My goal is fairly long term (pension money) investing 50€/ monthly for the next 15 years.
I am close to my 50s now.
My strategy is - 100% equity accumulating only ETFs - highly deversified - 20 ETFs ( different industry/ sector.
Is that a good approach, considering my small monthly invest and the high diversification?
My portfolio wil consist of :
UCITS only (EU resident)
S&P500 materials, Industrials. IT,; EU Defense,Global Aerospace, Global semiconductor, etc.
All non-overlapping.
The 50€ monthly invest will be equally devided 2.5 € each ETF
Hi, and welcome. It probably would help if you set out the list of ETF’s. Really I can’t say if what you’re proposing is a “good” or “bad” strategy, but equal weighting of sectors sounds a bit random to me. Not saying it’s a wrong thing to do, but a collection of sector/thematic ETF’s could end up performing very differently to the overall market.
My own allocation is to mostly global cap weighted ETF’s (e.g. MSCI ACWI/FTSE All World etc), which are highly diversified with thousands of stocks, and they are to an extent self correcting, in that companies that grow end up having a larger proportion of the index over time (but on the downside, there is concentration risk in these types of funds, due to the current high allocation to the huge US tech companies). And I then use smaller positions to add “overweights” to regions or sectors I favour, such as an Emerging Markets ETF, or a UK equity ETF, or whatever.
Depending on where you are, as I think these vary by region, but there may be “core” model portfolio pies available to you designed by Blackrock, Vanguard, WisdomTree etc. which might be a good starting point for a sensible core portfolio.
Thanks for the insightts,
As I keep reading more and more, the overall conclusion for my situation
heads towards a one global ETF only , considering also the fact with a many ETFs I have to pay the extra fees for all of them,
And yes, the huge tech concentration could be a bit of a higher risk, although in a long term the ETFs are supposed to readjust it.
I am now strongly inclined to a World ETF
I consider also the Gert Kommer ETF - although higher TER
it will outweight/ or on par the combined lower TER of 20 ETFs
Anyway, I plan to enter in a couple of months (trying to catch the April dip) - if any xD
And wheather I choose Gert’sor onother World one, set and forget the monthly deposits
Thanks again.
I think there’s a lot to be said for keeping it simple. Sites like Just ETF have some good education articles on portfolio building with ETF’s. I had never heard of the Gerd Kommer ETF but it looks interesting, although the higher fees vs the more common global funds has to be weighed up, as fees compound over time.
In my opinion there’s a lot of things already in progress that could cause at the very least a dip in the markets in the coming months… Then there’s the things we don’t know about! So the idea of regular investing is a good one. Good luck!