Combination of ETFs?

Hi,

I’m considering complementing my portfolio with a few ETFs.

My goal is for growth and some dividends from big names. I am not close to retirement.

I already hold stocks in individual companies such as BP, Cisco, GSK, IBM, Pepsi etc. Mostly US holdings but I have gone for what I have heard of and understand.

My thinking now is to put some money into one or several ETFs, to increase my exposure to the things which I don’t necessarily understand or have the time to follow in any level of useful detail.

So far I have the below as a basic idea, if I were to put in extra cash for the ETF side of things it would be divided as follows…
35% in Emerging markets (VFEM dist or VFEG acc)

30% in All world high yield (VHYL)
35% in S&P500 (VUSA) accumulating or distributing? Or possibly HDLG.

I know there will be some overlap with my individual holdings, but could I get some opinions?

Cheers

If you wanted to get world exposure why not just use a combination of VWRL and VFEM (or EMIM)

Your exposures are far too heavy towards emerging markets too, I could entertain 15%, but 30% is too high unless you have incredibly high tolerance to risk and volatility.

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@Rasputin says he is trying to balance other holdings that he already has. So we don’t know what % emerging markets will end up being. Perhaps 5-10%, which would be fine.

I’d suggest US holdings should remain at least 60%.

I have a Vanguard ISA, for access to their non-ETF funds. Platform fee is cheap, but won’t beat 212 :slight_smile:

Take a look here, they have a wide range of ETFs - most of which are on 212 I think - and they give heaps of pertinent info to help with your decision.
https://www.vanguardinvestor.co.uk/what-we-offer/etf-products

Personally, I’m in:

  • VMID (FTSE250, UK-focussed, better long-term returns than the 100)
  • VWRL (Global equity mix, although US-heavy because it’s hard not to be)
  • US Equity Fund (a bit like VUSA but with more stocks)
  • UK Long Duration Gilt (a bit like VGOV but longer duration)

I was looking at VFEM, but it really hasn’t performed well… I’m avoiding it.

HTH,
Tom

[edit] Not sure what the policy is here on talking about other platforms, but to be clear I’m not trying to promote them - just suggesting some of their ETFs which are available through 212.

Over most time scales, VUSA does better than anything. I wonder why I bother with any other regions.

But emerging markets has actually been the best performer this last month.

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If you want to compare ETFs, I suggest using a website like : www.justetf.com

Alternatively, I made an excel spreadsheet outlining the returns, fees and size of the main ones.

Just bare in mind, some of the data may be a month or two old, but essentially it’s still useful to check out. :v:

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If you are looking for dividends then VHYL is fine. But if you are looking for a source of income, have you considered REIT? Real Estate Investment Trust come in different types like Shopping Malls, warehouses, Care Homes, hospital, communication towers etc Which could complement dividends from shares.

@Abel I hadn’t really considered that. Which ones are you using on 212? And do you think they will be as strong post corona?

You’re right. I will probably go lighter on the emerging markets.

Cheers. I had thought that about VUSA. It is such a huge market with so many global brands so it could provide most of what I’m after. Emerging Markets for the companies I never use or know about but do well elsewhere!

Do you have any holdings in VMID?

Thanks for that. I’d been using their website already and it’s pretty good. I did identify a few of their products on 212 to use.

I will definitely look at VMID.

VMID is not wildly different to VUKE or ISF in its performance. Year to date VMID has underperformed the FTSE 100, but who can predict the future? Why not have a bit of both if you want UK exposure? But I would not put too much in the UK market. The world weighting of UK is only about 4-5%. The FTSE 100 is heavy in oils, banks and tobacco, though less so now that oil and bank stocks have fallen so much during the pandemic. I look at this top 10 in the FTSE 100 and can see at least 5 that I am not keen to own. Personally, I have about 3% of my portfolio in FTSE 100 and FTSE All Share trackers, and another 0.5% in two individual UK companies and 2.5% in one UK managed fund.

A difference between EMIM and VFEM is that the former includes South Korea.

@Richard.W This all sounds perfect for a pie. Will have a pie with a few different ETFs and tweak the weighting as I see fit.

I share your sentiment about the FTSE 100 to be honest. It feels very “old world” compared to US markets. Probably why I was drawn to them more.

There are ETF that deal with REIT on 212 but I have not used them as many are invested in shopping mall/retail/offices which, even before the corona pandemic, I believed to be in structural decline.

Instead I invested in individual REIT shares that reflect my belief in the future such as e-commerce logistics (Tritax Big Box), healthcare (Primary Health Properties) and telecommunication/5G infrastructure (American Tower). These shares were bought for the long term and in my opinion will still thrive post corona.

But as always DYOR ( Do Your Own Research).

Hope this gives you some ideas.

That’s great thank you. You’ve given me plenty of ideas there. Your thinking on how these will still be relevant after corona makes sense to me.

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