ETF Exchange Traded Funds (ETFs) 2017

Yes agreed. The proof will be in the pudding, or distribution statements. Unfortunately, every path one looks at has inherent drawbacks. Each person will need to weigh up as relates to their situation. To date, the performance of the Lifestrategy unlisted funds has been hampered by fund structure. Lets see what happens going forward.

 

This is not a fault of the fund obviously - as you have picked up, the reason the fund holds fixed interest is to use for "dry powder", rebalancing into equities when there is a market sell off. So, the fund will take care of those opportunities as part of its structure.

Obviously if one thinks they will get the itch, keep some cash on the side or apply lotion.

 

I think it comes back to how impacted one is by their behavioural traits.

Ideally investing in single asset funds in a lower tax environment and rebalancing with new contributions provides the best tax outcome. And just like St Jack if one is wealthy enough living solely off the distributions from the funds with some surplus for reinvestment (and rebalancing in the process) is potentially the ideal situation.

 

The four Vanguard Diversified Index ETFs represent a milestone in the Australian market, as the first ETFs allowing investors to gain diversification across and within all major asset classes, while making a clear choice about how much risk they take on.

The conservative (VDCO), balanced (VDBA), growth (VDGR) and high growth (VDHG) ETFs offer investors simple, single trade access to Vanguard's global expertise in portfolio management and asset allocation, with annual investment costs at just 0.27 per cent.

Or a $2.70 management fee for every $1,000 invested into a diversified portfolio



Also interesting to look at from a Global Village perspective

All of the World’s Stock Exchanges by Size

 

The .27% fee, is that the total fee or is that the fee for buying the underlying funds. Say VGS is .18 and one of the others is I think .48. Does the .27 go on top of these fees?

 

Reads as if total fee, it's Vanguards response to the Robo-Advisors with each ETF being a share class of the existing $7B index funds

VDHG has 90% equities and 10% income, on the flip side VDCO has 90% income and 10% equities

 

The VDHG approach is similar to what Warren Buffet wants done with his family's inheritance once he is gone. He states 90 percent S & P index fund (Vanguard) and 10 per event govt bonds.

VDHG is a series of index funds not just S & P though.

The question mark over the total fee needs clearing up though.

 

Just read the PDS. It states that as the ETF also invests in underlying funds controlled by VGD the fees for these funds will be rebated.

 

@Nodrog

Just chanced upon this and wondered if still the case with regards to accessing funds in term deposits, is 31 days still the go, or have Banks moved on?

Banks require customers to give 31 days notice if they plan on accessing term deposit accounts early

RETIREES with cash tucked away in term deposits will be forced to wait up to one month to access their own money if they try and withdraw funds before the maturity date.

 

Dunno, probably. I don’t tend to use TDs much. I prefer high interest accounts where if you shop around the rate is similar or in some cases better than TDs. And importantly cash is at call, no waiting required.

 

With the US market now closed for 2017 Buffett has decisively won his passive vs. active bet.
​

I suspect it won't be long before we get another update from him along these lines.

 

He won the bet but his premise that the active investor will by definition underperform the passive is flawed

 

Yes a classic.

I admit to still investing in some very high fee funds including hedge funds. But I do it through LICs (FGX / FGG) where these expensive fund Mgrs and most of the company service providers provide their services pro-bono. The LICs then donate 1% of NTA to nominated charities. God forbid I even get Geoff Wilson’s fund for 1% rather than 1.1 plus 22. Although that’s cheap compared to some of the others. So if the LICs performance are crap I can proudly state that I’m doing my bit for charity. If they do well I can then say how clever I am. That said I also own VAS / VGS. Hopefully I’ve got one winner in our portfolio I can talk about at BBQs.

FGX:


FGG:

 

I don't think he meant it applies to everyone, but there are proofs to show that passive will beat active if you assume the active managers charge higher fees.

On your post, can you explain why?



{Note from mods - thread continues here: Exchange Traded Funds (ETFs) 2018}