I’m planning to invest in this monthly and hold for the long term (likely minimum 20 years but maybe longer as i’m 22 currently).
I have gone with the approach of tracking the world with 30% of my portfolio being VWRL and 25% being VHYL. 9% is MSCI world to add more weight to globalised companies.
I also have a lot of focus in dividend ETFs and am reinvesting dividends into the pie
I have then added more ETFs to get exposure to regions and industries that I think will grow and do well in the long term (e.g. a gaming ETF, and some Asian ETFs.)
Is there anything I am missing here, anything else I should be looking to add or any red flags in my approach that I have missed?
Did you chart this combination vs a random All-World index lets say for the last 10 years or so. It almost feels like this will be as flat as any other world index. This is a massively personal opinion but I would not buy any of these may be except QQQ/EQQQ despite being an old(ish) guy. It is so general and diversified that it feels like buying bonds. Again nothing wrong with that, just not my personal flavour.
I make kali my words.
I would say that for 90% of these ETFs, on long term, you will be better served with QQQ and VUSA.
Picking diversified ETFs is complicated because many of them has poor past performance, even I personality having some for EU zone, Asia and Brazil… they do not return me more than S&P500 and Nasdaq… I’m consciously having less overall performance in name of diversification
When you repeat that loud it makes you thing a lot
Probably worth just going VWRL/VUSA + EQQQ to have the same effect as this portfolio. Maybe keep one or two of your favourite others (global clean energy, eSports and gaming, global water?) But the “high dividend” ones generally don’t do any better than their regular counterparts.
Not a bad pie. I’d suggest it’s a little scatter gun. Fair bit of duplication too. I’m a bit of a Boglehead, so the latest factor/trend ETFs are not my cup o’ tea but each to their own!
Not ETF fan, but if I was to invest via ETF, I would go with historic performance/statistics.
Even tho I don’t think it is best time for lump sum investing in S&P or Nasdaq, but DCA in VUSA would be my pick and also sprinkle IBTM/IBTS.
I don’t trust flavor of the moment ETFs like Cloud computing or specific industry.
So in short, to much of various ETFs , diversity has benefits up to some point. While over diversity can lead to lower performance. Not sure it lowers risk by much, I think at certain point risk/reward is at such low point that you just lower risk by insignificant amount while lower reward substantially.
Yes I think i’ll remove the US & UK high dividend ETFs and reduce my allocation to VHYL based on what i’ve seen from looking into it after some of the comments here and some other threads on this forum.
Might then add S&P 500 but im just wary of adding any more allocation to the US at the moment. What I have is already weighted heavily in the US and im not sure if that’s a good idea for the next few months. I don’t want to make a habit of timing the market but just might hold off putting more than a couple of % into S&P500 for a few months.
As far as ETFs go, I have VWRL, EQQQ, ESPO (for a little bit extra exposure to tencent). These are currently doing quite well but it’s a pretty volatile period right now and anything could happen.
Personally I would hold off on Tencent as the US are thinking of booting out all Chinese Companies connected to the CCP (they refuse to be audited and could be worth much less than what we know of).
I mean it is a viable choice of course but I am watching how the US and the World deal with China at the moment and every company is connected to their Government which could mean that every one of those companies will drop in value like a stone.
Over the timescales you’re talking about I’d definitely go with ETFs particularly if you want to invest and forget. Otherwise you’re going to have to do more due diligence on individual stocks to try and beat the market.
My only real comment would be take care that you’re not duplicating coverage in some of your ETFs ie does your Vanguard all market duplicate your MSCI all market; are you over-exposed to Japan in developed Asia Pacific and FTSE japan; same with various USA ones; plus are your whole market ETFs duplicating some of your more focused regional ETFs? If you are duplicating then you are throwing out elements of your weighting and not giving much greater diversity.
I plan to stick to ETFs with thid portfolio. So far, they are all passive but I am looking to add an actively managed ETF as well, once I find the right one.
Yes, the FTSE All World ETF is to give diversified global coverage.
I then purposely duplicated some markets to add weight. I.e. I wanted more exposure to tech so added the Nasdaq ETF. The MSCI World ETF was to add weight to bigger global companies. I also think Japan will do well in the long run so added small allocation to a Japan ETF.
If I am going to invest in the Vanguard FTSE All World ETF then I think almost any other ETF that I add to my portfolio is technically duplicating the coverage.
