ETF Portfolio

Asset allocation, risk, diversification and rebalancing. Pros/cons of hiring a financial advisor. Seeking advice on your portfolio?
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Mickey19
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ETF Portfolio

Post by Mickey19 »

Hi guys,

as this is my first post in this forum I'd like to have some opinions on my ETF Portfolio which I want to open these days. Even though I am from Europe and might have a different perspective, there might be a few peope who can help me out.
I'll just give you the basic information, no specific ETFs because I want opinions on what makes sense in this specific structure and build-up in my portfolio and what does not... So I left any information out that is about taxes, TER and possible dividends.

Info: investment 5k (not a lot, I know but I just started working), with paying 200 every month into that
Risk evaluation of myself: scale up to 10, I would consider myself a 7.

I do not only want to have stock ETFs (if you call them like that) because of risk management, so I would like to include something that is more independent on what happens on the stock market. I thought about the following:
60% stock ETFs
30% Public Bond ETF
10% real estate/ raw material ETF

1.
70% MSCI World
30% MSCI Emerging Markets
(Even though I would like to diversify a little more because there are not many Small & Middle Caps included. That having said, I would consider more ETFs in Asia & Europe like MSCI Europe/Asia Small Caps, Euro Stoxx50, and so on.
I was also thinking about the S&P 500 but from what I have heard, it is basically covered by the MSCI World Index already...is that right?)

2. IShares Markit IBOXX EUR Liquid Sovereigns Capped or X-Trackers II IBOXX Global Inflation
3. X-Trackers DBLCI - OY Balanced ETF

Any advise is welcome, thanks a lot! Even though you do not know some ETFs I would like to hear if it makes sense
- to have more than 4 ETFs with that amount of money I can invest (and costs which is why I do not want to have like 8 ETFs yet)
- to include more stock ETFs an diversify more /replace something
- put a focus more on either real estate or raw matieral ETFs
- something you would absolutely not invest into

Thanks again!
Ben
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Re: ETF Portfolio

Post by longinvest »

Ben,
Mickey19 wrote: 13 May 2017 13:59 Even though I am from Europe and might have a different perspective, there might be a few peope who can help me out.
I don't know how investing works in Europe. Others might know. I'll just express a few comments.
Mickey19 wrote: 13 May 2017 13:59 I thought about the following:
60% stock ETFs
30% Public Bond ETF
10% real estate/ raw material ETF
Real estate and materials are included in broad stock indices. Unless I had a good reason, I would not give more weight to these sectors in my portfolio.

Any reason to avoid high-quality investment-grade corporate bonds? How about inflation-adjusted bonds?
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Re: ETF Portfolio

Post by Taggart »

Before the 2008-09 financial crisis I had a more complex portfolio in the RRSP than I do now. Various dividend ETF's for Canada, the U.S. and International, along with a Canadian bond ETF and 5% each allocated to Canadian, U.S. and International REIT ETF's along with some individual equities. After that downdraft and refreshing my readings of Jack Bogle, I decided to simplify. Out went all the dividend ETF's and all the REIT's and stocks. Since 2010 I've been just using a matching combination of four broad based index ETF's along with similar TD e-Series funds to take care of the monthly distributions. Nothing else, and the portfolio seems to perform just fine.

I sometimes take a look at the ten year performance records of some of the more complex portfolios down in the U.S. versus a simple three asset class index portfolio and the simple solution seems to come out the winner.
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optionable68
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Re: ETF Portfolio

Post by optionable68 »

Considering you only have $5k, you may want to consider TD e-series index funds over ETFs until you accumulate enough money to negate the trading commissions
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adrian2
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Re: ETF Portfolio

Post by adrian2 »

optionable68 wrote: 16 May 2017 20:01 Considering you only have $5k, you may want to consider TD e-series index funds over ETFs until you accumulate enough money to negate the trading commissions
He's located in Europe...
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Re: ETF Portfolio

Post by Taggart »

Hi Ben,

I don't know if you're still around but I just picked up a book I ordered from the library by Andrew Hallam. "The Global Expatriates Guide To Investing", published 2015.

From his book the vast majority of index ETF's seem to be listed on the UK Exchange.

Not knowing which country you live in, I can only comment generally on the index ETF's that Andrew recommends for a European investor.

Couch Potato Portfolios:

European Bonds

iShares Euro Government Bond - IBGS

European Stocks

iShares MSCI Europe - IMEU or

iShares MSCI Europe (ex UK) - IEUX or

Vanguard FTSE Developed Europe - VEUR

U.S. Stocks

iShares S&P 500 U.S. - CSPX

Developed Asia stocks, excluding Japan

Vanguard FTSE Developed Asia (ex Japan) - VAPX

Japanese Stocks

Vanguard FTSE Japan - VJPN

Emerging Markets Stocks

Vanguard FTSE Emerging Markets - VFEM

Global Stocks

Vanguard's FTSE All-World UCITS ETF - VWRD (USD) or VWRL (GBP)
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