Fidelity Index World and Vanguard LifeStrategy 100% Equity are two of the most popular low-cost passive funds offering exposure to global equities. Fidelity’s fund holds £10.6 billion in assets under management, while Vanguard’s has £8.5 billion.
Though both target global markets, they differ significantly in structure, strategy, and costs.
Key Differences in Approach
Fidelity Index World is a straightforward passive fund that mirrors the MSCI World Index by directly holding all its constituent stocks. As of 31 March 2025, 71.5% of its assets are in the US, reflecting the index’s focus on developed markets.
Vanguard LifeStrategy 100% Equity, on the other hand, doesn’t follow a single benchmark. Instead, it invests in 10 regional Vanguard index funds. This includes a notable 25% allocation to UK equities and 10% in emerging markets. It also holds smaller companies, offering broader market exposure. As a result of this more complex structure, its ongoing charge is 0.22%, nearly double Fidelity’s 0.12%.
Performance and Market Exposure
Vanguard’s UK and emerging market exposure has been a drag over much of the last decade but helped during the recent downturn in US equities. The 25% UK weighting is static but reviewed regularly by Vanguard’s Strategic Asset Allocation Committee to ensure it meets investor preferences.
This home bias, Vanguard explains, is based on UK investors’ historical preference for domestic holdings. For those wanting a more globally neutral approach, Vanguard offers a version of the LifeStrategy range without the UK bias.
Importantly, Vanguard maintains a consistent asset allocation and avoids tactical shifts. This appeals to investors who prefer stability over trying to time the market.
Portfolio Depth and Holdings
Another key difference is the number of companies held. Fidelity Index World holds around 1,350 stocks from the MSCI World Index. Vanguard’s US Equity Index fund alone, part of its LifeStrategy portfolio, includes more than 3,500 stocks by tracking the broader S&P Total Market Index.
Vanguard’s use of multiple index providers—FTSE, S&P, and MSCI—adds further diversity. Each provider has unique criteria and methodologies, offering a wider blend of global equities.
Who Manages the Funds?
Fidelity Index World is managed by Geode Capital Management, a passive investing specialist based in Boston. Geode, originally part of Fidelity Investments, became independent in 2003 but still works closely with Fidelity International for sales and operations.
Analysts view this partnership positively. Danielle Farley at Hargreaves Lansdown highlights Geode’s cost-conscious approach and the team’s deep experience, with many members having over 20 years in the industry.
Vanguard, with its well-known passive investing expertise, also boasts a strong team. Both funds have received a “Recommended” rating from Square Mile Investment Consulting & Research.
Choosing the Right Fund
According to Jason Hollands of Bestinvest, the choice depends on an investor’s geographic preference. Vanguard’s home bias appeals to UK investors, especially those wanting less currency risk. Fidelity, meanwhile, offers a pure market-cap-weighted global approach.
Bestinvest favors Fidelity Index World mainly because of its lower fees. “Costs can significantly impact long-term returns,” Hollands said.
However, advisers may still prefer Vanguard’s LifeStrategy range for clients with varying risk appetites, given its suite of funds with different equity-to-bond mixes.
Farley summed it up best: “Fidelity Index World can be paired with UK or emerging markets-focused funds, while Vanguard LifeStrategy 100% Equity offers a ready-made global portfolio, albeit at a slightly higher cost.”
Related topics:
