Pros/Cons for VGS or VGAD

I thought there was merit in a simple valuation rule like the above after listening to the Hamish Douglas interviews. However I suppose the trouble with a “valuation” type rule, eg AUD < 65c go Hedged, is it’s assuming the relatively recent average of AUD will remain the norm in the future. @The Falcon ‘s suggestion of choosing a set allocation between hedged / unhedged preferably based on desired overall portfolio exposure to AUD vs Non-AUD then simply rebalancing removes the guesswork and provides better risk management against an unknown future.

Then the other main decision is where best to hold Funds / ETFs (assuming not using TOFA) that are hedged given taxation issues.

 

Hmm, seems those concerns about the introduction of 5G could be right. That or standing too close to the microwave when reheating yesterday's soup.

 

I've considered "asset location" issues (really went down the rabbit hole on that) for our situation and in the end perhaps counterintuitively I settled on that it doesnt really matter. For us the only difference between company, trust and SMSF is that the former are 80/20 and SMSF 90/10. Ultimately, you construct a portfolio for optimal risk / return characteristics from the top down and use the vehicles to manage the tax outcomes.

 

For sure if you are very heavily exposed to AUD denominated assets then VGS would be preferred and you'd question the need for any hedged international exposure, up to 20-25% of total assets perhaps. In our case I need hedging of some international exposure to get to 60% AUD denominated (incl. hedging) which is comfortable for me.

 

Personally post simplification I no longer hold Hedged VGAD as overall global exposure is limited to 30 - 35% and the concern is mostly about home country risk management, not best performance.

Yes my brain has been fried beyond repair from multiple sources external and internal. Hence best ignore anything I post.

Probably why I hold so few LICs / ETFs now as there’s not enough functional brain capacity left to deal with anything greater than the number of fingers on one hand.