Posted inHead To Head, News, Research

HEAD-TO-HEAD: HSBC vs Vanguard

FSA compares two UK passive funds: the HSBC FTSE 100 Index Fund and the Vanguard FTSE UK All Share Index Unit Trust Accumulation Fund.
by Francis Nikolai Acosta
Performance

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The three-year performance of the HSBC and Vanguard funds versus their benchmark indices, according to FE Analytics.

Both funds have done a good job in tracking their respective benchmarks, according to Bioy. The HSBC fund has a tracking error of less than 0.10%, while the Vanguard fund’s tracking error is 0.04%.

In terms of cumulative performance, the Vanguard fund outperformed the HSBC fund over a three-year period.

The Vanguard fund also outperformed over the longer-term: It has returned 106.12% over a 10-year period versus HSBC’s 90.58%, according to FE data.

“When the UK economy is doing well, mid-caps will do better than large-caps, which gives a nice tailwind to the FTSE All Share Index,” Bioy explained.

However, when there is strong volatility in the UK market, large-cap companies tend to perform better than mid- and small-cap stocks, she said.

Indeed, although the All Share Index outperformed over the long-term, it underperformed the FTSE 100 Index in 2016 after the Brexit vote results.

Discreet annual performance

Fund / benchmark

2017

 2016 2015

2014
HSBC FTSE 100

11.7

 18 -1.24

0.21
     Index : FTSE 100

11.95

 19.07 -1.32

0.74
Vanguard FTSE UK All Share

13

 16.58 0.89

1.05
     Index: FTSE All Share

13.1

 16.75 0.98

1.18

Source: FE Analytics

In terms of volatility, the HSBC fund’s volatility on a three-year annualised basis is 9.76, while Vanguard’s is 9.36, according to FE data.

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