VHVE/VFEA with low size risk to close in the future?

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gickyf3e
Posts: 4
Joined: Fri Sep 25, 2020 8:12 am

VHVE/VFEA with low size risk to close in the future?

Post by gickyf3e »

Hi Everyone,
I am new to the investing world and I started studying and making my research. I would like to invest in the Vanguard VHVE/VFEA etfs, buy and hold for a long period (20-25years). My worry now is that currently VHVE and VFEA have both sizes below 50m$ (32 and 35m$ respectively), which are quite small. I know they are both quite young, lunched only one year ago, but: is this size a sign that the two etfs are not growing?
I saw Vanguard recently closed his Euro STOXX 50 UCITS ETF because it didn't reach 100m$ within 3y.
What do you guys think about it? Should I prefer SWRD/EIMI? Thanks
mohd
Posts: 95
Joined: Wed Jul 22, 2020 2:10 am
Location: Bahrain

Re: VHVE/VFEA with low size risk to close in the future?

Post by mohd »

Hi

I am new to investing too, but here is my opinion

According to Vanguard website the total assets for both VHVE and VFEA are $731.1 M and $2.1B respectively.

https://americas.vanguard.com/instituti ... ##overview
https://americas.vanguard.com/instituti ... ##overview

For new funds that are started a year ago these numbers are not really bad. The worst case scenario is, if they closed these funds you can transfer to other similar funds (it might be annoying for you to re-buy).

For VFEA (TER 0.22%), you might want to consider an alternative which is EMIM with lower TER (0.18%) and has more AUM.
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Schlabba
Posts: 831
Joined: Sat May 11, 2019 9:14 am

Re: VHVE/VFEA with low size risk to close in the future?

Post by Schlabba »

gickyf3e wrote: Fri Sep 25, 2020 8:40 am Hi Everyone,
I am new to the investing world and I started studying and making my research. I would like to invest in the Vanguard VHVE/VFEA etfs, buy and hold for a long period (20-25years). My worry now is that currently VHVE and VFEA have both sizes below 50m$ (32 and 35m$ respectively), which are quite small. I know they are both quite young, lunched only one year ago, but: is this size a sign that the two etfs are not growing?
I saw Vanguard recently closed his Euro STOXX 50 UCITS ETF because it didn't reach 100m$ within 3y.
What do you guys think about it? Should I prefer SWRD/EIMI? Thanks
If a fund closes they will pay you out your share. So in that sense it is not a risk unless you decide to never look at your brokerage account again.
Topic Author
gickyf3e
Posts: 4
Joined: Fri Sep 25, 2020 8:12 am

Re: VHVE/VFEA with low size risk to close in the future?

Post by gickyf3e »

mohd wrote: Fri Sep 25, 2020 10:28 am Hi

I am new to investing too, but here is my opinion

According to Vanguard website the total assets for both VHVE and VFEA are $731.1 M and $2.1B respectively.

https://americas.vanguard.com/instituti ... ##overview
https://americas.vanguard.com/instituti ... ##overview

For new funds that are started a year ago these numbers are not really bad. The worst case scenario is, if they closed these funds you can transfer to other similar funds (it might be annoying for you to re-buy).

For VFEA (TER 0.22%), you might want to consider an alternative which is EMIM with lower TER (0.18%) and has more AUM.
Hi. Thank you for your answer.

As far as I know, VHVE and EMIM (or EIMI) should not be combined because of differences in the definition of "emerging markets".
mohd
Posts: 95
Joined: Wed Jul 22, 2020 2:10 am
Location: Bahrain

Re: VHVE/VFEA with low size risk to close in the future?

Post by mohd »

gickyf3e wrote: Fri Sep 25, 2020 10:45 am
mohd wrote: Fri Sep 25, 2020 10:28 am Hi

I am new to investing too, but here is my opinion

According to Vanguard website the total assets for both VHVE and VFEA are $731.1 M and $2.1B respectively.

https://americas.vanguard.com/instituti ... ##overview
https://americas.vanguard.com/instituti ... ##overview

For new funds that are started a year ago these numbers are not really bad. The worst case scenario is, if they closed these funds you can transfer to other similar funds (it might be annoying for you to re-buy).

For VFEA (TER 0.22%), you might want to consider an alternative which is EMIM with lower TER (0.18%) and has more AUM.
Hi. Thank you for your answer.

As far as I know, VHVE and EMIM (or EIMI) should not be combined because of differences in the definition of "emerging markets".
There are no overlaps and if it happens it might be very small. I doubt this will make a big difference.

If that's your concern, you have these combinations:

- IWDA & EIMI
- SWRD & EIMI
- VHVE & VFEA
- Or to make it more simple, VWRA

You can lower your TER and not bother about AUM (as stated above, worst case scenario is to transfer to other funds)

I personally invest in VWRA (TER 0.22%) even though there are cheaper TER. I wanted to make it simple and handle one fund only & I like that I've both emerging and developed in one fund and rebalanced automatically. It's up to your preferences.
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Schlabba
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Re: VHVE/VFEA with low size risk to close in the future?

Post by Schlabba »

mohd wrote: Fri Sep 25, 2020 11:18 am
gickyf3e wrote: Fri Sep 25, 2020 10:45 am
mohd wrote: Fri Sep 25, 2020 10:28 am Hi

I am new to investing too, but here is my opinion

According to Vanguard website the total assets for both VHVE and VFEA are $731.1 M and $2.1B respectively.

https://americas.vanguard.com/instituti ... ##overview
https://americas.vanguard.com/instituti ... ##overview

For new funds that are started a year ago these numbers are not really bad. The worst case scenario is, if they closed these funds you can transfer to other similar funds (it might be annoying for you to re-buy).

For VFEA (TER 0.22%), you might want to consider an alternative which is EMIM with lower TER (0.18%) and has more AUM.
Hi. Thank you for your answer.

As far as I know, VHVE and EMIM (or EIMI) should not be combined because of differences in the definition of "emerging markets".
There are no overlaps and if it happens it might be very small. I doubt this will make a big difference.

If that's your concern, you have these combinations:

- IWDA & EIMI
- SWRD & EIMI
- VHVE & VFEA
- Or to make it more simple, VWRA

You can lower your TER and not bother about AUM (as stated above, worst case scenario is to transfer to other funds)

I personally invest in VWRA (TER 0.22%) even though there are cheaper TER. I wanted to make it simple and handle one fund only & I like that I've both emerging and developed in one fund and rebalanced automatically. It's up to your preferences.
South korea is EM according to MSCI and developed according to FTSE.

So holding developed FTSE and MSCI EM would be holding South Korea twice.
mohd
Posts: 95
Joined: Wed Jul 22, 2020 2:10 am
Location: Bahrain

Re: VHVE/VFEA with low size risk to close in the future?

Post by mohd »

Schlabba wrote: Fri Sep 25, 2020 11:29 am
mohd wrote: Fri Sep 25, 2020 11:18 am
gickyf3e wrote: Fri Sep 25, 2020 10:45 am
mohd wrote: Fri Sep 25, 2020 10:28 am Hi

I am new to investing too, but here is my opinion

According to Vanguard website the total assets for both VHVE and VFEA are $731.1 M and $2.1B respectively.

https://americas.vanguard.com/instituti ... ##overview
https://americas.vanguard.com/instituti ... ##overview

For new funds that are started a year ago these numbers are not really bad. The worst case scenario is, if they closed these funds you can transfer to other similar funds (it might be annoying for you to re-buy).

For VFEA (TER 0.22%), you might want to consider an alternative which is EMIM with lower TER (0.18%) and has more AUM.
Hi. Thank you for your answer.

As far as I know, VHVE and EMIM (or EIMI) should not be combined because of differences in the definition of "emerging markets".
There are no overlaps and if it happens it might be very small. I doubt this will make a big difference.

If that's your concern, you have these combinations:

- IWDA & EIMI
- SWRD & EIMI
- VHVE & VFEA
- Or to make it more simple, VWRA

You can lower your TER and not bother about AUM (as stated above, worst case scenario is to transfer to other funds)

I personally invest in VWRA (TER 0.22%) even though there are cheaper TER. I wanted to make it simple and handle one fund only & I like that I've both emerging and developed in one fund and rebalanced automatically. It's up to your preferences.
South korea is EM according to MSCI and developed according to FTSE.

So holding developed FTSE and MSCI EM would be holding South Korea twice.
Yea that's right, it's 12.63% in EIMI and 1.6% in VHVE.
vinczo
Posts: 2
Joined: Thu Apr 08, 2021 9:46 am

Re: VHVE/VFEA with low size risk to close in the future?

Post by vinczo »

Any further views on this topic?

I am also concerned about this as canceling the ETF and getting paid would trigger taxes in my country which I am not interested in paying as I want to stay long term invested.
nasaliscarvatus
Posts: 8
Joined: Fri Mar 08, 2019 7:38 pm

Re: VHVE/VFEA with low size risk to close in the future?

Post by nasaliscarvatus »

VHVE was at $88 million at the end of February 2021, roughly double the size half a year ago. It will most certainly hit above $100 million by summer- with my little contribution :) :moneybag :sharebeer
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alpine_boglehead
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Re: VHVE/VFEA with low size risk to close in the future?

Post by alpine_boglehead »

As far as I know, the accumulating VHVE and VFEA are share classes of the same funds as their distributing siblings VDEV and VDEM with 866 and 2240 million AUM. Thus, the overall funds already have sizeable AUM and likely won't be closed.

The accumulating versions were launched later (thus less AUM), but seem have tax advantages in several European jurisdictions, therefore I'd expect them to pick up AUM quickly. You can check the AUM trend of ETFs on this site.
vinczo
Posts: 2
Joined: Thu Apr 08, 2021 9:46 am

Re: VHVE/VFEA with low size risk to close in the future?

Post by vinczo »

alpine_boglehead wrote: Sun Apr 11, 2021 1:50 am As far as I know, the accumulating VHVE and VFEA are share classes of the same funds as their distributing siblings VDEV and VDEM with 866 and 2240 million AUM. Thus, the overall funds already have sizeable AUM and likely won't be closed.

The accumulating versions were launched later (thus less AUM), but seem have tax advantages in several European jurisdictions, therefore I'd expect them to pick up AUM quickly. You can check the AUM trend of ETFs on this site.
Thanks, this is super helpful and relevant comment which gives me and probably others further confidence to use VHVE/VFEA as a very cost effective (and marginally better than similar offering from BlackRock) exposure to global equity markets.
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alpine_boglehead
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Re: VHVE/VFEA with low size risk to close in the future?

Post by alpine_boglehead »

vinczo wrote: Thu Apr 15, 2021 11:26 am
alpine_boglehead wrote: Sun Apr 11, 2021 1:50 am As far as I know, the accumulating VHVE and VFEA are share classes of the same funds as their distributing siblings VDEV and VDEM with 866 and 2240 million AUM. Thus, the overall funds already have sizeable AUM and likely won't be closed.

The accumulating versions were launched later (thus less AUM), but seem have tax advantages in several European jurisdictions, therefore I'd expect them to pick up AUM quickly. You can check the AUM trend of ETFs on this site.
Thanks, this is super helpful and relevant comment which gives me and probably others further confidence to use VHVE/VFEA as a very cost effective (and marginally better than similar offering from BlackRock) exposure to global equity markets.
I just went to check to make sure things are as I claimed ... on the morningstar profile of VHVE, it says funds size $1167m, share class size $120m so that seems to be correct.
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