What is the difference between VWRL and VWRP? I explain the No. 1 important difference.

Vanguard is amongst the best-known investment companies. They specialise in low-cost index funds and ETFs. I will look at two very similar funds but also different in one fundamental way.  The funds are VWRL and VWRP. If you are interested in other ETF funds, I have a list here.

What is VWRL?

VWRL is a fund that tracks the FTSE All-World index. The fund aims to purchase securities (stocks) in companies listed in the index. The aim is to track the performance of the index. The FTSE All-World index is an index of companies compiled by the FTSE Russell which is wholly owned by the London Stock Exchange.

The index includes roughly 3900 holdings in 50 countries, in both developed markets and emerging markets.

Importantly, VWRL is a distributing fund.  By distributing, the fund pays a dividend every quarter to holders of the fund.

What is VWRP?

Founded in 2019, VWRP is a relatively new fund.  The idea is that, like VWRL, the fund holds securities from the FTSE All-World index to track the performance of the index.

However, critically, the fund is an accumulating fund.  That means that the fund pays no dividends it receives from its holdings, and instead, the fund reinvests those dividends into more FTSE All-World index securities.

What is the difference between VWRL and  VWRP?

Now I’ve explained what the funds are, I can now answer the question of what is difference between VWRL and VWRP? The main differences between VWRL and VWRP are that VWRL pays a dividend every quarter, whereas the VWRP fund reinvests the dividends it receives from the companies it holds into the same companies. Otherwise, they are the same and contain the same securities.

If you are in the accumulation stage of FIRE, or your wealth, then VWRP may be a better bet for you as you won’t have to reinvest the dividend yourself.

VWRL may be better if you want to take an income from dividends.

I hold both, mainly because I did not know that VWRP existed as a newish fund.  However, for now, I’m going to invest in VWRP and see what happens.

2 thoughts on “What is the difference between VWRL and VWRP? I explain the No. 1 important difference.

  1. I’m the same, VWRL is the biggest holding in my portfolio but recent top ups have gone on VWRP, which I didn’t know existed until recently.

    I do like receiving dividends from VWRL however, which get reinvested.

    1. I figured that VWRP will save me the fee for reinvesting. I’m not sure how the value will grow compared to VWRL so it will be interesting to compare over time!

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