ETF My ETF Portfolio - Should I Consolidate?

Hi Folks,

I started investing in ETF six years back from whatever education and resources I got from the Internet. However, after continuing my education from PC, I think it's time to consolidate.

The below is my ETF portfolio with just one LIC. Please don't ask me how come I missed VGS. I know And that's why I have created this thread.

Overall, I invested around $100k and the market value is $140k.

A200 (370 units)
AFI (150 units)
ASIA (400 units)
HACK (300 units)
IVV (20 units)
IXJ (20 units)
NDQ (800 units)
VEU (60 units)
VTS (110 units)

My allocation strategy is 50% Aussie, 40% US and 10% world. I want to simplify it but it got messy (at Ieast I think)

VTS - It was the first ETF for US exposure but I stopped due to hassle with w8-ben form and not being domiciled in Australia, and started with IVV. But IVV unit is really pricy.

NDQ - I like this and want to keep for technology exposure.

By the time I wanted to start with VAS, A200 came. I presume they are pretty much and I don't need to sell or start with VAS?

Anyway, considering CGT and holding all the ETF over 12 months,

Should I consolidate VTS, IVV, VEU into VGS? I want to keep NDQ for IT exposure.

I invested in niche ETS such as cybersecurity, health care. I prefer to keep it as the amount is small.

AFI is the only LIC (I am still reading posts on PC for this)

I would appreciate your inputs. Please let me know if I can provide more information.

Thanks.

 

Why the desire to consolidate? Might save a few minutes max at tax time each year but cost you thousands in capital gain tax.

By all means consolidate future contributions, A200, VTS & VEU makes a fine core. Hack, NDQ, ASIA & IXJ are fine as small satellite if you just forget about them for the long term.

AFI and A200 are pretty much a double up in exposure as is IVV & VTS, but just pick one of each to add too for the future and forget about the others until you need to sell. Consolidation of ETF's for the sake of it is not worth it unless you're doing it in a big pull back that wipes out the CGT.

 

@dunno Thanks for the response

Do you mean I can stop VTS and VEU and switch to VGS?

There are two things that favours VTS and VEU

->It's 5900 (VTS & VEU) securities vs 1500 (VGS) (approximately). You also get no exposure to emerging markets (19% VEU).

-> I am happy to fill-out w8-ben form every three years but are there any other tax complexities for holding non-australian domiciled ETF?

 

No I meant future contributions should probably be concentrated towards A200, VTS & VEU as they in combination are good core holdings. Keep your other holdings as satellites until you have a reason (other than consolidation) for selling them.

Adding VGS at this stage would just be more duplication.

Other considerations like tax efficiency etc aren't worth more duplication for the $'s you have invested and certainly aren't worth incurring capital gains tax for.

 

Basically, your thread is asking should I consolidate and I'm saying I wouldn't bother. Stick with what you have started but maybe concentrate more going forward on the core broad holdings of A200, VTS & VEU. Let the other holding just chill.

Adding VGS now would be more unnecessary duplication and swaping things around when you already have decent building blocks for a diversified portfolio is just consolidation for consolidations sake which doesn't financially stack up when it incurs CGT.

 

I consolidated some of my ETF (and some individual share holdings) during the market pull back early in 2020 which saved me any major CGT issues.

I mainly ditched the smaller holdings and other laggards to redirect funds into refining what has become a larger, simpler, more focused portfolio over the years.
Maybe let sleeping dogs lie and let any future market pull back be your opportunity to cosolidate.

 

@dunno awesome. Thanks a lot.

 

So you waited for a crash so you could sell at a loss to avoid capital gains tax??

 

Sort of.... I was buying back in to 'the market' simultaneously so the end result (to date) meant less CGT to pay back then in exchange for kicking that can down the road into the distant future.

If I was to have simply cashed out it wouldn't have made sense, but as mentioned above I was consolidating the portfolio by 'swapping out' small holdings and laggards for more core EFT holdings.