VUSA ETF v IITU. which is better?

Hi,

I’m looking at moving money from my bank into a low risk ETF like the vanguard S&P 500 ETF, or the ishares S&P 500 Information Technology Sector ETF

It looks to me like they both track the same thing, the S&P 500

I am based in the UK, and the Vanguard one is currently £52, in a year it has increased 14%

Whilst the Ishares one is 1,184p, (£11) in a year it has increased 34%

If they’re tracking the same thing, is it not better to put all my money into the Ishares one as i would be able to hold more shares of it? And their growth has been higher

I’m sure it isn’t that simple, but i have googled and all i can find in terms of recommendations are ETF’s such as SPY which isn’t on T212. If anyone could help me understand the difference between them it would be greatly appreciated

They do not track the same thing. VUSA tracks 500 stocks. IITU tracks the subset of 77 in the information technology sector. That sector has performed well recently. So you have to take a view about whether you think that will continue to be the case. Perhaps another sector will do better next year.

If you choose VUSA then at least you will be sure to own some of whatever sector of the US equity market does best next year.

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To also add

Ah okay thanks, it seems the thing for VUSA to be worthwhile is you need to be putting a large amount like £5000 into it for it to be worthwhile

I’m only 22 so dont have huge amounts saved, was thinking for example if i invested £200 and it only went up from 52 to 53 i’d only make £4, tough decision to go for something low risk but also worthwhile when you don’t have a large budget to play with

Split your £5000 up.

You don’t have to put it all in low risk, low reward. Also keep some back in funds.

Say you might put:

£1000 very low risk, very low reward
£1250 low risk, low reward
£1250 in medium risk, medium reward
£500 high risk, high reward

£1000 in spare funds

My biggest tip is don’t go in heavy and chuck all the cash in at once to the stocks/ETFs.

Learn about RSI and look at the daily/weekly/monthly and see if it’s overbought or oversold etc

Take profit, don’t get greedy, and don’t panic

Thanks

I plan on not being greedy, and happy to hold onto things for the very long term, but then also have a keen interest in learning more about stocks and putting a smaller amount aside to invest in individual stocks

I think it is easier to understand what’s a risky stock and what isn’t based on volatility, but harder to assess with the ETF’s on T212 as they all seem to be on the up over a yearly period

If VUSA is considered low risk would the IITU be considered higher risk because it is only tracking 77 tech companies?

Your link was helpful btw thanks, it is quite frustrating trying to research when a lot of things are spoken from an American perspective, being British i don’t want to make silly mistakes and do something like investing in a stock/etf in a foreign currency when i could’ve saved money by doing it in my own currency

Well it’s all about comparison the IITU tech portion of the 500 is excellent. But if tech takes a drop for whatever reason (we are in a bit of a bubble atm) then you’ll be more impacted than having the 500 that covers all sectors.

You could keep going up the tree until you track the world.

It’s the same with picking FAANG they could be deemed less risky than normal businesses as they potentially should be able to take a meteor hit and still recover.

There’s many ways to play the game, generally it’s best to start by sticking to things you use like PayPal or MasterCard or AMD etc

With the smaller businesses and stocks like AIM you have to watch like a hawk. But higher risk comes with high reward.

As you say flipping 5p into 10p can be an easy way to double your money but get it wrong and it goes to 2.5p and you’ll be at a unrealised loss of 50% down. Turning 500p into 1000p could take many years.

I would stick with larger blue chip and dabble with speculative once you start learning technicals and chart analysis. It does take time and losing money to fully get to grips. Better to do that in practice, or with smaller amounts first before diving in.

Does Trading212 has the RSI feature?

Sure its listed under the full name of Relative Strength Index.

In these screengrabs the green is the 50 EMA

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