Vanguard FTSE All-World UCITS ETF

ONE way for investors to build the core of a diversified portfolio is to include a low-cost tracker fund that replicates the performance of a global stock market index. A good example is the Vanguard FTSE All-World UCITS ETF, which is a member of the Select 50. 

The fund’s benchmark is designed to measure the performance of large and mid-cap stocks located around the world. It includes approximately 3,900 holdings in nearly 50 countries across the developed and emerging markets and covers more than 95% of the global investable market capitalisation, which is an amazing level of diversification. 

In order to replicate the performance the ETF invests in a representative sample of the underlying companies and currently holds almost 3,700 stocks with total assets under management of $9.9bn. It is a large and liquid fund and the returns data suggests that it tracks the benchmark to within a few basis points each year. 

Despite the large number of holdings it is important to appreciate that the performance will be mainly driven by the US stock market, which makes up 59.1% of the assets. The next largest allocations are: Japan 6.3%, UK 4.1% and China 3.7%, with all the other countries coming in at 3% or below. 

Vanguard FTSE All-World UCITS ETF 5 year performance chart

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Overseas investments will be affected by movements in currency exchange rates. Investments in emerging markets can be more volatile than other more developed markets. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.