Well I had some accrued divs and decided to give it a go. VEVE (Worldwide developed, priced and divs in GBP) annual fees 0.12%. Nothing wrong, all seems good, but during the research, well a couple of things surprised me.
I know we’ve had this conversation before about ITs vs ETFs; ETFs always have the lower quoted KIID relative to an ‘equivalent’ IT and I always argued it was because KIIDs was based on all sorts of inappropriate assumptions that always showed the more ‘modern’ Fund Management business in a more favourable light than ITs. The Association of Investment Companies whinged bitterly that the rules were arbitrary at times and made ITs include all sorts of transaction costs that, in reality, often didn’t exits… but hey, the huge political muscle of the giant ETF and OEIC providers (not suggesting there were any political contributions at any stage!) won the day and the politicians when with what was suggested - bright side is that at least the ETFs and OEICs (the vast majority of the market by size) have to play by the same rules even if (maybe?) they represent not quite such a level playing field for ITs - smaller part of the market (tell that to Berkshire Hathaway - an Investment Trust is what they are!)… I drift from my point.
VEVE is what I lifted. ATST is the IT I’ve had for years. Both global developed world investors, VEVE KIID 0.12%, ATST 0.90%, and when you look at the largest shareholdings, they have pretty fair match so instinct would suggest VEVE would outperform ATST by approx 0.75% pa… but it doesn’t. Chart below (I hope, not too practiced at this). Over 5 years ATST outperforms but I’d admit that 3 to 5 years ago would coincide with Elliot Investors having a dig at ATST and forcing the discount down from mid-teens to 5%ish which would explain a 10% out performance.
Don’t know whether the charts are all dividends reinvested but there’s not a lot of difference in yield, certainly less that the 15% dividends received that ATST are allowed keep rather than forced to distribute.
Like I say, in terms of assets they hold, not that dissimilar. KIIDs says 12bp for VEVE vs 90bp for ATST (there are there abouts). Doesn’t make sense unless KIIDs is garbage when it comes to comparing ETFs and OEICs to ITs or that ATST don’t buy everything in the index… a bit like me vs FTSE100; I can consistently outperform it because 40 to 50 of the constituents I wouldn’t touch and half the rest I’m indifferent at best. Avoid the dogs, underweight heavyweights you’re not convinced and top up with the stuff you like.
Maybe a bit of both but KIIDs is garbage unless comparing like with like IMO
Anyway, just started a spreadsheet with both, price I paid for the VEVE vs the ATST offer price at the time. Spreadsheet will assume £100k in both and I’ll update by ‘reinvesting’ all dividends received. With or without costs? Dealing cost is fixed but no stamp duty on VEVE. Open to suggestion or maybe just do it both to see how much difference it makes? I’ll try to note the discounts/premiums to see if that explains anything but acid test is always, money in, money out. We shall see… although it may take a while for any difference to be significant.