Two new Ireland domiciled ETFs from I-shares that I will probably use in our portfolio at rebalance time in January. AGGG (ER = 0.10%) and WSML (ER = 0.35%).
AGGG is the Barklay Global Bond Index. We used to use SUAG: (Barklay USA Bond Index) with a ER = 0.25. We now use two Ireland Vanguard bond ETFs (VDTY: US Treasuries and VDCP: Global USD corporate bonds) which have an ER = 0.12%. I'll subsitute AGGG for the VDTY/VDCP combo. Cheaper. Simpler. Globally diversified. At some point about 6% of AGGG will be mainland Chinese bonds. I like that.
WSML is the first real good global small cap ETF that I've been waiting for. I will sell 1/3'd of our VWRD (FTSE all world equity) and replace it with WSML next year.
Any thoughts or opionions?
New ETFs for USA-NRA Investors [Non-Resident Alien]
Re: New ETFs for USA-NRA Investors
Hi,
Just one question, why not use AGGU (USD hedged & accumulating) vs AGGG which is distributing without hedging?
https://www.ishares.com/uk/individual/e ... s-etf-fund
Regards,
Jeremy
Just one question, why not use AGGU (USD hedged & accumulating) vs AGGG which is distributing without hedging?
https://www.ishares.com/uk/individual/e ... s-etf-fund
Regards,
Jeremy
Re: New ETFs for USA-NRA Investors
I agree, you should hedge your bonds into your expense currency, if possible. The purpose of bonds in a portfolio is to provide stability, and avoiding currency volatility in this part of portfolio is advised.
If you sell 1/3 of VWRL to replace it with WSML, you are severely overweighting small caps. FTSE All-World index factsheet states this index covers 90-95% of investable market cap (in other part of factsheet even mentions 98%), so it leaves just 5-10% for small caps.
Also, if you want to be exact, WSML only covers developed markets small cap, where VWRL includes emerging markets, so you'd be missing emerging markets small caps. And even in the developed markets part, since you are using different index providers, there might be a gap or overlap between mid and small caps part of your portfolio. See more: https://www.bogleheads.org/wiki/Stock_m ... _providers
If you sell 1/3 of VWRL to replace it with WSML, you are severely overweighting small caps. FTSE All-World index factsheet states this index covers 90-95% of investable market cap (in other part of factsheet even mentions 98%), so it leaves just 5-10% for small caps.
Also, if you want to be exact, WSML only covers developed markets small cap, where VWRL includes emerging markets, so you'd be missing emerging markets small caps. And even in the developed markets part, since you are using different index providers, there might be a gap or overlap between mid and small caps part of your portfolio. See more: https://www.bogleheads.org/wiki/Stock_m ... _providers
Re: New ETFs for USA-NRA Investors
Regarding the equity part I don't mind tilting toward small caps. There is some overlap with midcaps. I like midcaps.
I've been waiting a few years for either Ireland Vanguard or iShares to come up with a reasonable small cap ETF. WSML is reasonable enough. If a better ETF comes along I'll just sell WSML and buy it.
Fixed income frustrates me the most. As a USA-NRA living near the USA, I did not even consider using another currency other than the USD.
Now I believe the world is moving towards a "basket of currencies". So the reason I'd go for non-hedged AGGG is because I want to diversify out of the USD somewhat. Also AGGG will soon hold about 6% in Chinese bonds which will increase over time. I like that too.
What I don't like is AGGG's YTM = 2.0% while SUAG's YTM = 3.5%. If we subtract the ERs (0.10% and 0.25%) then AGGG's goes to 1.9% and SUAG's goes to 3.3%.
I've been waiting a few years for either Ireland Vanguard or iShares to come up with a reasonable small cap ETF. WSML is reasonable enough. If a better ETF comes along I'll just sell WSML and buy it.
Fixed income frustrates me the most. As a USA-NRA living near the USA, I did not even consider using another currency other than the USD.
Now I believe the world is moving towards a "basket of currencies". So the reason I'd go for non-hedged AGGG is because I want to diversify out of the USD somewhat. Also AGGG will soon hold about 6% in Chinese bonds which will increase over time. I like that too.
What I don't like is AGGG's YTM = 2.0% while SUAG's YTM = 3.5%. If we subtract the ERs (0.10% and 0.25%) then AGGG's goes to 1.9% and SUAG's goes to 3.3%.
KISS & STC.
Re: New ETFs for USA-NRA Investors
Lol I totally read this as
NRA sponsored investments.
NRA sponsored investments.
Re: New ETFs for USA-NRA Investors
It's pretty funny. We non-USA person investors describe ourselves relative to our status in the USA. Citizen. Ex-pat. Resident alien. Non-resident alien. I should use "non-USA person". Less confusion perhaps?
KISS & STC.
Re: New ETFs for USA-NRA Investors [Non-Resident Alien]
ElJefe302, Welcome! I retitled the thread to help with the acronym.
We've already changed the wiki. See: Non-US domiciles
How does your home country's tax law describe someone living outside its borders? Is "ex-patriot" a common term?
We've already changed the wiki. See: Non-US domiciles
Re: New ETFs for USA-NRA Investors [Non-Resident Alien]
In Costa Rica and Panama people are taxed on a territorial basis. Not on the basis of citizenship or legal residency.
I'm far from an expert on these matters. I learned the term "ex-pat" from English speakers. It seems to come from citizens and residents of the USA and the UK countries.
I'm far from an expert on these matters. I learned the term "ex-pat" from English speakers. It seems to come from citizens and residents of the USA and the UK countries.
KISS & STC.