eft advice - anyone invested?

dozerz

dozerz

Well-Known Member
Silver Stacker
have recently been looking to diversify into an eft, lots of options around and past performance not a good indicator of future returns.

is anyone invested or can recommend a good fund? some i am looking at are ivv or voo, also vangard products like vas, then vge and vae to diversify.
 
Is that EFT or did you man ETF (Exchange Traded Fund)? I prefer the LICs (Listed Investment Companies), as there's a few out there with extremely low fees and some regularly do better than the indexes. For Australian share coverage my favorite LICs are AFI and MLT.
 
yes sorry should be etf, exchange traded fund. thanks for the tip, will do some research on lic.
 
Most people have adequate exposure to Australian shares through their superannuation. Also, if Australian shares are doing well, our economy is probably doing well, jobs plentiful, high wages, happy good times for all.

A big consideration for ETFs that track the ASX300, like VAS, is that they are heavily weighted towards banks. If property nosedives, not only will your home value decline, your super is probably going to take a hit as well as any money you have invested in those ETFs. Property is a huge industry here, so mass job losses and unhappy times ahead. It's too many eggs in the basket.

I think to diversify effectively you should weight heavily overseas. My superannuation fund's high growth option only allocates 30% in overseas shares. Let's say my superannuation accounts for 20% of my net wealth. Then my overseas exposure is only 20% * 30% = 6%. IMO, no where near enough given my opinion of Australia's future.

Weight according to your portfolio as a whole. I personally like Vanguard's VGS - international minus Australia with dividends reinvested, and only 0.18% in fees.
 
thanks, thats why i had vge and vae in the mix but yet to define which percentage to allocate to each. will check out vgs also and decide on a percentage allocation.
 
At the end of the day, most stocks ETFs are just pre-picked 'combos' of stocks.

If you look at the stocks holdings of a fund, you should avoid buying ETFs containing anything you wouldn't want to hold.

As an example, my own investment strategy involves avoiding most bank stocks so I avoid any ETF that contains more than a certain percentage in financials.

dozerz said:
some i am looking at are ivv or voo, also vangard products like vas, then vge and vae to diversify.
Click to expand...

I can see you like Vanguard packaged funds; I am guessing you noticed their low management costs and/or expense ratios. IMHO, IVV is the best S&P 500 replication fund around.

Having said that, low management costs isn't everything. I also like some ETFs packaged by SPDR and BlackRock iShares.

A common trap with ETFs is the 'narrative' they sell can be highly misleading, for example, a 'Cybersecurity ETF' I recently saw;
it was just a collection of networking equipment manufactures (Cisco etc) and a few general software consultancies (Accenture etc).
 
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