is a lot

[@inh7281]

iShares US equity index fund is also a good option. 0.05% fee. A little cheaper

[@mikael8276]

Simple: buy both

[@1337b3nnyvav00m]

I like investing internationally with a value tilt. Investing globally is too big. Using ETFs like FNDF, AVDV, and DFEV I can at least have a significant value tilt while excluding poor performers.

[@1292liam]

Tobes, what do you think of the ETF's - IITU and EQQQ ? -A large lump sum, into those, this year, is a good idea? I won't be investing into it regularly, just sticking a fat lump sum in.

[@me-myself-i787]

Definitely don't do EQQQ. It's just the 100 largest companies on the Nasdaq. It's completely arbitrary. I wouldn't recommend IITU either. Tech stocks have outperformed historically, but there's nothing indicating that they will continue to do so. I would recommend putting the lump sum into IWFQ. Although, when that comment was written, it would've been a good idea to stick a lump sum into 0IA2 or 0I9L. You would've made a ton.

[@JackStannard93]

I got mainly S&P and a small amount in emerging markets

[@TobyNewbatt]

Nice one Jack, this is what I used to have. i do think there is a wide world out there with great opportunities as much as I love those US stocks!

[@formulavon]

Great video. The only other consideration for me is the fee. SP500 funds tend to have lower fees than global funds due to fewer companies.

[@TobyNewbatt]

Yes great point and I was going to discuss this in the video a bit more :). I have managed to create a global ETF portfolio in my InvestEngine account for 0.09% which is pretty nice!

[@kippsguitar6539]

​@@TobyNewbatt not really the case with some super cheap ACWI funds also cheap

[@kippsguitar6539]

The difference is often tiny, especially when an ACWI fund, small commission too

[@kead6636]

VT has a TER of 0.07%

[@TobyNewbatt]

@@kead6636 Yes, but for UK investors we can't invest in US-dollar-denominated funds so unfortunately we have slightly higher costs :)

[@dave7244]

7:56 While it might be true that Kwarteng caused a bunch of market instability due to the mini-budget. The UK pensions operators were not managing their risk properly which caused which then caused the BoE to step in regarding the Gilt market. I personally think Truss got shafted because she wasn't part of the managerial class, but that is just my personal conspiracy theory.

[@FoxThirteen13]

The VHVG ETF is my prefered index. Global diversification of developed countries focused on large and mid cap stocks.

[@kippsguitar6539]

But missing out on rising starts like India is probably a mistake

[@VirtualDarKness]

@@kippsguitar6539 SEMA could cover that, right? And you can balance the two yourself

[@inh7281]

Vanguard US equity index fund. Also a good option. 3000 + companies and includes small caps as well as S&P 500 big hitters. Basically the whole US market exposure And good diversification

[@steste4168]

SPDR world is my choice. Definitely the world type best.

[@itouch00]

Hi Toby I know you briefly touched upon it at the end of the video but what are your thoughts on investing in both? The majority of my investment is S&P but as of last month I bought FTSE all-world - currently 80-20. Would you continue investing in both? On a separate note, I would love for you to do a video on the BRICS currency. I keep hearing that may be the dominate currency in years to come which is why I'm nervous to put all my eggs in S&P

[@TobyNewbatt]

It really is up to you, but just remember that investing in both is overweighting the S&P 500 above it's market weight. So all this means is that you're betting on the US over and above it's already major weight in your portfolio. Could be a good idea, might be a bad idea - there would be no way to tell unless we knew the future. Personally, I think simplicity is usually the best way forward, but whatever keeps you invested in the long term is the way forward. And yes, nobody knows what the future currencies of the world will look like, how the exchange rates will affect us, so the best bet...buy the whole world :)

[@TheNicoliyah]

I have both along with an emerging markets fund. Currently down on the emerging markets but the losses have been narrowing

[@antoniozonno5220]

E se una persona decide d investire sia sull s&p500 che sul msci world? Che succede?

[@alastairdickson5131]

The pound has strengthened against the dollar so maybe have to buy some more S&P

[@nigelprice3929]

Hi Toby There is a lot of focus on the SP500 but that is quite a lot of companies whose fortunes might be quite mixed. I know you mentioned here those top 10 companies and the percentage they take up but i wonder if you have looked at just those 10 companies and how they have performed compared to the SP500 overall. Would an SP50 or SP100 outperform the SP500 ? Some of the comments here about the fx impact are really surprising just how much of a negative impact they are having Cheers Nigel

[@TobyNewbatt]

Nice idea that for a video Nigel! I think from the top of my head, those top 10/25 odd companies have pretty much carried the whole index as you can see how much impact Apple, Google, MSFT have had etc.

[@nachi1588]

I was just reading an article regarding this, nifty 50 has grown 1493% since 2000 and in the same period S&P 500 has grown by 246%. I think we need exposure to nifty 50 in the UK.

[@Fizz511]

AJ Bell do Nifty 50 tracker ETFs

[@nachi1588]

@@Fizz511 are they in GBP or GBX? If not it complicates things with costs but thanks I will check it out.

[@molex114]

Being very new to investing and not knowing as much as I should I hold the S&P after all it seemed to be the leading bench mark index, although the threat to the dollar may change that. And then being English I also hold the FTSE100 which is out doing the S&P at the moment I also bought an all world to diversify a little more as well as an emerging markets and as I had a little left a high yield. So probably to diversified but the idea was to run them for a while and then either ditch 2 and just hold 3 or keep the to lemons but stop adding funds to them and put it in the other 3 and just see where they ended up. Like I said new to this and still learning so this may change

[@TobyNewbatt]

Just find what works for you, stick at it for a long time and keep buying assuming you're a long term investor :). It's often best to not flick too much between funds based on past performance after all, we dont know the future, otherwise you'll always be chasing.

[@molex114]

@Toby Newbatt For sure. The only uncertainty I have in my plan is whether to cut from 5 to 3 funds. I have bought a few dividend stocks which I intend to keep also but the individual stocks are the ones I'll play with if at all they are my safety net to stop me playing with my funds, but yes indeed in for the long term with regular monthly pay ins and everything set to auto reinvest. Hardest part so far is not stopping myself from selling out but from keep buying more

[@fredatlas4396]

​@@molex114FTSE all world is already about 10% global emerging markets, so you could just scrap the emerging markets fund & put that money into the ftse all world

[@molex114]

@Fred Atlas thanks for the input makes sense I'll look into that 👍

[@anniekatihabwa4351]

Hi Toby, New to investing, have had a life strategy 100% equity fund for nearly a year, putting in £100/month. Have a lump sum money of £10000 and I’m just wondering if I should pay it into the one I have or where else you would recommend I invest it. I’ll need the money in 5 years to pay off my HTB tho so.

[@harryclarke1482]

Hi Toby, great video. If you had to invest only on one platform for the foreseeable future, which would you pick? I'm trying to decide between Vanguard, Invest engine and Trading 212. Leaning towards trading 212 but just slightly nervous about putting most of my life savings into it.

[@RayRay79]

T212 is covered by FSCS so one would think it be okay up to £85k

[@lawrencer25]

Why wouid you put all your life saving on on one platform. Regardless if its protected up to £85K . Never heard the saying dont put all your eggs in one basket? Diversification doesn't only mean tools. Your portfolios should be - Low risk Medium risk High risk That will depend on your risk levels what percentage of money you put in each . Always have some in separate account for a rainy day , which pays good interest and your capital not at risk. I wouid say if you have a large amount, speak to a qualified financial advisor . Also Pension are a great way to invest too . Your choice. Good luck ❤

[@harryclarke1482]

Thanks @@lawrencer25 this is good advice. I don't have a huge amount its more i think a platform I candrop this lump sum in now and keep investing for years (im 24 atm). I ideally dont want loads of different isas with different providers so I can keep paying into 1.

[@RayRay79]

@@lawrencer25 I agree with you re pensions and SIPPs!

[@Duncan94]

Trading 212 is the best platform in my opinion. The only downside compared to Vanguard is that their ISA is not flexible. If it'll help you sleep then go with Vanguard, you'll just be paying 0.15% more for the privilege!

[@leona_devon]

Why not both? In T212 I have a pie with several different ETS, S&P 500, FTSE ALL World & Global indexes as well as Emerging and developed ETF's all at different %'s. It might be doubling up in some cases, but my thinking was to have a wide spread of everything, right or wrong, be interested to know.

[@TobyNewbatt]

You can if you want but you're then overweighting (doubling up) on stocks above and beyond their market weight. Perfectly fine to do if you want, BUT then you are betting that the big stocks will continue to outperform and get bigger compared to the rest of the market. Unfortunately we do not know that, if we knew the future we'd all be millionaires. Best to keep it simple IMO, but its really all up to you. How would you know when you have the balance right? Why not leave it up to the market with a single global fund :)

[@timlodge8267]

S&P every time.

[@MattMcQueen1]

As a veteran of Japan’s Nikkei stock market index circa December 1989, investing in a fund that has done well for a number of years, such as the S&P 500, makes me anxious. Given the likelihood of a recession, I'd potentially see the value of my investment fall considerably within a very short time, and I'd then have to wait years to even break even. I have a lump sum that I intend to invest in an ISA with Vanguard, maxing out my ISA for the tax year. Because it's a lump sum, I can't take advantage of dollar cost averaging like I could if I was investing an amount periodically. This leaves me wondering what fund I should invest in, and I'll likely put the cash into the Sterling Short-Term Money Market Fund for the time being. At some point, I'll have to take the risk and choose a fund such as S&P 500, but the economy right now, for me, seems too volatile.

[@MattMcQueen1]

@@LegendZzFTW I’ll be maxing out the ISA allowance in one go - £20,000 - so it won’t be possible to add further money until next April.

[@Claydelas]

@@MattMcQueen1 I personally put 20k in as a lump sum into CSH2 in April and every week I sell a bit of it to buy some VWRL/VUSA. Worked out well so far - losses from the index funds have been offset by the money market fund and I'm net positive even though stuff has been pretty volatile recently.

[@nigelprice3929]

There are always good suggestions of vwrl but on the vanguard platform, there is an accumulating fund (so set and forget) developed world excl the UK. It's performance over 5 and 10 years is so much better than vwrl and it's cheaper with 0.14% fees. So easy and cheap to add a UK fund if you want to fill the gap. The vanguard emerging markets etf lost money over the last 5 years and only averages 2% growth over 10. Diversified funds always seen as a good idea but will all emerg markets do well at once ? Seems unlikely.

[@hlits6310]

Sounds like you are trying to time the market. Terrible idea in general.😢

[@MattMcQueen1]

@@hlits6310 Unless you have little choice. Being fully invested in any stock market isn't a viable short term solution, and I'll be retiring in less than 10 years. If you want to risk losing half your pension fund a few years from retirement, crack on.

[@Sarfaraz30]

I’ve done 65% in s and p 500 and 35% in global

[@derekbland5253]

So do you lose on the currency exchange on the S&P? Do you not also have to pay the 15% tax? If this is the case,.you need to make that much back before breaking even.

[@TobyNewbatt]

Currency exchange is always taking place it’s not fixed so sometimes it works out well and other times badly. Also withholding tax is on dividends not total return. 15% of a 2% yield is 0.3% so that is your impact. You can’t escape the dollar even if you only invest in UK companies as everyone needs oil, gas, good etc all trades in USD

[@malone77]

I have a question, more specifically about vusa and its tracking of the s and p 500. Appreciated if anyone could give me a steer and some info on why this happens. S and p 500 ytd is up around 8% and vusa itself about 2.6%. What are the reasons for the gulf in the performance? If its a tracker why is the gap that big between the two? I can imagine exchange rates may be a factor, but the gap seems large. Cheers

[@Munkfish-TV]

I think I'm right in saying this is a currency effect which is down to VUSA being a UCITS European fund which is transacted in (in our case) GBP but the underlying fund holdings are priced in USD. If you look at VOO, which is another S&P tracker available in the USA and only priced in dollars, then this follows the index very closely. This effect also accounts for last year where the S&P500 lost over 20%, VUSA only dropped by ~10%.

[@malone77]

​@@Munkfish-TV cheers mate appreciate you taking the time to answer.

[@myraalper7611]

Wow, great video! It's amazing to see how cryptocurrency can provide a reliable passive income stream for investors. I think it's really important for us to keep our safety in mind and focus on our primary goals when investing in cryptocurrency. I found Aaron Addison's trading strategy to be really helpful and have personally seen great results, accumulating 32btc in just three weeks! he truly is the best cryptocurrency signal provider out there and her strategy is a game-changer.

[@myraalper7611]

TELE/GRAM☑

[@myraalper7611]

@AARONT44 NO"""""""SPACE THAT IS HIS USER NAME☑

[@braedonlanna2751]

this information is really insightful, i might consider trading than just hodling 😩

[@donlinch9975]

I didn't know Aaron still provides signals, this man is a Legend. Big ups to him.

[@kattieshouse6554]

LOL. last 2017 was a year of making profits, the market is totally manipulated right now, but keep trading guys. we hope for 50k this year.

[@Dirt99]

VUSA is my main holding but want to go global. What's the pros and cons of selling vusa and buying global or just keeping vusa and starting a new global position?

[@TobyNewbatt]

So it will all just be about weights...if you have VUSA and some Global, all you do is weight slightly more toward US. Nothing good or bad about that we don't know the future, just worth being aware of. Also no harm, in my view of selling VUSA and buying global but this is all just a personal decision :)

[@Dirt99]

Thanks Toby. You're producing some great content!

[@paslaptizzz]

What if I go for both? Shares & stock ISa vanguard.

[@TobyNewbatt]

It’s not a problem but you just end up overweighting the US that’s all. Could do well or it might not we won’t know until it happens 👍

[@llamudos9809]

Split!

[@kippsguitar6539]

I think you missed a very important point in your excellent video, look at the correlation between usa outperforming and times of a strong USD index snd vice versa, fhe dollar has been hugely overvalued lately and the overwhelming odfs are it will drop wjen this rate cycle is over (probably soon), in this environment the massive Asian markets (and growing) would have a serious tailwind, especially ones with USD denominated debt, xheck the correlation between usd weakness and EM economic strength, maybe an idea for a future video! Giod stuff

[@TobyNewbatt]

Thanks I think this is a great future video and topic mate. Appreciate you starting the conversation

[@kippsguitar6539]

​@@TobyNewbatt best wishes from south east Asia where I see a massive change in tourists and investors nationalities, the rise of Indian tourists and investors here is possibly a bellwether and the rising middle class in Vietnam is incredible to see

[@kippsguitar6539]

​@@TobyNewbatt I did a quick check, it certainly does correlate with USD index strength (strong us market) and USD index weakness (higher world index stocks), I'm a strong believer in coming USD weakness (for what it's worth) and stalking Asia, certain is nothing but my watchlist gets formed on these factors and my powder is dry

[@rennaway8728]

38% of the S&P500 earnings come from outside the US too.

[@southernc4919]

With the end of globalization I stay invested in the US

[@TobyNewbatt]

I’d not bet on the end of globalisation anytime soon, the US needs international revenue to work well. You can’t buy an iPhone without overseas manufacturing 🥲

[@NS-pt9rr]

Toby, what are your thoughts on buying into S&P 500, now as opposed to wauting due yo the current banking crisis in USA, surely it would be wiser to wait a while to start to see a bit of claity in the market ? 2 banks rip, another 2 on the chopping line, seems dangerous times to me, imo obviously

[@carlbaker5880]

When cheaper better to buy surely

[@kippsguitar6539]

Nobody knows

[@kippsguitar6539]

​@@carlbaker5880 how do you know it will be cheaper anytime soon? Lend me your crystal ball and let's get rich, markets are unpredictable

[@TobyNewbatt]

As per the gents below, I'd say if you ever think the market is looking bad this would surely be a better time to buy when sentiment is poor. Also we just don't know what will happen with the rest of the banks. At the end of the day, local small banks might fail but all that does is strengthen the larger ones. Banking isn't going anywhere, the Fed and the Government cannot let that happen.

[@gillian32]

VEU and VOO are the way to go. 😁

[@TobyNewbatt]

nice selection if you're US based :)

[@phesho]

What's your view on ETFs that track S&P, but leveraged?

[@TobyNewbatt]

At your own risk I guess. Pros and cons right? Also the leverage might not work perfectly as they are not designed to be held long term so just be careful

[@ferkos7502]

@@TobyNewbatt why not? Also, how low can they fall in a bear market?

[@TobyNewbatt]

@@ferkos7502 you need to check how they are leveraged in the fact sheet of the fund as these leveraged funds are specifically designed for short term traders and not long term investors. Often this means that you won’t get the full upside and you will suffer massively if they dip. Also they can’t be held in tax free accounts like ISAs correct me if I’m wrong 👍

[@phesho]

@@TobyNewbatt Thank you for the info. They can be held in an ISA, that's what I currently hold in my AJ Bell portfolio...among others. It's all good now as the market rises, but yeah, don't want to even think about the losses when bears take power again. And will check the fact sheet just to see what to expect.

[@vinay4886]

The fact that the P/E of the SP500 is higher than that of VWRL suggests that there is a ‘self-fulfilling prophecy’ effect- ie a lot of the market cap of the 500 is due to investors pouring their money in it in preference to nonUS stocks…

[@TobyNewbatt]

Partly this might be true Vinay yes! I think money attracts money and there is always a lot of attention on the US - now the big question you have to ask as an investor is, is that investment warranted? Also - if you're super long term with your time horizons just keep investing and ignore it.

[@kippsguitar6539]

It always trades at a higher P/E than other countries, higher liquidity and lower perceived risk, nothing new

[@kippsguitar6539]

​@@TobyNewbatt liquidity

[@markmoore7797]

Hi Toby someone commented earlier about buying both s&p 500 and ftse world index and you said there wasnt any point, yet in your video at 13.27 you said. Why not just buy both. Am i missing something. I am looking to buy both and getting opinions by watching all you guys on youtube, but your statement has left me a bit confused, great content as always though

[@TobyNewbatt]

By both I mean the world :) - the world has all of the S&P 500 inside of it and if you do buy both all you end up doing is overweighting US stocks.

[@markmoore7797]

Thanks for clearing that up, and the quick reply

[@MrWhoAmI57]

SSAC is a hidden gem global index. The same as VWRP but cheaper

[@TobyNewbatt]

Nice suggestion yes! I have mentioned it in videos before. A good option if you want to follow MSCI's index vs FTSE's

[@NatalieLane-mb3ks]

@@TobyNewbatt @MrWhoAmI57, what's the expense ratio for SSAC?

[@TobyNewbatt]

@@NatalieLane-mb3ks 0.2%

[@jackreeves4884]

I've signed up to trading 212 what is the name of the global index on there ?-thanks

[@TobyNewbatt]

VWRP is one option but there are others. I forget which video I did but I have a few on that list! Might be one called best global index funds

[@jackreeves4884]

@@TobyNewbatt thanks for the reply toby really appreciate it . If you don't mind me asking is most of your portfolio invested in index funds also ?and do you dollar color average when investing ? I love your content it's really opened my mind and gave me a lot of confidence when it comes to my future now . +10 years from now of regular investing it will all be worth it :) thanks again

[@johndoh539]

I have gone even further. I have the vanguard global index which has over 7000 companies and includes smaller cap and emerging markets indexes.

[@kippsguitar6539]

Good move

[@fredatlas4396]

@johndoh539 That's a bogleheads UK recommend strategy, pure passive strategy just buy the whole haystack, don't try to find the needle or market time. Buy and hold, stay the course for the long term. This is some of the Vanguard founder John Bogle's investing advice

[@markspiers4992]

World for me. I thought i knew better than the world and put 10% of my investments in Emerging Markets and 10% in 100% Lifestrategy. Emerging markets are 20% down. Did same with my LISA, i know best so i will put money in SMT and half in world tracker. World tracker is up but all gains have been wiped out by SMT poor performance. I only put my regular investments in World fund now. Tim Hale Smarter Investor, read it.

[@EZ1111]

Just a question everyone is welcomed to chime in with their opinion. When you're doing these investments should you be putting at least minimum £300? I currently put £100 a month each in S&P 500 UCITS ETF (VUSA), U.S. Equity Index Fund - Accumulation and Vanguard FTSE Global All Cap Index . But watching this video I feel it's too little in my opinion thoughts?

[@carlbaker5880]

Do what u can afford obviously

[@kippsguitar6539]

Impossible to say and only you know your financial situation and it all depends on your % of your Dosh available

[@EZ1111]

@@kippsguitar6539 oh I can increase my amount but idk if it’s enough lol

[@amyk9813]

I can only afford £50 a month but was kindly told that something is better than nothing!

[@RayRay79]

Do what you can afford and it’s very difficult to time the market, people thought this year with the heads of rising rates and a looming global recession 23 will tank lower than 22… it hasn’t played out that way!

[@ssssaa2]

S&P 400 and S&P 600 > S&P 500 > World. Although TBF S&P 500 is overvalued relative to the global market right now on account of the higher P/E and in addition the strong US dollar, so IDK about the medium term between those 2. The S&P 400 and S&P 600 though smash the other 2 options pretty bad at present with even higher long run earnings growth than the S&P 500, even in the last 5 years, and comparable or even lower P/E to the global index (and much lower than the S&P 500, which is not typical historically). Small and Mid cap are diamonds in the rough, shame nobody much talks about them. This is a golden opportunity right now for investing.