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Hey everyone! I'm back with some exciting news from my investment journey. After years of sticking with a single ETF, the Vanguard FTSE All-World, I've made a significant shift. Today, I'm thrilled to share why I decided to start buying the Accumulating Invesco FTSE All-World ETF. So, let's dive right into the details, and I'll walk you through my five reasons for this switch.
Why I Started Buying the Invesco FTSE All-World (5 Reasons)
1 - 32% Lower TER
First off, the total expense ratio (TER) for the Invesco ETF is 0.15% per year, which is 32% lower than the 0.22% TER of the Vanguard FTSE All-World. While the difference might seem small in absolute terms, every little bit helps in reducing costs over the long term. Remember, even small percentage points can make a significant impact on your investment growth over decades.
2 - Great Tracking Difference in its First Year
The Invesco FTSE All-World has shown a promising start by outperforming its benchmark index more significantly than Vanguard did in its first year. With a better tracking difference, it suggests that Invesco might continue to closely mirror or even exceed the performance of the FTSE All-World index, which is crucial for ensuring that we're actually getting the returns we're aiming for.
3 - Covers the Same Broad-Based Index as Vanguard’s ETF
It's essential for me to maintain consistency in my investment strategy, and the Invesco ETF tracks the same FTSE All-World index. This means I'm still investing globally, covering both developed and emerging markets, and even getting a sprinkle of small-cap stocks. This alignment ensures that my investment approach remains steady while potentially benefiting from lower fees and better performance.
4 - Large Enough Fund Size and Low Spreads
The fund size of the Invesco ETF has grown significantly, ensuring it's safe from the risks of liquidation, and the trading spreads have become increasingly competitive. When buying and selling ETFs, lower spreads mean less money lost to market inefficiencies, which can add up to substantial savings over time.
5 - Supporting Lower Fees in the ETF Market
By choosing Invesco, I'm also voting with my wallet to support fund providers who push for lower fees in the European ETF market. It's important to back initiatives that drive down investing costs for everyone, making it more accessible and sustainable for individual investors to build wealth.
ETF Investing Strategy Update
Switching to Invesco’s ETF doesn't mean a complete overhaul of my strategy. I still highly regard Vanguard’s offerings and recommend them for their proven track record. However, for my future investments, I'll be channeling my monthly contributions into the Invesco FTSE All-World.
I've already updated my automatic investments on Interactive Brokers and Trade Republic to reflect this change, ensuring I continue to capture global market performance efficiently and cost-effectively.
Final Thoughts
Shifting to a new ETF is a big decision and one that shouldn't be taken lightly. I believe that Invesco’s lower fees and promising early performance merit the switch, but it's crucial to consider how such changes align with your overall investment strategy and goals.
What do you think about this move? Are you considering any changes to your ETF investments? Let me know in the comments below, and don't forget to like and subscribe if you found this post helpful. Your support helps me keep bringing you insights into smart, effective investing. Happy investing!