ETF How do I better diversity my ETF's

So Currently I only have $2K in VAS and VGS, so a 50/50 split. I'm looking to add a further 10K.

I've thought about adding more ETFs such as VGE,VQU, Nasdaq 100 and VGA.

I'm not sure whether I should spread it over all six or there's a better way?

Thanks.

 

EDIT: Sorry just realised it should have said VAS, VGE, VQU, VAE, Nasdaq 100 ETF and VGA

 

Sometimes less is more.

Do you really want to spread $10k over six ETFs or focus on building up the current holdings until you have sufficient additional funds to include other ETFs which will have a meaningful effect?

Rough rule of thumb could be each holding should be around 10% to have an impact.

Your decision though.

 

Not worth the effort given the amount? Spend your time increasing your income or saving more instead.

 

You could consider diversified ETFs such as VDHG, DHHF etc that may align to what you are trying to achieve with much less effort, particularly with auto rebalancing.

Theres plenty of information on these ETFs in other threads

 

When more is more

With a shotgun, you're bound to hit something, or you could step it up a notch



VAS, VGE, VQU, VAE, NDQ, and VGA

VQU & VGA?

 

@Redwing, I've got to give it to you as you certainly know how to.......



........the party.

 

Gotta throw some VISM in there for the international smaller caps. And VSO for the Aussies.
Though I'm still worried there isn't enough Burkina Faso exposure here...?


@jack0194 K.I.S.S. mate. And use the ETF thread.

 

For you mean VGAD which is the same as VGS except hedged to AUD

And maybe instead of VQU, do you mean VEQ which is already covered by VGS

When you are ready look at emerging markets (VGE or VAE) and small caps (VISM)

 

Yes! Oh wow, I really stuffed up that post. So really It's probably better to keep putting more in to VGS and VAS and maybe add a third eg. VGE, VAE.

 

To expand, VEQ is 100% Europe, VGS is ~20% Europe.




NOTE: 'Other' is Africa, Sth & Central America, Russia, Middle East and er.. others!

 

Also noting that VGS pays a regular quarterly dividend while historically VGAD has not*

* but when it does, it can be a doozy!

 

whether VGAD pays a dividend or not depends on the currency movements of the period. The yield is used to pay for the hedge.

 

VAS+VGS have great coverage of Aussie+Global performance even though global is dominated by USA it's almost always what you want.
They are a little light on emerging markets, small caps, infrastructure, and property. It depends on your goals, just starting out it's not worth it with the brokerage costs to spread across more - and even pushing exposure into these 4 sectors I mentioned may not increase results, it may even decrease results.

Personally I have VGS + A200(A200 is almost the same as VAS, just a different manager and 3% different allocation)
VGE I keep at 10% for emerging markets.
Infrastructure I don't diversify to specifically.
Small caps I don't do either (I already have crypto which covers my high risk allocation)
REITs I have alot of trusts but ONLY because I need yield to live off, I wouldn't buy REITs as a starting portfolio.

For 95% of people in growth phase all you need to do is hold VAS + VGS, or if you want super easy zero work just buy DHHF every month as a single fund solution (I do in my SMSF).

If you want to read about portfolio allocation for "fun" I can highly recommend Lyn Alden's free material. It's USA based but global focsused, substitute the ETFs she mentions for VAS, VGS, VGE: Start Here
But don't get bogged down in over-trading and spending more time analysing rather than focussing on increasing your savings

 

What I'd do in your situation is just keep adding to VAS/VGS. With a total of $12k invested diversifying further doesn't really make sense at the moment. For example if you put 10% into something else say VXX, (fictional ETF), then you have $1200 in that ETF. If that does 1% better then you have gained $12.

So just keep adding every quarter to VAS/VGS, topping up each to get back to the 50/50 split. You can think about diversifying when you have say $100k invested. In my opinion it's not worth diversifying until you have $10k in that diversification.

Does your username imply you were born in January 1994, so 27 now? If so, you have a long investment horizon ahead

*** Not Advice ***

 

Between VAS/VGS you have diversification across circa 1700 companies and numerous countries. You dont need any more.

Once your portfolio is large and well established is the time to tinker a little... I added some MVW to skew away from the big 4 banks etc, and VAE to align with my crystalball view of the future. Nonetheless VAS/VGS are and always where the backbone of my ETF holdings.

 

Think about why you use index etfs in the first place. Because you think the index, and low costs will do as well or better than active management.

if you dont think the basic index etfs give you enough diversification, or doesnt have the right focus, why use them? Just pick individual shares.

doesnt make sense to say you dont have the confidence to pick individual shares and then say the index etfs arent enough. Especially at that size.