ETF VDHG or VAS + VGS

Discussion in 'Shares & Funds' started by William W, 14th Jan, 2020.

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  1. The Falcon

    The Falcon Well-Known Member

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    Expected returns are lower for all asset classes. If you have a inter-generational time horizon I dont understand the need to make tactical calls on bonds. I think really its more about a natural aversion to fixed interest and trying to rationalise it.

    Falling yields. Understanding the rush to fixed income

    "While bonds can experience low to negative returns in the event of rising interest rates, the reinvestment of a higher coupon and the benefit of compounding means investors with a medium to long time frame are eventually better off holding bonds".

    For those that want to go all equities thats fine in the long run, sequence risk aside. Personally, I will always want some cash and some fixed interest in the portfolio to provide options at a time when cash is in short supply. These are the best times to be buying assets...houses, boats, businesses etc. I never want to be "all in".
     
  2. Snowball

    Snowball Well-Known Member

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  3. LeeM

    LeeM Well-Known Member

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    VDHG is now $49.94. It's price at inception date was $50.19. With banks are are falling so fast, is VDHG or VAS still good ones to buy or not?
     
    Last edited: 12th Mar, 2020
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  4. LeeM

    LeeM Well-Known Member

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  5. Redwing

    Redwing Well-Known Member

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  6. Nakan

    Nakan Member

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    I've heard some people recommend a VTS/VEU split instead of VGS. Does anyone have an opinion on this?
     
  7. Han.MGF

    Han.MGF New Member

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    Hi all,
    Beginner here and haven't invested in ETFs before. I'm considering buying VAS/VGS for the short term, say 12-18 months, until I am ready for a deposit for my first property.
    Open to thoughts, suggestions and advice.
    Thanks
     
  8. Trainee

    Trainee Well-Known Member

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    Thought: Short term investing in this market is madness unless you are prepared to trade it.
    Suggestion: high interest account that has a government guarantee.
    Advice: not qualified to give any.
     
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  9. SatayKing

    SatayKing Well-Known Member

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    Tell us how much are you prepared, or want, to lose within that time-frame.
     
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  10. Islay

    Islay Well-Known Member

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    Hi, old fuddy duddy here. Thoughts are shares are for minimum 10 years preferably for ever. 12-18 months the suggestion is a term deposit. No advice.
     
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  11. Never giveup

    Never giveup Well-Known Member

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    ASIC releases extraordinary warning for mum and dad investors

    Hi Mate, given the last 4/5 replies- overall sentiment is avoid short term investing. However everyone has different risk appetite and have dufferent capital to invest hence different strategies can be adopted.

    Given that you have highlighted the property purchase with an assumption that in 12-18 months you will be making some gains to assist with the property purchase then have you considered other side of the coin - in case you can't make those gains, will you be able to push back the property purchase and if yes for how long ?

    There are alot of experts here and you will find threads around day trading who are making millions but keep in mind, everyone's circumstances are unique and you need to take steps based on your end game.
     
  12. berten

    berten Well-Known Member

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    +1

    Typically you wouldn't want to invest in shares if you need the money liquid in the next 5-10 years.

    For 12-18 months, the only real option is HISA or Term deposit in my opinion.

    All the best
     
  13. MB18

    MB18 Well-Known Member

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    For simplicity and/or smaller contributions I would go for VDHG. Otherwise VGS + VAS & MVW. I personally hold both VAS and MVW together as the latter reduces the concentration of big banks.

    As someone else mentioned, the best result is going to be determined by just sticking to whichever plan you choose.
     
  14. R S Gumby

    R S Gumby Well-Known Member

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    Ideally you'd be holding for 5 - 8 years
    VGS & VAS and also VDHG
    However, for your time frame I don't think the ETF's are your best option
     
  15. itsmescottyc

    itsmescottyc Well-Known Member

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    Can one of the brains trust in here shed some light on the difference from a tax perspective of VAS + VGS vs VHDG?

    VHDG seems to have lumped investors with a relatively large taxable distribution in June 2019, which could be difficult if it happens on an ongoing basis.

    VAS is obviously highly franked and although VGS isn’t, the distributions are consistently quite minimal.
     
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  16. Han.MGF

    Han.MGF New Member

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    Thank you all for the repsonses. Good to have insight from the experienced. Glad I didn't make any impulse decisions. I'm new to this forum and can definitely thea value in it.
     
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  17. Zenith Chaos

    Zenith Chaos Well-Known Member

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    1. Equity investing minimum timeframe is 7 years
    2. VGS vs VTS/VEU very difficult to differentiate.
    3. VDHG is possibly the best simplest option out there given automatic rebalancing etc.
    4. The one issue I see with VDHG is the lack of flexibility E.g if you're approaching retirement and want to reduce risk (quite easily mitigated by buying a cash / bond instrument). The problem is that one would not want to be forced to sell to achieve the appropriate allocation.
    5. Ideally the wholesale fund has equivalent MER and allow investors the flexibility to change allocation on the fly, within reason (IE once a quarter).
     
  18. Redwing

    Redwing Well-Known Member

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    Agree with the bolded bit, you could add a bond index such as VGB or VAF external to VDHG to increase your asset allocation (if you so desire) as you progress. with Vanguard re-balancing VDHG to keep AA all in line
     
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  19. hieund85

    hieund85 Well-Known Member

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    Hi all,

    I am working on an ETF structure for long term investment (15-20y+) with two options in mind:

    1. VDHG
    Pros: simple, no rebalancing need, save brokerage fee, kind of set and forget
    Cons: inflexible structure, not very low MER

    2. 20%VAS + 60%VGS + 10%VAE + 10%VISM/IJR/NDQ (or)
    Pros: flexible structure that can be tailored to my needs/strategies/circumstances
    Cons: 4 ETFs so not very simple structure, especially with DCA, rebalancing, brokerage fee, etc.

    A bit of info about my situation: mid 30s, top MTR (but have a low income partner), 4xIPs in Australia so want to structure the ETFs toward international equities (VGS) with some level of exposure to emerging/Asian market (hence VAE) and small cap stock (hence VISM/IJR/NDQ), and no need for hedged ETFs. Plan to DCA between $4k-$5k per month or at a higher level every two months.

    I am leaning toward option 2 as I like the flexibility and a bit more hands on approach but not sure if it is a good one and can be implemented efficiently. I also want to have ETF in my super so planning to move to one of the super funds that offer the DYI option (Australian Super, Care Super, etc.).

    Can I please have some feedback about my above plan from the experts here? Thanks.
     
  20. inertia

    inertia Well-Known Member

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    My apologies, I can't remember who posted this recently, but a good analysis of VDHG is available here:

    VDHG or roll your own - Passive Investing Australia

    cheers,
    Inertia
     
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