Are you overpaying for US index with a single global tracker?

[TeddyK301]

Hi all

Please can someone convince me about moving my equities portfolio to a single global fund.

I'm totally on board with stuff I've read on Monevator from Lars Kroijer and others on the wisdom of letting the global index do the smart work and heavy lifting.

I'm not concerned about currency hedging, as UK bonds and cash in the emergency fund can do that job.

The only thing holding me back every time I think about transferring all to one pot is fees.

Currently, my Vanguard equities holding are split 80% in FTSE Developed World ex-U.K. Equity Index Fund, 12% in FTSE U.K. All Share Index Unit Trust and 8% in Emerging Markets Stock Index Fund, with 0.14%, 0.06% and 0.23% ongoing fees respectively.

I'm slowly working on paying all monthly savings into the the FTSE Dev World ex UK fund to water down the home bias I have going on in the UK.

My question about moving it all to the FTSE Global All Cap Index Fund is: at 0.23% ongoing fees, would I not be overpaying for the US holding, which makes up almost 70% of the fund given it is cheaper to hold in the FTSE Dev World ex UK fund (or in a specific US tracker). Same question - to a lesser extend - about the UK portion, which i'm currently paying 0.06%.

Am I worrying about peanuts here or is it a genuine worry as the pot gets bigger?

Thanks very much

[MustacheAndaHalf]

Isn't Lars Kroijer more concerned about 2/20 fees, and active vs passive?  If you're considering 3 passive index funds versus 1, what is wrong with that?

That assumes you have the same allocations as the overall world.  Using "Vanguard Total World", I get: 56% U.S., 33% international developed, 11% emerging markets.  If you can save on expense ratio by moving 56% into a passive index fund / ETF that covers the U.S. market, that's saving money.

I ignored an (American HSA) account for years, and finally split it.  I went in the opposite direction you're wanting to go.  I sold my total world ETF, and bought separate ETFs for US, developed, and emerging markets.  But preference probably matters more, as in my case the savings add up to 1% over 27 years of compounding.