ETF Your favourite ETFs

I like ETFs that are low cost and dumb (not a bad thing) index trackers. Therefore VAS (Vanguard Australian Shares) and VGS (Vanguard Global Shares ex-Aus) are my picks for my purposes - core holdings that I can buy and hold forever. You could very likely Boglehead your way to wealth with just these two and avoid a lot of pitfalls that set many people back.

"Smart" beta ETFs looking to outperform/seek dividends don't interest me (I have been tempted before ) as; they have higher costs & turnover and I don't believe rules based out-performance is likely to be sustainable in my long term 20+year term I'd be looking at. For (slightly) more active management I prefer to let a quality manager make decisions.

 

This is what got me started looking into ETFs a few months back, listening to planet money podcasts during lunch break.

Episode 688: Brilliant vs. Boring

 

Probably one of the more popular ETF portfolios is the Boglehead equivalent, simple as:

Stocks:
VAS (Australia)
VGS (International - unhedged)

Bonds:
VAF (Australian bonds)
.... Some are choosing cash at the moment given the low bond yields and higher risk.

Add to it as you like including Property (local and Int) and International Bonds.

Some ideas for you:

ETF Asset Allocation Models / Portfolio Strategies:

https://static.vgcontent.info/crp/i...ardETFPortfolioStrategies.pdf?20160213|091500

https://www.spdrs.com.au/education/files/SPDR_Strategies_international_asset_allocation.pdf

https://www.blackrock.com/au/interm...portfolios-for-individual-investors-en-au.pdf

https://www.blackrock.com/au/interm...del-portfolios-for-professional-investors.pdf

Not what I do but there ya go. Hopefully it will add some momentum to this section of the forum.

 

You wouldn't be referring to the boring old LICs by any chance would you?

 

They are plenty exciting enough for me.

 

current ETF holdings
VAS ( bought in 2011 ) a top 20 holding
in alphabetical order
HVST
IHD
QFN
SYI
VHY

( all are DRPed )

i have held IEM and SLF, both exited in profit but neither were performing adequately (for me )

currently HVST is to be accumulated in the dips

possible future buys MNRS , ILC , and ZYAU

the ETFs are bought to complement the LIC holdings ( human decisions v computer decisions )

MNRS has two flaws ( imo ) one it is illiquid and because the portfolio is 100% international gold miners ( no Aussie miners like GDX has ) the value don't change much during of trading day

MNRS maybe when the gold price plummets

 

I enjoy listening to the Money Tree podcasts. Very American but still interesting. Whats great is you can listen to the older podcasts. A lot of index content.

 

now my personal tweaks ( on VAS and others )
1. is sign up to the DRP ( lock in those gains )
2. add extra when the price ( index ) is low ( i have resisted reducing when the index is up except SYI )

now personally i like to super diversify ( i am trying to have some of the best action , not everything in just one or two places )

yes my brokerage is mind-numbing ( it a bad way ) but that is the price of insurance ( i can't afford a complete wipe-out i will not have time or money to recover )

another casual observation is the ETFs track the INDEX ( and if the shares in that index change so does the portfolio ... although LICs like ARG might do that better , but at slightly higher costs , others don't and you might have a LIC that is an XJO snapshot taken in 1985 ... again not always a bad thing )

VAS ( my biggest ETF ) is still less than 2% of my total holdings

 

CatCafe ,

i do not consider LICs boring ,
i use them as an extra way to achieve an outcome , as well as educational and an extra research source ( i include SOL as a LIC more in the style of Buffet , with 'hands-on' stakes in investments )

each investment vehicle has it's strengths and flaws , it is the investors job to extract a superior performance out of the investment cash

 

using VAS as the example

i bought small parcels as the index fell during 2011 ( willingly taking the brokerage impost )

now almost 5 years later

courtesy of the DRP ( pays 3 monthly ) the units held have increased 24.5% and the unit price ( SP ) is currently up 22% .

obviously most will think unit price ( gains/losses ) when i was aiming to cost effectively accumulate extra units ,

VHY was bought in a single buy in the same year

courtesy of the DRP ( pays 3 monthly ) the units held have increased 34% and the unit price ( SP ) is currently up 17% ( despite the lower brokerage costs )