The FSA Spy market buzz – 1 November 2024
Battleshares’ old versus new, Goldman Sachs’ Cassandra warning, Hong Kong property’s negative equity woes, Ninety One’s trillion-dollar question, Contrarian alert from CB, Lists and much more.
HEAD-TO-HEAD: iShares vs Vanguard
FSA compares two Japan index products from the industry’s two giants: the iShares Japan Equity Index Fund and the Vanguard Japan Stock Index Fund.
While both products are managed efficiently with highly automated technology, Lamont has a preference for the iShares fund because of its low-cost structure, a diversified approach, and the technology advantage.
In terms of fees, the Vanguard fund is 0.05% more expensive than the iShares fund. Investors should take into account the differences in the exposure and level of diversification the funds offer.
The iShares fund manages to mirror the market’s performance in a more representative way by holding close to 500 companies, compared to 320 held by the Vanguard fund.
“Typically, the more stocks a passive fund tracks, the higher the fees.” However, the iShares team has been able to generate a broader exposure with a lower cost to investors, compared to the Vanguard fund.
In addition, there is an almost identical product in the market to the Vanguard fund, which is far cheaper.
Between the two index funds, Lamont has the stronger conviction for the iShares tracker.
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