New to ETFs. Roast my portfolio

[u/Crab_Apple31]

So like I said, I’m new. I like to think I’ve done some research and have come up with what I think is a sound strategy, but am a total n00b and looking for feedback or suggestions. Main goal is ‘savings’ - fortnightly deposits into each of the below for the long term (10+ years). Looking for low fees, minimal overlap between ETFs and a broad spectrum so I’m not overexposed to risk (particularly with the uncertainty of Trump about to take office in the US). So here goes:

1) IOZ 2) IVV 3) VEU

Idea would be to have 33% of my portfolio in each but any suggestions in that regard would be welcomed!

Currently I hold IOO also, thinking of keeping that but not investing any more and moving all future deposits (for that particular component) to IVV instead.

So have at it! Is this dumb?

[u/Bhaa_0007]

Overall sounds good and IVV 500 is better idea than holding only 100 companies in IOO. Allocations seems good to me

[u/Crab_Apple31 → u/Bhaa_0007]

Mucho appreciated! Any thoughts on QUS in addition to or instead of IVV? The distributions are insane but otherwise higher fees and lower performer in all other measures.

[u/Spinier_Maw]

IVV and VEU are asymmetrical pairs.

VEU is US domiciled, so you will need to fill out W-8BEN forms. It also has emerging markets and small caps.

IVV is AU domiciled and only has US large caps.

If you want to keep it simple, do IVV+IVE. That's AU domiciled and developed world large caps.

If you want the total market, do VTS+VEU. That's US domiciled and includes developed world large caps and small caps, emerging markets large caps and small caps: everything basically.

[u/Crab_Apple31 → u/Spinier_Maw]

Thanks. I’ll be really honest and show my naivety, I had not come across where they were domiciled so far in my research so that helps a lot. I think I’ll stick with IOZ/IVV/IVE. Thoughts on adding QUS into the mix as well as/instead of either IVV or IVE?

[u/Spinier_Maw → u/Crab_Apple31]

I do hold MVW and QUS which are equal weight counterparts for Aus and the US. They have different risks from the usual market cap ETFs, so be sure to read up a bit.

You shouldn't hold QUS instead of IVV, but you can hold QUS with IVV.

[u/Fast_Economist_8917 → u/Spinier_Maw]

I’m curious as to the basis for your last comment beginning “you shouldn’t”.. why shouldn’t OP?

[u/Spinier_Maw → u/Fast_Economist_8917]

Because equal weights and market weights may take turns outperforming.

If you only have QUS and magnificent seven keep outperforming, QUS will underperform IVV. If magnificent seven crash, QUS will outperform IVV. Who knows which way the market will go.

For me, I hold almost 50/50 of market cap and equal weight for that reason.

[u/CashflowConnoisseur]

Hi there! Dividend investor with $2M portfolio here.

At the end of the day, the split depends on your investing goals.
I invest in VAS for dividend income, and IVV for capital growth. 

Currently 70% VAS + 30% IVV, but aiming for 50:50 eventually. I have higher VAS as I'm aiming for FI soon from the dividends.

VGS is another decent option for international exposure because it’s a broad low-fee fund tracking the MSCI World Index, excluding our home country Australia. It invests in 1,500 stocks from around 23 different countries including the U.S, Japan, U.K, Canada, France, and Switzerland.

If you don't need much dividends soon, investing only in IVV going forward is a solid plan.

[u/Crab_Apple31 → u/CashflowConnoisseur]

If just going IOZ for aus market and IVV, would I be overexposed to the US market/risk? That was my only consideration in including IVE with IVV, otherwise I’d just stick with the one.

If so, is that where VGS becomes the better option instead of doing IVV+IVE? VGS has higher fees and has performed slightly less well than IVV, so is there also a benefit to separating that out across IVV & IVE instead of having it in just VGS?

[u/CashflowConnoisseur → u/Crab_Apple31]

When investing in an ETF we need to know the underlying holdings/ companies. One of the reasons why IVV/ S&P500 index has performed so well recently is because of the tech/ Magnificent 7 companies, that although based in the US, operate worldwide.

I’m not too familiar with IVE/ MSCI EAFE Index. You’ll have to assess whether the companies in that index would outperform/ underperform other indices.

Most people come to the conclusion that they don’t know. So they invest in VGS, which is probably 75% driven by S&P500 anyways.