ETF Asset Allocation

Discussion in 'Shares & Funds' started by Pavan, 6th May, 2019.

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  1. Pavan

    Pavan Member

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    Hi All,
    Been lurking for long time but first time poster.

    Just wondering if I could get some comments/feedback on below asset allocation. I am in it for long term 8-10 years.

    VAE Emerging Market Vanguard FTSE Asia ex Japan Shares Index ETF 0.40% 10%
    VAF Fixed Interest Vanguard Australian Fixed Interest Index ETF 0.20% 10%
    VAS Australian Shares Vanguard Australian Shares Index ETF 0.14% 15%
    A200 Australian Shares BetaShares Australia 200 ETF 0.07% 15%
    VGS International Shares Vanguard MSCI Index International Shares ETF 0.18% 15%
    IVV International Shares iShares S&P 500 ETF 0.04% 15%
    VBLD Infrastructure Vanguard Global Infrastructure Index ETF 0.47% 10%
    DJRE International Property SPDR Dow Jones Global Real Estate ETF 0.50% 10%

    Appreciate all your responses.
     
  2. blob2004

    blob2004 Well-Known Member

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    Just curious, is there a reason you wanted A200 and VAS? Is this purely to spread funds between two providers?
    Also there is a fair amount of overlap between VGS and IVV, is there a reason not going pure VGS, or if wanted to tilt USA to go VTS/VEU then adjust accordingly?
    What is your reason for going VAE over VGE?
     
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  3. SatayKing

    SatayKing Well-Known Member

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    Only comment is 8-10 years isn't long term. Long-term is your entire life. Just my view of things.
     
  4. Froxy

    Froxy Well-Known Member

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    Look at IFRA to compare to VBLD

    Maybe a VTS/VEU split as opposed to VAE/VGS/VTS
     
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  5. Pavan

    Pavan Member

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    G'day Blob - Splitting VAS and A200 is purely for my understanding on how each one performs over the same period of time. I wanted 30% of my portfolio to be in OZ shares and 30% in International hence i decided to split it in 15% each given both are covering essentially the same thing. Also IVVs capital gains are very healthy over many years hence i choose it.

    I also didnt prefer VGE since it holds some less desirable countries compare to VAE. Also it has slight advantage in fees.
     
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  6. Pavan

    Pavan Member

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    Fair point, I doubt i will need the money in even 10 years time so there are extremely high chances that i will keep it even longer. But just to start i am going to hold it for at least 8-10 years minimum.
     
  7. Pavan

    Pavan Member

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    Thanks Froxy - I will look into IFRA. Do you know any obvious benefit of selecting this over VBLD?

    Also since I have IVV, I skipped VTS and VEU again has some countries which I do not want any exposure. Also it has less exposure to India which has a lot of potential.
     
  8. Froxy

    Froxy Well-Known Member

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    Yep saw your reasoning just after my post. Sorry meant iVV. VTS/ IVV Interchangeable

    IFRA is hedged 50% and caps sectors and companies.

    @Nodrog is a big fan of IFRA. Can you restate your reasoning please mate, also to remind me!
     
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  9. The Falcon

    The Falcon Well-Known Member

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    IFRA is 100% hedged.

    50/50 refers to 50% utilities / 50% other in the asset mix.
     
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  10. Pavan

    Pavan Member

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    Thanks @The Falcon - Given your experience in the game, do you have any comments or feedback on my weightings and the actual product selection?
     
  11. The Falcon

    The Falcon Well-Known Member

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    No experience, just an opinionated amateur.

    1. Bin IVV and A200.
    2. Consider VBLD vs IFRA, could go either way.

    I like the portfolio otherwise. VGE/VAE is line ball for mine, so no comment.

    I'd echo @SatayKing comments. I wouldnt even consider 8-10 holding period. The holding period needs to be open ended otherwise hold more fixed interest to avoid dissapointment. Markets dont move to our timelines....you could well be underwater in 8-10 years from now.
     
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  12. Never giveup

    Never giveup Well-Known Member

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    Question, more like a clarification:-

    I understand everyone (most people) will have a Target to achive certain amount when they retire etc and they will be investing long term based on that goal and tweek it as required along the journey.

    Given that Aus is 2% of the world then how do you factor that when allocating funds within ETFs/LICs ?

    - Do you invest current available funds based on set % goal? E.g. overall final portfolio will have 30% Aus ETF and 40% Global ETF, 20% LICs and 10% Direct Shares.
    So the current availabke $100 will be invested with this split and keep building on it as the money become available.

    OR

    Do you see best value and put $100 and keep doing this as the money become available to get to final percentage?

    Although, there is no gurantee that one may find bargain in indivudual categories everytime the money will be available therefore the 1st approach seems good?!

    Did I ansr my own question?!
     
  13. Hockey Monkey

    Hockey Monkey Well-Known Member

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    You normally invest in the ETF/LIC that is furthest from its target percentage to minimise brokerage. This way you are naturally purchasing the one that is down relative to the others. Depending on your cost of brokerage and savings rate there will be an optimal amount to invest that balances time in the market vs costs. Eg Investment Frequency Calculator
     
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  14. Never giveup

    Never giveup Well-Known Member

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    T
    Thank you @Hockey Monkey - will check out the link and come back if any questions.
     
  15. Pavan

    Pavan Member

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    initially i went with investing $100 divided by % allocated to each sector. Then for the regular investment i usually top up the sector which is furthest away from target allocation.
     
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