ETF Asset Allocation

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

Join Australia's most dynamic and respected property investment community
  1. Pavan

    Pavan Member

    Joined:
    8th Jun, 2018
    Posts:
    7
    Location:
    VIC
    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

    Joined:
    6th Jun, 2018
    Posts:
    65
    Location:
    Brisbane
    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?
     
    Pavan likes this.
  3. SatayKing

    SatayKing Well-Known Member

    Joined:
    20th Sep, 2017
    Posts:
    2,172
    Location:
    Australia
    Only comment is 8-10 years isn't long term. Long-term is your entire life. Just my view of things.
     
    Parkzilla, Silverson, Anne11 and 5 others like this.
  4. Froxy

    Froxy Well-Known Member

    Joined:
    22nd Sep, 2018
    Posts:
    66
    Location:
    Sydney
    Look at IFRA to compare to VBLD

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

    Pavan Member

    Joined:
    8th Jun, 2018
    Posts:
    7
    Location:
    VIC
    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.
     
    Froxy likes this.
  6. Pavan

    Pavan Member

    Joined:
    8th Jun, 2018
    Posts:
    7
    Location:
    VIC
    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

    Joined:
    8th Jun, 2018
    Posts:
    7
    Location:
    VIC
    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

    Joined:
    22nd Sep, 2018
    Posts:
    66
    Location:
    Sydney
    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!
     
    Pavan likes this.
  9. The Falcon

    The Falcon Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,381
    Location:
    NSW
    IFRA is 100% hedged.

    50/50 refers to 50% utilities / 50% other in the asset mix.
     
    Froxy and Pavan like this.
  10. Pavan

    Pavan Member

    Joined:
    8th Jun, 2018
    Posts:
    7
    Location:
    VIC
    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

    Joined:
    18th Jun, 2015
    Posts:
    2,381
    Location:
    NSW
    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.