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ETF Portfolio allocation

Discussion in 'Medium/Long Term Investing' started by Sisto5, Oct 17, 2019.

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  1. Sisto5

    Sisto5

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    Hi All

    Im Looking at investing in ETF's. I have been with colonial first state for almost 20 years but due to the fees I am looking to switch to something with a lower MER. I was originally going to go with the Barefoot Investor's Idiot Grandson portfolio (VAS/VEU/VTS) but I don’t like the idea of having to fill in paperwork due to VTS/VEU component not being australian domiciled. My plan was to split the portfolio 65% VAS/35% IWLD as a alternative.

    I have approx $150k to invest for 15-20 years or possibly longer if I decide to hand it down to children. I have already invested 37k into VAS and 17k into IWLD

    After some research i have changed my mind a little and am looking to go the following-
    VAS-$37k 22%
    IWLD-$17k 11.5%
    VDHG-$80k 52.5%
    VAP-$20k 13.5%

    This gives me the following exposure-
    Australia-54.5%
    USA-23.5%
    International other than USA 17.5%
    Bonds/fixed interest etc 5.5%

    It also gives me access to med/small cap, emerging market and a little more property exposure. I would prefer to be 100% shares as I have 15+ years to invest but I don’t mind the small percentage of defensive as it may come in handy as I get closer to retirement.

    This could be used as an idiot grandson type scenario(dividends supplement retirement and then passed down to children) or it may also need to be sold off completely if I decide to retire early or pay out loans prior to retirement.

    This portfolio mix will give me an MER OF .21% which is far better than the 1.5-2% I’ve been paying all these years.

    Any thoughts on this portfolio? Have I missed anything? Any suggested alternatives?

    Thanks in advance
     
  2. sptrawler

    sptrawler

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    Sounds like a reasonable plan, do they have dividend re investment, which would make life easier. IMO
     
  3. Sisto5

    Sisto5

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    Yes they do... another reason I want away from VTS/VEU. They do not.
     
    sptrawler likes this.
  4. Sharkman

    Sharkman

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    if having to fill in the W-8 BEN form is what's preventing you from investing in VTS (it's not that big of a deal TBH, but to each his own), you could substitute IVV in its place. it's Aust domiciled, except it tracks the S&P 500 (instead of the 3600 or so stocks of the US total market index).

    i am not a big fan of the Vanguard diversified funds. just a matter of personal taste really, there's nothing wrong with them if their specific allocation is what you're after. but i don't want any bond exposure, and the MER is too high for me. 0.27% vs 0.04% may not seem like much, but compounding is going to make the difference more and more pronounced the longer you invest.
     
  5. Zaxon

    Zaxon The voice of reason

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    I'm not a fan if DRPs due to the tax complications. If you pawn your tax off to an accountant anyway, I guess fair enough. But if you do your own taxes, it can be easier to get your dividends/distributions, pool them up into a larger amount, then make fewer buy transactions.

    If you want to, you can even use your distributions to branch out into other types of ETFs (or shares), outside of your core investments. Perhaps specific countries, factor investing, or anything else you think might have an edge.
     
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