ETF Recommended index funds ?

@ASXGJ1 likes and beliefs will probably get you close enough to where you;re aiming. It's an important part of the process for an investor sticking with it, so well done with having some conviction.

I'd encourage you to continue to be curious about your likes and beliefs however as they are no substitute for maths and data.

 

If you are not looking for income to live off, volatility should not be a concern, especially if you dollar cost average. Anyway, none of this is relevant to you not 'liking' a high entry price.

Be concerned when you use 'like' with an investment without having a reasonable 'why' for it.

 

your analogy is correct but i still believe that market correction will happens anytime between now and 2022 and then i might go for VGS. I am not fully committed to VGS as much as I am with VDHG and VDGR.

 

ETF unit prices have very little meaning. If the ASX200 drops 10%, IOZ and STW will both drop 10% regardless of unit price. The only place unit prices comes into play is with DRP where a lower price will result in a lower average funds held back when rounding to the nearest number of units.

VDHG and VDGR hold exactly the same assets just in different proportions Eg 90/10 vs 70/30 equities vs defensive assets. By going 50/50, you are creating an 80/20 portfolio. If that’s your intent, I’d consider either rolling your own via VAS/VGS/VGE/VISM/VAF/VBND etc or holding 90% VDHG and 10% a separate bond fund.

Calculators are good when used appropriately, however, care should be taken not to rely too much on past performance when making investment decisions.

A good starting point would be reading Passive Investing Australia cover to cover

 

then your concerns are about underlying assets (which is fine, thats your call), not with the price of a unit of vgs. Vgs could do a 1 for 100 split and that wouldnt affect your opinion.

point being, if you dont like vgs because you think its too high, fine. If you think its high just because its $100 a unit, then that makes no sense.

 

Fixed it for you. No need to thank me.

 

Agree, my beliefs and likes are not substitute of maths and data but i am also considering "my own behaviour" in investment decision plus "ability to get income ongoing basis at or above 5%" basis. One of the reason I am coming out of individual stock picking to ETF is that I take too much stress seeing my stock going downhill by 50% alone (OSL, MMI etc) when other stocks and market doing well... so you can call me impatient or hypersensitive and for that particular reason and to avoid "sell" decision based on performance of my own stock I am leaning towards ETF which mostly goes with index (up or down).

 

Yes, that is what i am trying to do 80/20. The individual scenario that you mentioned is not for me because my small investment budget where paying $9.5 to selfwealth not worth if i can achieve similar results with VDHG & VDGR. However I will use your vanguard tool and check how those combination performed in past compare to VDHG & VDGR combo... as a curiosity.

 

When you roll your own, you would typically only buy one ETF each period, whichever is most behind your desired allocation.

Alternatively go with VDHG and an bond fund which will allow you to more easily vary you bond allocation at various stages of your life.

As soon as you go with more than one fund, you are taking on responsibility of rebalancing anyway.

 

The entry price is irrelevant. That would be like saying you only invest on days when it rains.

 

Bringing the conversation back to Aus/Global allocation.
As shown in the attached. It was my understanding that when looking at total return, the ASX is pretty much on par with US markets (largest % of global funds) over the long term.

We are about to start a new phase of investing and my plan was to go 50/50 VAS/VGS.

I do take note of the ASX being a very small part of the global market.
However, given that the goal of this phase of investing is to generate passive income and that we live in Australia. My theory was that the ASX component will provide higher income and tax benefits through franking credits. Is this incorrect?

 

Good chart but why the chart stops at 2015? interesting to see full chart up to 2020.. !

VAS and VGS both good choice but I don't think they invest in fix interest instrument such as bond so may be can consider VDHG as it will give exposure to US, AU, International plus bonds. However VAS might give you better franking credit if you are eligible... IMO.

 

Yeah I think it's an old chart. But I don't think that is relevant. US probably up a bit since 2015, but as the chart shows, It's not a straight line. US up sometime, ASX up at other times.

We are early 40s so can afford to be heavy equities for a while yet. Fixed interest can come later, particularly with current yields.

 

This doesnt make sense, SuperHero Shares are held in CHESS by nominee, they dont have a HIN , but you are the beneficial owner with an account. If SuperHero goes under your shares are held in CHESS and can be transfered to another broker. When you invest in a ETF your shares in side the fund dont have a HIN and arent held by CHESS if the ETF goes under ?? The government believes it safe enough to allow you to manage your Super in it without an SMSF. Cant say the same for direct ETF and some other investment vehicles.

 

I am not lawyer or accountant but I read somewhere that if Superhero goes under then their asset which includes all the shares of the holder will be sold first to pay off the debt of the creditor and the remaining goes to the customer if any left that is why it is a risk. But if selfwealth goes bankrupt then they can't sell my shares to pay for selfwealth debt... !

when it comes to ETF, you are correct and I believe some ETF did gone under same like the company we invest so buying risk of ETF or a individual company is same if any of them goes bankrupt. However I personally invest in Vanguard as they are too big to fail like CBA in my opinion and if it did failed then i will be sitting with many of you and warren buffet in centre link queue... !

 

The operating company of Superhero and the custodian are completely different entities without co-mingled assets. Creditors of Superhero would have no access to assets in custody.

The main risk in the result of Superhero the company collapsing is a delay in being able to access your assets while it all gets sorted out.

 

It's less of an issue for ETFs and more a problem with individual direct shares as you lose access to voting rights and can have reduced access to corporate actions like SPPs, buy-backs etc.

 

Good point, although if your buying direct shares for $5 (rather than zero cost ETFs) you might as well go with Open Trader CHESS sponsored at $5 / 5K trade

 

Just persuing the thread and found a recent chart