One evening I finally got round to taking a look at alternatives to VVAL, Vanguard's soon-to-be defunct value factor fund.
I've written before in this newsletter that it's a shame just when value investing is staging something of a comeback, Vanguard is discontinuing VVAL along with three other factor funds it runs in the UK, on 23 February 2021.
Within Vanguard there are a couple of options.
The Vanguard UK Equity Income Index Fund Acc (an OEIC) or VHYL (an ETF).
Both favouring companies that pay dividends, one UK, one investing in companies worldwide.
I've grudgingly gone for VHYL, but it's not an exciting pick, and hardly, in terms of the companies that make up its constituent parts, the future.
I imagine, with, in the grand scheme of things, not a lot of funds under management, the cost of maintaining the factor funds, as opposed to its usual MO, index funds, made keeping VVAL et al going prohibitive for Vanguard.
Demand partially satiated, I decided I wanted more.
Scanning lists of value funds, doing the analysis, comparing broker fee charges, OCFs, fund holdings, etc.
Finally I hit paydirt. I'd launch an experiment. Over the next 10 years, which would win, VHYL or my top value pick (unhindered by the confines of Vanguard's Vanguard-funds-only platform. usually a blessing).
I can't pretend I'm not annoyed with Vanguard. I love that part of my portfolio, the value tilt, having formed an emotional attachment to it.
I kid myself it's based on rational analysis (and it is, it really is), but certainly the last ten years don't bear the effectiveness of a value tilt out.
When it comes down to it though, I can't discount the notion that it's because I love the underdog, the contrarian approach. Backing the 100/1 horse in the National.
And that fund?
Cape Wrath, where I will hopefully (one can but hope) be in mid-April on our annual Easter break to Durness.
Yes, after all the analysis was done and the infinitesimal part of my portfolio was earmarked for the stubborn maintenance of a true value tilt, I chose the fund cos I liked the name.
I liked the narrative it represented.
And because it's the only fund I know of that Thomas SchafferKnacker reads out on the Shipping Forecast.
And if that's not a good reason to invest in something, I don't know what is.
Last, for the preamble, how's home-schooling going in your house?
Having feasted on the goings-on at Handforth Parish Council last weekend until the tears rolled down my face, I am periodically fighting the urge to say things like:
"Read the instructions. Read them and understand them."
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