I am sometimes asked whether Monevator is a stealth site run by Vanguard to promote its activities in the UK.

Chance would be a fine thing!

So far not one of the pennies collected by the Monevator Empire has sallied forth from Vanguard’s coffers, so far as I’m aware.

Indeed, it’s a bit of a sad reflection of the UK financial media that some people’s first thought is that if you’re writing about a product or investment, you must be being paid by that company to do so.

Now don’t get me wrong – I’d absolutely love the opportunity to run Vanguard advertising on this website.

But even in the absence of such a pleasant happenstance, we’ll continue to write about the best products and services for the likes of you and me – and right now that means heavy lashings of whatever is being served up by the private investor friendly Vanguard.

Cheap as chips

My co-blogger The Accumulator spent the weekend helping his extended family with its finances – whether by going through their accounts or offloading their junk at a car boot sale he didn’t say – and so he requested a week off posting duties.

I know! Slacker.

In his stead I’d like to draw your attention to four new ETFs that Vanguard has just brought to the UK market.

ETF name	Ticker	TER
Vanguard FTSE Developed Europe UCITS ETF	VEUR	0.15%
Vanguard FTSE Developed Asia Pacific ex Japan UCITS ETF	VAPX	0.22%
Vanguard FTSE Japan UCITS ETF	VJPN	0.19%
Vanguard FTSE All-World High Dividend Yield UCITS ETF	VHYL	0.29%

Note: TER figures from Vanguard.

These Vanguard ETFs are all physically-backed funds – as opposed to the synthetic funds that some commentators consider more risky.

You can find out more information (including a prospectus and factsheet for each fund) at Vanguard’s website.

Rampant Vanguard-ism

The launch of these new ETFs seems a tad opportunistic for Vanguard.

I’ve heard more investors talking about Japan this year than in the previous five years put together, and now along comes a very cheap ETF from Vanguard that enables you to get exposure.

The Developed Europe ETF, with its TER of 0.15%, is also a very competitive offering. It’s certainly cheaper than its closest iShares equivalents, and with 499 holdings according to the factsheet I’m pretty sure it’s more diversified, too. (It does have over one-third of its money in UK shares, so keep that in mind when figuring out your overall asset allocation if your idea of Europe is more like UKIP’s!)

But I think that the new High Dividend Yield ETF could be the most interesting of the bunch, at a time when yield-chasing is still so rampant.

Holding over 1,000 globally distributed stocks (albeit with one-third of the index in the US, reflecting the large size of that market, and another 13% in the UK, perhaps on account of our emphasis on yield) this new ETF could be a cheap one-shot way to create a diversified equity income stream.

The factsheet is touting a forecast dividend yield of 4%. Time will tell if that’s what anyone purchasing this ETF actually receives.

Indeed as this ETF is brand spanking new, you’ll probably want to look into the FTSE Index it’s based on to best understand what you’re buying.

Of course, whether you ought to pursue value-tilted indices such as higher yield versus vanilla market cap weighting with your investing is an open question.

Growth investing is about putting your money into companies you think will make greater profits in the future. It is usually considered the flip-side of value investing.

Most viable listed companies will grow profits over time, so a growth investor is looking for companies that are expanding their profits faster than rivals or the market.

Growth investors aim to make capital gains from a higher share price, as opposed to for example buying dividend paying shares for income.

The very best growth stocks can deliver returns of a hundredfold or more after decades of growth, although by definition only a tiny handful of the thousands of companies listed will ever reach blue chip status.

Most growth shares fizzle out long before they trouble the top of the index:

• Sometimes a growth company slows down to become just another staid performer (also known as going ‘ex-growth’). This outcome can still make you excellent returns if you got into the share early enough.

• Other would-be growth companies die trying.

• My personal bugbear is when growth companies are acquired when still young and with all their potential ahead of them. This happens quite often; if you can see the potential in a company, so can industry rivals.

Even when a growth share does go all the way from small cap growth stock to international giant, few investors stay aboard for the entire ride. Owning a successful growth share is a dizzying experience!

Growth investing is hard. Much more common than finding a Microsoft is buying a ‘jam tomorrow’ share, that promises much but never delivers.

This reached its zenith in the Dotcom boom, when companies were growing sales or market share but weren’t growing profits, or even making any money at all.

While all growth investors will inevitably put more emphasis on the business story and the potential for expansion than a value investor, sensible growth investors look at cashflow and return on capital employed to see how the company is multiplying their investment.

Finally, it’s worth noting that some investment greats like Warren Buffett and Peter Lynch argue it’s a mistake to think in terms of value or growth shares.

Buffett espouses the idea of ‘intrinsic value’ instead.

However as a convenient way of labelling an investing method that focusses on profit growth as opposed to value investing’s emphasis on under-rated assets or performance, the growth investing label is useful and here to stay.

Good reads from around the Web.

I have a soft spot for Hetty Green, and a bit of sympathy. There’s no doubt this super-investor of a century ago was a craven asset accumulator who put amassing a fortune above all else, but then so has been Warren Buffett for most of his life.

Yet whereas “Uncle” Warren is lovingly known as the Sage of Omaha, Hetty Green has gone down in history as “The Witch of Wall Street”.

Her black dress and hat didn’t help, but I think it was her ruthless and successful market raids in times of strife that got up people’s backs (or let’s face it: men’s backs).

Like Buffett, Green was greedy when others were fearful, amassing vast quantities of assets during downturns and then selling them at her leisure when the good times rolled.

This was back when cartels of wealthy speculators really did gang up to break each other and Green stared down more than her fair share.

She ended up insanely wealthy.

The only way is not up

I’ve been thinking about Hetty Green because for the first time since 2009 I’ve been a net withdrawer of money from the market this month.

Only a per cent or two here and there. Nevertheless it feels odd.

This year I’m not only doing it to defuse capital gains tax. I’m selecting the option to “transfer money back out to your nominated bank account”. In metaphorical Lord of the Rings terms, this is a dusty, cobwebbed path that has only been whispered about in myths and legends in my house.

I’m obviously not calling a top, nor claiming an ability to. As it happens I don’t share the doomy prognosis that this whole rally is built on phantasmagorical easy money. And for what it’s worth, I think the market is far more likely to be 100% higher than 25% down in five years time.

But there’s no denying these are “good times”. In contrast I remember ransacking my loft for semi-valuable junk that I could flog on eBay to keep buying even more shares during the darkest days of 2009.

I was lucky, but I might not have been rewarded so quickly for my boldness. The fact is I became massively overweight in equities, and I was very conscious of this when I welcomed my more level-headed co-blogger The Accumulator to the Monevator fold the following year.

My Colonel Kurtz style expedition to the limit of stock market exposure was not what I’d created this blog to be about. The Accumulator practices what he preaches.

Back to reality

That was then and this is now. Things turned out okay, and it’s just as important to be fearful when others are greedy as the more oft-cited opposite.

Having run with far higher equity exposure than is prudent for anyone who still hopes (/needs) to use a fair slug to buy a house, I’ve started dialling it back. I’ve been withdrawing cash, and also shifting some money into safer stocks and preference shares.1

Hopefully I’ll finally buy a house or flat soon (I really do want that big, cheap mortgage). But if I don’t buy then cash is an amazing asset over the short-term, even at a time of diabolically low rates, thanks to its great optionality.

Moody blues

As of Friday I’ve pretty much tripled my net worth since those 2009 lows (not entirely due my investments rising, but they did most of the heavy lifting) and if I’m honest I feel myself getting impatient if my portfolio doesn’t end the day or the week higher.

I’m taking for granted daily moves in my net worth that surpass my monthly earnings. A terrible sign!

This is a dangerous mood, and I’ve known it before — from before the crisis of course. Yet I probably wouldn’t be taking out anything if I already had the house. I would probably just tune the active portion of my portfolio to a more passive auto-pilot setting and take the summer off to refresh.

As it is I will definitely need some of this money within the next five years (perhaps the next few months) so I’ve returned to Personal Finance 101.

Or as The Accumulator might call it, sanity!

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1. Note I say “some”. I’m one of those nutters who owns a handful of Tesla shares, for example! [↩]