Selecting ETFs

[spiderbill]

Hi All
Having got my HYP over 100k (doing ok but got a little singed by Carillion and Petrofac recently) I've been looking for some diversity and other avenues of investing to balance it out, and am cautiously feeling my way into ETFs.

On the basis that you don't really learn about something until you have skin in the game I've put a toe in the water with VWRL since that seemed pretty well regarded and fairly safe, but deciding what to buy next is my question. I haven't seen much discussion here about individual funds, such as we often have on the share boards, so I've been casting around in the research seection of my TDDirect account. I thought I'd look at Europe first, since the Eurozone seems to be recovering, and have been looking at a few that Morningstar seem to rate highly.

iShares European Property Yield UCITS

Amundi ETF MSCI Netherlands UCITS

Amundi ETF MSCI EMU UCITS ETF DR

iShares MSCI Europe UCITS ETF EUR (Dist)

Does anyone have any thoughts about any of these or any others I should be looking at?
What do you think of Europer generally, or should I be looking elsewhere such as Asia or the US?
Are there any websites or books I should be looking at for a better understanding of the issues and trends around this type of investment?

TIA
Spiderbill

[flint]

Spiderbill

You could check out EUN, a European ETF which tracks the largest 50 companies - the STOXX 50.
It has been in my portfolio for may years.

[OLTB]

Does anyone have any thoughts about any of these or any others I should be looking at?

Hi spiderbill

I have a similar portfolio to you I think - I have some in HYP, some in a passive portfolio and some in some ITs.

In answer to your question on books to read for further investigation, some posters had previously recommended Tim Hale's 'Smarter Investing' which I bought and read before deciding on the following passive portfolio:



I am aware that the holdings I have for my exposure to Bonds/Inflation Linked Bonds aren't passives, but I'm not too keen on gilts (short-dated / index-linked) so chose RICA and PNL as bond 'proxys' as they seem to be fairly defensive minded and I have a number of years before wanting to draw on them and don't want to be too defensive. In terms of portfolio return, as the portfolio was only set up earlier this year, they haven't moved much! I'll have a better idea this time next year.

I'm not too sure on the question of Europe-only passives, but I think that VWRL would have a smattering of European holdings.

Cheers, OLTB.

[kempiejon]

For Europe I use Vanguard Developed Europe ex-UK VERX - like you I have a HYP of UK listed shares so didn't want to replicate too much.
For Asia VAPX which is exJapan, I hold VJPN for that and for the USA VUSA which is a S&P 500 tracker rather than other slices of the US market.
However if you already have VWRL you might well end up doubling up.

[spiderbill]

Spiderbill

You could check out EUN, a European ETF which tracks the largest 50 companies - the STOXX 50.
It has been in my portfolio for may years.

I'll certainly do that, thanks.

[spiderbill]

In answer to your question on books to read for further investigation, some posters had previously recommended Tim Hale's 'Smarter Investing' which I bought and read before deciding on the following passive portfolio:

I'll go and look for that. And will take a look at your choices.

Good luck with your selections - much obliged.

[spiderbill]

For Europe I use Vanguard Developed Europe ex-UK VERX - like you I have a HYP of UK listed shares so didn't want to replicate too much.
For Asia VAPX which is exJapan, I hold VJPN for that and for the USA VUSA which is a S&P 500 tracker rather than other slices of the US market.
However if you already have VWRL you might well end up doubling up.

VWRL is only a smallish (under 2K) investment so far so I have plenty of wriggle room before making any substantial investments that might clash. I'll have a look at these and their constituents before proceeding further.

much obliged

[Lootman]

I have never heard of Amundi.

I prefer to stick to only the "big three" of ETF providers - Vanguard, iShares (Blackrock) and SPDR's (State Street). Between them they have every market covered and usually the lowest prices. With ETF's being almost a commodity these days, there isn't so much difference between them, but I feel more comfortable with the big guys.

[spiderbill]

I have never heard of Amundi.
I prefer to stick to only the "big three" of ETF providers - Vanguard, iShares (Blackrock) and SPDR's (State Street). Between them they have every market covered and usually the lowest prices. With ETF's being almost a commodity these days, there isn't so much difference between them, but I feel more comfortable with the big guys.

I'll keep that in mind, thanks.

[TimR]

VWRL is only a smallish (under 2K) investment so far so I have plenty of wriggle room before making any substantial investments that might clash. I'll have a look at these and their constituents before proceeding further.

VWRL covers the whole world and rebalanced with only one lot of trading fees. I would have thought a substantial amount would need to be invested in each ETF to justify the additional trading costs of splitting an All World ETF such as VWRL into separate constituents.

TimR

[genou]

VWRL is only a smallish (under 2K) investment so far so I have plenty of wriggle room before making any substantial investments that might clash. I'll have a look at these and their constituents before proceeding further.

VWRL covers the whole world and rebalanced with only one lot of trading fees. I would have thought a substantial amount would need to be invested in each ETF to justify the additional trading costs of splitting an All World ETF such as VWRL into separate constituents.

TimR

I agree with the general point. I prefer, however, to hold VEVE (Vanguard FTSE Developed World ) / VFEM (Vanguard FTSE Emerging Markets) rather than VWRL. I pay 18bps for VEVE ( 90% of the investment ) and 25bps for VFEM ( 10% of the money ) . VWRL holds developed / emerging at 90/10, but charges 25 bps on 100% of the investment.

In some circumstances I'll hold SWDA ( iShares Core MSCI World ) , which charges 20bps, but is an accumulator.

[Plutus]

Hello spiderbill.

Before you choose ETFs I think that you should have an idea of what you want to achieve from the passive portfolio and then make the appropriate choice of ETF.

Note down an overall target allocation per asset class or geographical region.

Your passive portfolio may indeed be created using a single world equity tracker such as VWRL.

Take a look at the monevator website for sample portfolios.

[spiderbill]

Hello spiderbill.

Before you choose ETFs I think that you should have an idea of what you want to achieve from the passive portfolio and then make the appropriate choice of ETF.

Note down an overall target allocation per asset class or geographical region.

Your passive portfolio may indeed be created using a single world equity tracker such as VWRL.

Take a look at the monevator website for sample portfolios.

I'll do that, thanks Plutus. Hadn't quite thought of it in that way.

[Hariseldon58]

I'd second using iShares, Vanguard and State Street. Lots of good reasons to stick with the big boys.

The starting point is VWRL which is the world , it effectively consists of a US tracker, a Canadian Track, a Europe Tracker, a Japan tracker.....including an Emerging Market tracker. You could stop at just this one.

Perhaps a mix of Vanguard Developed World VEEV and Emerging VFEM instead, its cheaper.
A starting point is a mix of 9:1, if you want underweight/overweight Emerging then adjust the balance.

If you want to overweight a region you buy just that region in the additional quantity but be careful, buying Europe is popular now, it's probably not going to turn out great, if you want to overweight buy the most hated region.

I'd pick Global Value VVAL and forget about WOSC, it's cheaper and if you look at the portfolio facts you'll find it overweight in smaller companies and has over 1000 holdings from a universe of 5000 or so.

Keep it simple,

[spiderbill]

Thanks for those suggestions Hariseldon, I'll follow them up.

"Keep it simple" is probably good advice - I suspect I'm looking for complexity where I should be looking for simplicity.