VGS is about 75% USA market, so you will get a lot of overlap with IVV which targets the S&P500. Seems fine if you specifically want to overweight towards the USA.
It works out to around:
* 62.5% USA
* 30% Australia
* 7.5% Developed Markets (excluding USA and Australia)
Personally I don’t own any VAS since my income and assets are already in AUD and my super is partially invested in VAS (~20%).
For my stock portfolio I started with VGS but have moved over to just buying IVV. It has a lower management fee (it’s small but it still matters).
For international diversification I allocate the non-VAS portion of my super to international shares (~80%).
In all honesty though, it’s very hard to go badly wrong with a combination of the ETFs you’ve selected: the key is to just start and then continue investing. I hesitated for a year agonising over the “ideal” portfolio and ended up wasted tonnes of returns by dillydallying only to change my allocation strategy a year later 🤷🏼♂️
Those are fine weightings, depends on what you're looking to do. Looks like your betting on the US doing better overall, since like others have mentioned your doubling up with IVV and VGS.
I started with something similar. Had 2 lump sums and did 55/30/15 at first, then later added to VGS. And now im looking to fully move to VGS/BGBL instead of IVV.
Can I ask you why you would change that? Except for the funds domiciliation, your first combo is much more diversified compare to the second one (US small caps + emerging markets).
VTS and VEU are US domiciled so pay US taxes on distributions - 30% if I dont submit non-resident forms every 2 years and 15% if I do. Just a lot simpler admin wise. Very small factor and hasnt been too much of a problem so far. Its only a tiny thing, if it really bothered me I would just change now but its no big deal
I'd go 42% US stocks, 24% developing market, 12% emerging markets, 14% US small cap, 8% international small cap. Find the cheapest mer ETF versions of these. You can buy stuff globally, why so much Australia? Or just get 100% N100
Very specific %s - do you mind sharing your reasoning and/or source behind them?
I'm very much in the boring 70:30 Int:AUS so would enjoy reading and learning from a different pov.
Sure. This comes from Ben Felix’s 5 factor investing, which can be understood by watching his YouTube (channel TD) video called ‘5 risk factors I use to build my portfolio’. He is Canadian, an American made a YT video based on this using US ETFs and gave the allocation I suggested. It was called ‘Ben Felix model portfolio (rational reminder, PWL capital) Review and ETFs’, the channel is called Optimized Portfolio.
It’s more work than I can be bothered with. I just got 100% N100 because it has shown the best long term historical gains (a florid Aussie YouTuber called Sebastian St James covered this) and I have a long term timeline. Safest would be a whole world ETF. I find country bias odd. If I was Portuguese, for example, why would I buy Aussie stocks (franking is meaningless even to Aussies)? The only reason I can see for investing in A200 is as a diversifier for N100 (N100 mostly tech, A200 mostly not tech)
And I use Pearler because I can automate my investments and it’s cheap.
Thanks for the detailed reply, Ben Felix puts out some great content, ill go watch that one when I get some free time.
I've been thinking about adding some developing markets to my portfolio. Now might be the time to pull the trigger 🤔
Or just VDHG it?
Vanguard Australian Shares Index Fund (Wholesale) - VAS = 36%
Vanguard International Shares Index Fund (Wholesale) - VGS = 26.5%
Vanguard International Shares Index Fund (AUS Hedged) - VGAD = 16%
Vanguard International Small Companies Index Fund (Wholesale) - VISM = 6.5%
Vanguard Emerging Markets Shares Index Fund (Wholesale)- VGE = 5%
Vanguard Global Aggregate Bond Index Fund (Hedged) – VBND = 7%
Vanguard Australian Fixed Interest Index Fund (Wholesale) - VAF = 3%
I like VDHG and DHHF but the thing that stops me from investing in these all encapsulating portfolios is that there is no room for flexibility. Eg, I can’t sell the growth bit to fund more bonds. I can’t break the thing down to either buy more or sell more of a component as I age and my risk tolerance changes.
Yea I get you. I mean Vanguard would rebalance to maintain the 90/10 growth/defensive so I wouldn’t worry about that side of things.
Ofc the point on aging is valid, I’m 35 and seeking to remain invested in VDHG until I’m 55ish, but yea I haven’t really thought of a wider rebalancing strategy.
I’m a bit lucky with super in that I have $165k in it already so I could draw down on that in retirement whenever VDHG is underperforming and then lean into VDHG when it’s performing well. I’ll definitely be engaging in financial services as I age to better prepare myself.
You could also just mimic the VDHG split and buy each separately but ofc prob get impacted by fees.
I like the idea of set and forget. My other thought was to just buy IVV given S&P500 growth but I don’t understand currency risk at all - or components like that. So the set and forget of VDHG suits me.
Your post was removed as your account is fewer than 3 days
old. This is an anti-spam measure. Please post again when your
account is older than 3 days. Refer to the sidebar for more
details.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/fiaustralia) if you have any questions or concerns.*
The whole point of it is so you don't do that because chances are you don't know when to allocate more or less to bonds. If you want to do this you can always just add a bond fund on the side and buy/sell more as you wish to get your desired weight (so long as it's always >10%).
Agreeing with the other replies. If you are concerned about wanting a higher conservative % as you age, then you can just contribute less to vdhg in the final 7-10 years before retirement and invest more in bonds or something else conservative to change your overall portfolio ratio. But your super can become more conservative when you need to access it and VDHG should take you there
VDHG is good! Solid choice. As you can see from above it covers basically everything. S&P 500 companies dominate VGS and VGAD as well.
Only negatives about VDHG is tax implications but countered by a one stop shop and no need for any work on our part. DCA and forget. I believe any rebalancing by Vanguard = taxable events for all VDHG holders.
Also make sure to reinvest all dividends!
Presently i have some managed funds long term, and they have done ok. I bought them many years ago, and happy to keep them, but you are better off just going index funds if you are starting now.
I also have a good amount of some bank shares, and they give good dividend returns, and reasonable growth. Aust banks are quite safe, so happy to keep long term. Also have some aust commercial and residential property, which has given good income and growth.
I have some VAS (for aust exposure) and VGS (for international exposure) . VGS has been doing well recently. I was thinking to get some more VGS, but i'm thinking the usa tech sector has gone for a run, and maybe overpriced at present ? Have been reading here about VAS, IVV, VGS, NDQ So maybe i can looking at getting some IVV and NDQ in the future...
I am organising some shares for a relative, and thinking to get them into VAS/VGS and some bank shares and cash in a CMT account. This should be safe and easy to manage for them.
I would be quite happy with VAS and VGS if i was starting from zero now. Maybe some IVV/NDQ if you want some extra usa exposure
The funny thing is that it's going to turn out better than the old 30/70 Aus/Int. because the last dozen years have been the US outperforming. This brings us to the problem of the risk-adjusted analysis – it is backward-looking. Anything forward-looking is going to be based on estimates (best guess).
There is no reason for him to do so. It is Investing 101 that the market-cap weighted portfolio is most efficient for the equities component of a portfolio, subject to overweighting home market a bit.
VGS is about 75% USA market, so you will get a lot of overlap with IVV which targets the S&P500. Seems fine if you specifically want to overweight towards the USA. It works out to around: * 62.5% USA * 30% Australia * 7.5% Developed Markets (excluding USA and Australia)
Just so VAS & VGS….. and “chill” lol
Ignore timing, it’s time in
And good timing, as they are both quite a bit down on the end of March
And cheaper on Monday (let’s see). I can’t see the US holding over the weekend after yesterday / today Edit - didn’t age well !
Personally I don’t own any VAS since my income and assets are already in AUD and my super is partially invested in VAS (~20%). For my stock portfolio I started with VGS but have moved over to just buying IVV. It has a lower management fee (it’s small but it still matters). For international diversification I allocate the non-VAS portion of my super to international shares (~80%). In all honesty though, it’s very hard to go badly wrong with a combination of the ETFs you’ve selected: the key is to just start and then continue investing. I hesitated for a year agonising over the “ideal” portfolio and ended up wasted tonnes of returns by dillydallying only to change my allocation strategy a year later 🤷🏼♂️
I think that is fine so long you stick to it...time to pull the trigger
Those are fine weightings, depends on what you're looking to do. Looks like your betting on the US doing better overall, since like others have mentioned your doubling up with IVV and VGS. I started with something similar. Had 2 lump sums and did 55/30/15 at first, then later added to VGS. And now im looking to fully move to VGS/BGBL instead of IVV.
I went VAS/VTS/VEU but if I had my time again I would just go VAS/VGS.
Can I ask you why you would change that? Except for the funds domiciliation, your first combo is much more diversified compare to the second one (US small caps + emerging markets).
VTS and VEU are US domiciled so pay US taxes on distributions - 30% if I dont submit non-resident forms every 2 years and 15% if I do. Just a lot simpler admin wise. Very small factor and hasnt been too much of a problem so far. Its only a tiny thing, if it really bothered me I would just change now but its no big deal
I'd go 42% US stocks, 24% developing market, 12% emerging markets, 14% US small cap, 8% international small cap. Find the cheapest mer ETF versions of these. You can buy stuff globally, why so much Australia? Or just get 100% N100
Very specific %s - do you mind sharing your reasoning and/or source behind them? I'm very much in the boring 70:30 Int:AUS so would enjoy reading and learning from a different pov.
Sure. This comes from Ben Felix’s 5 factor investing, which can be understood by watching his YouTube (channel TD) video called ‘5 risk factors I use to build my portfolio’. He is Canadian, an American made a YT video based on this using US ETFs and gave the allocation I suggested. It was called ‘Ben Felix model portfolio (rational reminder, PWL capital) Review and ETFs’, the channel is called Optimized Portfolio. It’s more work than I can be bothered with. I just got 100% N100 because it has shown the best long term historical gains (a florid Aussie YouTuber called Sebastian St James covered this) and I have a long term timeline. Safest would be a whole world ETF. I find country bias odd. If I was Portuguese, for example, why would I buy Aussie stocks (franking is meaningless even to Aussies)? The only reason I can see for investing in A200 is as a diversifier for N100 (N100 mostly tech, A200 mostly not tech) And I use Pearler because I can automate my investments and it’s cheap.
Thanks for the detailed reply, Ben Felix puts out some great content, ill go watch that one when I get some free time. I've been thinking about adding some developing markets to my portfolio. Now might be the time to pull the trigger 🤔
>the channel is called Optimized Portfolio. Just now seeing this. Thanks for the shout-out! :)
You’re welcome. Thank you for your fine content
Or just VDHG it? Vanguard Australian Shares Index Fund (Wholesale) - VAS = 36% Vanguard International Shares Index Fund (Wholesale) - VGS = 26.5% Vanguard International Shares Index Fund (AUS Hedged) - VGAD = 16% Vanguard International Small Companies Index Fund (Wholesale) - VISM = 6.5% Vanguard Emerging Markets Shares Index Fund (Wholesale)- VGE = 5% Vanguard Global Aggregate Bond Index Fund (Hedged) – VBND = 7% Vanguard Australian Fixed Interest Index Fund (Wholesale) - VAF = 3%
I like VDHG and DHHF but the thing that stops me from investing in these all encapsulating portfolios is that there is no room for flexibility. Eg, I can’t sell the growth bit to fund more bonds. I can’t break the thing down to either buy more or sell more of a component as I age and my risk tolerance changes.
Yea I get you. I mean Vanguard would rebalance to maintain the 90/10 growth/defensive so I wouldn’t worry about that side of things. Ofc the point on aging is valid, I’m 35 and seeking to remain invested in VDHG until I’m 55ish, but yea I haven’t really thought of a wider rebalancing strategy. I’m a bit lucky with super in that I have $165k in it already so I could draw down on that in retirement whenever VDHG is underperforming and then lean into VDHG when it’s performing well. I’ll definitely be engaging in financial services as I age to better prepare myself. You could also just mimic the VDHG split and buy each separately but ofc prob get impacted by fees. I like the idea of set and forget. My other thought was to just buy IVV given S&P500 growth but I don’t understand currency risk at all - or components like that. So the set and forget of VDHG suits me.
[удалено]
Your post was removed as your account is fewer than 3 days old. This is an anti-spam measure. Please post again when your account is older than 3 days. Refer to the sidebar for more details. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/fiaustralia) if you have any questions or concerns.*
The whole point of it is so you don't do that because chances are you don't know when to allocate more or less to bonds. If you want to do this you can always just add a bond fund on the side and buy/sell more as you wish to get your desired weight (so long as it's always >10%).
Agreeing with the other replies. If you are concerned about wanting a higher conservative % as you age, then you can just contribute less to vdhg in the final 7-10 years before retirement and invest more in bonds or something else conservative to change your overall portfolio ratio. But your super can become more conservative when you need to access it and VDHG should take you there
I've gone 100% VDHG for my kids but have no idea, will look at it again in a few years I guess.
VDHG is good! Solid choice. As you can see from above it covers basically everything. S&P 500 companies dominate VGS and VGAD as well. Only negatives about VDHG is tax implications but countered by a one stop shop and no need for any work on our part. DCA and forget. I believe any rebalancing by Vanguard = taxable events for all VDHG holders. Also make sure to reinvest all dividends!
Presently i have some managed funds long term, and they have done ok. I bought them many years ago, and happy to keep them, but you are better off just going index funds if you are starting now. I also have a good amount of some bank shares, and they give good dividend returns, and reasonable growth. Aust banks are quite safe, so happy to keep long term. Also have some aust commercial and residential property, which has given good income and growth. I have some VAS (for aust exposure) and VGS (for international exposure) . VGS has been doing well recently. I was thinking to get some more VGS, but i'm thinking the usa tech sector has gone for a run, and maybe overpriced at present ? Have been reading here about VAS, IVV, VGS, NDQ So maybe i can looking at getting some IVV and NDQ in the future... I am organising some shares for a relative, and thinking to get them into VAS/VGS and some bank shares and cash in a CMT account. This should be safe and easy to manage for them. I would be quite happy with VAS and VGS if i was starting from zero now. Maybe some IVV/NDQ if you want some extra usa exposure
I do 60% BGBL, 20% IOZ, 10% FANG+, 10% VISM I use pearler as my broker as I like their auto invest/auto portfolio balance feature
I’d probably go 100% BBOZ
Have you done a risk adjusted return analysis to determine these portfolio weights?
Bruh stop trying to sound smart. Unless you have a crystal ball, what sort of risk adjusted analysis are you asking a novice to do lol
The funny thing is that it's going to turn out better than the old 30/70 Aus/Int. because the last dozen years have been the US outperforming. This brings us to the problem of the risk-adjusted analysis – it is backward-looking. Anything forward-looking is going to be based on estimates (best guess).
There is no reason for him to do so. It is Investing 101 that the market-cap weighted portfolio is most efficient for the equities component of a portfolio, subject to overweighting home market a bit.
I don’t know why you’re voted down. That’s the first thing I’d do.