Great forum guys, fantastic resource and you guys are just tremendously helpful. So, my question: As a large, but passive ETF portfolio, is this too complicated?
I tried to do something fairly broad and balanced but it seems easy to get carried away with maybe too much stuff.. One problem I have is that I cannot do US traded ETFs. Why? I live in the UAE and have a 30% DWT on US traded securities, even if the underlying issues in an ETF are foreign. So I have resorted to Irish domiciled LSE traded ETFs, mostly denominated in USD. TERs are a bit higher but not enough to justify paying 30% dividend withholding. We have no income taxes in the UAE.
My original intention was to have something like this:
13% - Total US
13% - Total World ex-US
13% - US small cap
13% - World ex-US small cap
13% - Emerging markets
13% - World REITs
7% - Bonds - US Agg, US Corporates, WIP, Emerging market bonds (roughly equal mix)
5% - Developed Europe on a speculative basis because I feel it's undervalued right now
And I did the best I could with what was available in LSE.. but without adding even more complication, this is the best I could do from what I saw available. For example, for world ex-US small cap, all they have available is emerging markets small cap, and then region specific developed small cap.. so I could buy Asia ex-JP, JP, EUR as separate issues, but not all as one ETF.
Developed Market Cap Weighted - 38%
22% -- VWRD - Vanguard World FTSE ETF
11% -- VUSD - Vanguard S&P 500 ETF
5% -- VEUR - Vanguard Developed Europe
Small Cap - 26%
13% -- CSUSS - iShares US Small Cap
7% -- EMSD - SPDR Small Cap Emerging Markets
Emerging Equities - 26%
6.2% -- VDEM - Vanguard Emerging Markets ETF (VDEM and IEMA are basically the same, but IEMA reinvests the dividends)
6.2% -- IEMA - iShares Emering Markets
6.2% -- EDVD - SPDR Emerging Markets Dividend ETF
1.4% -- IGCC - GCC ex Saudi Arabia (just because we live here)
Bonds - 7%
1.4% - USAG - SPDR US Aggregate Bond ETF
2.1% - EMDD - SPDR Emerging Market Bond ETF
1.4% - IGIL - World Inflation Protected
2.1% - LQDE - iShares $ Corporate Bond UCITS
REIT - 15%
15% - GLRE - SPDR DJ Global Real Estate ETF
Also, it is an 8 figure portfolio. I did the math on the TERs and it comes out to quite a lot of money annually (circa $50k/yr in fees at present value). From what I have read, financial advisers say its better to do individual shares once a portfolio gets over a certain size and you can get a decent representation of an index from owning a few hundred stocks within it, and transaction costs are a lot cheaper than $50k/yr in mgmt fees from the ETFs. Thoughts on this??
Finally, most people will say I'm low on bonds. I know the arguments for and against this and have decided that bonds aren't necessary at this stage.
Thanks a lot for the feedback guys!!