Is a Vanguard collection pie a good idea?

📬 Stocks & ETFs requests
1

Hi all,

Is something like this a good idea for a long term plan and diversification?

Thanks

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2

That really depends on your investment strategy. Some people prefer to buy a global index tracking ETF and follow the market. Others might choose to invest in a particular country or region they think will outperform.

This pie feels muddled to me and has no clear strategy with overlaps too.

A good resource I find helpful is Banker on wheels.

3

With just 2 of these holdings you can achieve maximum diversification:

  1. 90% Vanguard FTSE All-World
  2. 10% SPDR MSCI World Small Cap

The rest are all included in Vanguard FTSE All-Wold anyway, so by including them you are decreasing diversification!

4

Hi, thanks both.

I was thinking of doing something like the following but would be also good to know your thoughts on this too:

  1. Keeping it simple (No S&P 500)
    80% FTSE All-World
    10% SPDR MSCI World Small Cap
    10% Emerging Markets

  2. Adding S&P 500 for extra U.S. exposure.
    60% FTSE All-World
    15% S&P 500
    15% SPDR MSCI World Small Cap
    10% Emerging Markets

I wanted to add in Emerging Markets but these are also included in FTSE All-World. So both of these are adding additional Emerging Markets in but Option 2 is also tilting more towards US.

They all seem to be in entwined with each other so really depends where I want these to tilt more towards.

Based on this, if you still think @HuskyDogg that you’d do the 90% / 10% ratio then I’m good with that but want your thoughts before I commit.

Thanks

5

Personally I prefer to keep it simple, as simple portfolios are easier to stick to.

So yes I’d still do the 90% All World, 10% Small Cap allocation. Overlap is tiny which is a plus.

Instead of investing in small cap stocks, consider to invest in small cap value stocks. They provide more diversification vs a market cap weighted fund like Vanguard FTSE All-World, and are riskier, meaning higher expected returns in the long term.

Actually my own portfolio is just these two funds:

  1. Vanguard FTSE All-World
  2. Avantis Global Small Cap Value
6

There are some stocks in both of them, since FTSE covers some small small caps. Recommend you to read this comparison.