Is there any downside to investing in VWRP from the UK (since it is ‘USD’) rather than a ‘GBP’ ETF (e.g., in terms of ‘conversion costs)?

[obinnanicholas]

I think I covered it in the title - are there added costs to investing in a USD ETF whilst in the UK compared to a GBP one?

I’ve been a long time lurker in this channel and seen VWRP recommended a number of times, so I’m optimistic that there is no difference.

I use HL S&S isa in case that has any bearing on the query.

Apologies for any naivety - I’m at an early stage with developing my financial literacy.

P.S. I have read all of the links associated with the wiki and couldn’t find the answer myself.

 

[jb21]

@obinnanicholas As always Monevator has an article for you. https://monevator.com/currency-risk-fund-denomination/

Fund domicile and base currency matters if you take dividends, i.e. VWRL, if the fund rolls up dividends, like VWRP, then not so much.

Where a fund's holdings are, and where the dividends the fund receives arise from, and whether those are taxed at source matters more.

 

[wael]

@jb21 Note that if it rolls up dividends then unless you’re holding exclusively in an ISA you still need to declare those on a self assessment as the dividends you would have received counts as income in the same way as actually receiving the dividends would. It can be a bit of a pain to figure out what these are.

I only mention this because every time accumulating funds are mentioned in this sub it seems to be news to at least one person!

 

[godsgirl9]

@obinnanicholas I'm interested in this as I think I would be in a similar position with the "HSBC FTSE All-World index fund".

I have just created a Dodl LISA (a little late to the party but getting in there before I turn 40 next week!) and funded it. Trying to decide which fund to invest in and have seen a number of people mentioning All-world index funds.

I am also just starting out with trying to understand the world of S&S investing and associate pitfalls / fees to be aware of

 

[godsgirl9]

@faithfullife Thanks for the clarification! I'll go off and read up more on the differences between ETF and Index Funds

 

[newchurch101]

@godsgirl9 The HSBC all world fund and Global All Cap are actually OEICs (open ended investment companies).

An index fund is one that follows an index - which all the funds mentioned do (the ETFs and the OEICs).

 

[godsgirl9]

@newchurch101 Thanks!