DIY investors are always on the outlook for low-cost ways to tap into the wealth creation potential of global equity markets. Widely respected for their broad diversification and minimal fees, the Vanguard FTSE Global All Cap Index Fund, HSBC FTSE All-World Index Fund, and Fidelity Index World Fund are also global index funds that have outperformed their Investment Association Global benchmark over one-, three- and five-year periods.
Whether you’ve been managing your own investments for years or are new to the idea, low-cost global index funds can be a solid foundation stone on which to build your portfolio wealth for years to come.
So, let’s take a closer look at these three popular options:
Vanguard FTSE Global All Cap Index Fund
This fund manages assets worth more than £7 billion and is gold star-rated by data provider Morningstar. It offers extensive global exposure by tracking the FTSE Global All Cap Index, which includes large-, mid-, and small-cap companies in both developed (US, Europe, UK, Japan) and emerging markets, such as China, India and Taiwan.
Top stock holdings currently include well-known tech names like Nvidia (NVDA), Apple (AAPL) and Microsoft (MSFT), while Elon Musk’s Tesla (TSLA) and Warren Buffett-led Berkshire Hathaway (BRK.B) also feature.
Apple (AAPL)
The ongoing annual charges run at 0.23%, compared to a segment average that ranges between 0.05 % and 0.25%, according to sources such as the FCA (Financial Conduct Authority), Morningstar and Funds-Europe.
The fund pays a yearly dividend that currently yields 1.34%.
Vanguard FTSE Global All Cap Index performance
| 1 year | 3 years | 5 years | |
| Vanguard fund | 10.6% | 54.3% | 67.5% |
| IA Global benchmark | 8.4% | 41.5% | 48.3% |
Source: Trustnet
HSBC FTSE All-World Index Fund
Similar to Vanguard’s offering, this fund tracks the FTSE All-World Index and includes exposure to emerging markets. It is often highlighted for its competitive ongoing charges of 0.13%.
Also like the Vanguard fund, its top holdings are crammed with some of the most recognisable stock names in the world, with a marginally higher exposure to technology sectors, but slightly lower cover around financials and healthcare.
The dividend yield stands at 1.41%.
HSBC FTSE All World Index performance
| 1 year | 3 years | 5 years | |
| HSBC fund | 11.4% | 57.0% | 73.5% |
| IA Global benchmark | 8.4% | 41.5% | 48.3% |
Source: Trustnet
Fidelity Index World Fund
Tracking the MSCI World Index, this fund provides exposure to developed world large and mid-cap stocks, which explains the moderately larger exposure to US stocks. One key distinction is that it typically excludes exposure to more volatile emerging markets, a factor for investors to consider.
Despite this, the Fidelity fund’s top 10 holdings are not far off a copy and paste job of the other two, with US pharma and weight-loss treatment giant Eli Lilly (LLY) a notable exception.
Eli Lilly (LLY)
The Fidelity fund’s OCF is the lowest of the three here, at 0.12%, but so too is its dividend yield, at 1.32%, although the latter is marginal.
Fidelity Index World performance
| 1 year | 3 years | 5 years | |
| Fidelity fund | 10.2% | 60.6% | 81.0% |
| IA Global benchmark | 8.4% | 41.5% | 48.3% |
Source: Trustnet
These passive index funds are generally favoured for their low OCFs, which help minimise the impact of fees on long-term returns. You can typically invest in these and other similar low-cost funds through any decent investment platform.
Disclaimer: This content is for information only and is not investment advice. Always do your own research before investing. Click here to see full disclaimer.
