Brokerage is covered in their fee though. VGS (MSCI World ex-Australia) - 50%. Perhaps you should consider Vanguard US Total Market Shares Index ETF (ASX: VTS). Is the 0.21% management fee a factor in favouring VGS with its 0.18% fee, even if VGS is un-hedged (to my knowledge). We asked Morningstar associate director, manager research and ETF expert Alexander Prineas for his thoughts. Therefore the expense consideration may likely be cut with demand. iShares S&P 500 ETF (IVV) and Vanguard US Total Market Shares Index ETF (VTS) are almost indistinguishable. Currently, I’m holding a 100% cash account.
I really need to come back to that web app and publish it.
I understand that you buy an approx $5k ETF monthly. Find out how you can access what could be the NEXT Afterpay today! I’m considering Wholesale Vanguard High Growth Index Fund at MER of 0.29% which is the same as VDHG as opposed to VAS 20%/LIC 20%/VTS 35%/VEU25% with a weighted MER of 0.1055% as the former is essentially set and forget. Vanguard International Small Companies Index Fund (Wholesale) But why not model in the trading costs? The HIGH GROWTH diversified fund invests in 9 funds. Yes pretty sure inclusive of mer? http://passiveinvestingaustralia.com/vdhg-or-roll-your-own. No doubt about it.
There really isn’t a magical product that suits everyone so it’s impossible to say what works best for someone without know the complete picture. Just wanna say the radio interview was great. The MER gets taken out of the investment before it ever gets to you. Hi Mr FB I just wanted to highlight that with a largish portfolio, over a long enough period of time the difference between MER’s adds up! They are both very low fees, but I plan to have a portfolio of a million+ within the next 5 years and hope to live for another 50 years at least! "The difficulty faced by active fund managers in beating the index raises the attractiveness of an efficient and low-cost passive vehicle.".
The only difference would be the management fees. In the end I’m not sure its an Apples V Apples comparison. 2) Would you change your asset allocation to more conservation funds i.e. I have the discipline to put the $500 away and not spend it so that’s why I was keen on an ETF. Do you top up whichever fund is lacking the most with the same amount of $$ no matter what the funds allocation is? But correct me if I’m wrong, I think the VAS + VTS + VEU combo would be worse off because of the 3x brokerage fee? The Betashares ETHI is new on the block & I was tempted to purchase that. Low management fees (0.101% assuming the above weightings)”, How do you arrive at 0.101% ? This is one key area where the two ETFs differ. What do you think about an alternstive strategy to option 2 of 60% oz shares and 40% international? Using my allocations as an example, if VGS were the fund that was down the most I invest $6000 in it making it higher than the target allocation. Compared to diversefied 0.27%, robo 1% active management 1.5-2+%. I just want to clarify your above MER examples.
(0.4*0.0014)+(0.3*0.0011)+(0.3*0.0004) = 0.00101 = 0.101%. Your note on the higher cost of VDHG scares me a bit. Only been investing for about 3 months now, following the barefoot investors breakfree setup, which has ratios in STW, IOO, VAF, VSO and VAP but definetly was looking at the VDHG option. I would be interested to hear the thoughts from more experienced investors (including the different taxation implications). One thing to note also: VDHG also gives you international small companies index. You mentioned high fees on VAS + VGS portfolio of 0.16 which isn’t high at all. Any reason why IVV isn’t on here? Have a read of this https://www.investopedia.com/terms/r/rebalancing.asp, “40% Oz shares (VAS or AFI) 60% international (VTS+VEU) About to start my FI journey but just a couple of questions from a newie. I started investing in index funds a few years ago.
Your email address will not be published. It’s a great question and one to be aware of. If I change the management fees to be 0.27% we get the following. Our Top 5 Stocks for Investors 50 or Older – NOW AVAILABLE!
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But this is part of how VTS achieves its scale and low cost, he says. This strategy ensures that the number of
4) Distributions can be re-invested
My 3 questions are; do you invest via a brokerage (such as my current Nabtrade account), or do you invest in your ETFs via Vanguard directly by setting up an account with them directly?. Also trying to find the best (possible) choice since the beginning so I would not have too many accounts in the future (Vanguard, Selfwelath, Commsec..). IVV tracks the S&P 500, a free-float, market-cap-weighted benchmark that is composed of the largest 500 US companies and represents about 80 per cent of the market cap of all US equities. Hi did you end up purchasing VDHG or VDGR? Our latest articles and strategies for the post-work life you want.
Each company boasts strong growth prospects over the next 3 to 5 years, and most importantly each pays a generous (and fully franked) dividend! I do a bit of Uber driving and had a guy in the car who worked for the investment arm of a bank. Given that I’m thinking of investing larger amounts every few months soon, I am considering getting ETFs instead given the lower MER. But even if I did buy in my own name, I don’t really care if my kids have to pay uncle Sam some extra tax if they would be so fortunate to inherit anything from me in the first place!
The thing that keeps me coming back to VAS are those juicy franking credits and VEU to get whole world exposure at a low MER (compared to VGS). Highest management fees (0.164% assuming the above weightings) out of all the three options (more on this later). My web app (coming soon) calculates this for you and graphs it. Thanks for the helpful advice FB.
Similarly any new money going into the trust via a creation basket could be put directly into any underweight allocation rather than shared out on the generic 90/10 split? What do you mean by “have to manually rebalance” ? Diversification – Exposure to over 10,000 securities—in just one ETF. PRODUCT COMPARISON. This last comment do you mean you’d change everything to the new betashares A200 ETF with their 0.07% management fee? I have updated the article to reflect this. This is where these diversified Index ETFs dominate. All you need to do is buy and hold this ETF. Tristan Harrison | August 8, 2018 4:05pm | More on: ANZ CBA NAB VAS VGS VTS WBC. I have never invested in index funds or ETFs before, so there may be other issues that I am not aware of. Get Started Investing You just keep track of your portfolio and when you need to buy, buy the portion of the portfolio that is the lowest in terms of percentage of where your weightings should be. I’m able to invest roughly $6000 per year at this stage so to kick things off I was going to buy $6000 of VGS now, then 8 months later $4000 of VAS.
I doubt it will get through. Authorised by Scott Phillips. It’s a decent split I think. For a limited time, The Motley Fool Australia is giving away an urgent new investment report outlining our 5 favourite stocks for investors over 50. As I’m not an Aussie local, any chance you can point me to any articles on Franking? I have essentially been charged a 0.19% buying fee. But considering the bear-ish outlook on the market, I also don’t want to invest a huge amount right now.
Would you guys sell the index funds to get the ETFs in that case? Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. It’s a bigger currency and historically the dollar (AUD) has been lower than what it’s currently at right now. I’ve done some reading up on it and there are strong arguments for each case (https://forums.whirlpool.net.au/archive/2634114 for example). Just can’t do it automatically. And the debate needn’t be an either/or question. I reinvest them of course!
Follow-up question, do you take advantage of AFI’s DSSP to avoid paying income tax on dividends? That’s why Robo investment companies like Acorns and Stockspot are in business. For people without property investment though I agree it would probably make sense to have something here, I did use SLF myself but sold that when I was buying a house, I’m sure there are other good ETFs for property exposure.
There is a market like this in just about everything. Not only is this significantly below any active fund, but it makes them the cheapest ETFs in the Australian market. im in the lazy investor camp, not that im not into putting in the effort but i have other main focus, i just see this a good place to park my sleeping money w/o much administration and yes i can take that lesser profit for the time saved. And put me down for number 3 – the dividend approach . https://www.aussiefirebug.com/pay-less-tax-part-1-buying-assets-in-a-trust/.
I’m not an accountant but I don’t think there’s anything else that needs to be filled our other than the W-8BEN form…. and have a really high risk profile then you could presumably just go with a pure equities portfolio. We buy as soon as we have reached $5k in savings. The Stockspot annual ETF report has all the MERs on the ETFs in the Oz market. For my goals and strategy, I’d dump it all into A200.
and when you say re balancing do you mean you just need to look at how much % each of the different ETFS has? Compare investments from Vanguard and other fund families. If it gets me investing and is better than most scenarios, I’m in. Good spot Chris. It really comes down to how often you purchase and at what amounts. Does anyone know how the diversified ETF s I’m willing to rebalance and fill out a form every few years to get the lower MER option and potentially over $200K (in today’s dollars) extra over 50 years. Hi AFB, your calculation of a 0.101% fee would mean you would be paying Vanguard $1010 per year, not $505 as stated in your graphs. I have $8k per month to buy into a fund and don’t want to go into paralysis by analysis, especially when the market is volatile or ‘high’.
A complete n00b could buy one of the four diversified ETFs (depending on their investor profile) for the rest of their life and get respectable returns with minimal effort. is an editor for Morningstar.com.au.