New Investor [ETF suggestions for Canadian expat]

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Topic Author
Wad
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New Investor [ETF suggestions for Canadian expat]

Post by Wad » Wed May 22, 2019 6:57 pm

I am a Canadian expatriate, living in South Korea, and planning to retire to the Philippines in the next 2-3 years. So I’m looking to invest in some ETFs to help supplement my retirement pension. I'm having problem finding an ETF portfolio that will work for my situation. I am 62 years old so I imagine my portfolio should be somewhat conservative. A portfolio I can draw down over the next 20-25 years. I have roughly $250,000 USD to invest at the moment.

Any constructive advice would be appreciated. Thank you!

DJN
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Re: New Investor

Post by DJN » Wed May 22, 2019 10:23 pm

Hi,
I am not Canadian but there is a great resource which could be helpful: https://www.finiki.org/wiki/Main_Page
good luck,
DJN
Yah shure

TedSwippet
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Re: New Investor

Post by TedSwippet » Thu May 23, 2019 3:17 am

Welcome.
Wad wrote:
Wed May 22, 2019 6:57 pm
I am a Canadian expatriate, living in South Korea, and planning to retire to the Philippines in the next 2-3 years. ...
You can probably use something based on this sample portfolio. It's primarily aimed at EU investors, but should work equally well for anybody who needs to avoid holding the usual US domiciled ETFs discussed by US investors elsewhere on this site.

EU investing - Bogleheads

For a list of reason why you want to avoid the usual US domiciled ETFs, see these wiki pages. The Philippines has a below-average US income tax treaty, and no US estate tax treaty whatsoever. South Korea has an average US income tax treaty, and again no US estate tax treaty whatsoever. Canada has good US treaties, but unless you are a Canadian resident these don't help you.

Nonresident alien taxation - Bogleheads
Nonresident alien with no US tax treaty & Irish ETFs - Bogleheads
Last edited by TedSwippet on Thu May 23, 2019 5:59 am, edited 1 time in total.

Valuethinker
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Re: New Investor

Post by Valuethinker » Thu May 23, 2019 5:54 am

Wad wrote:
Wed May 22, 2019 6:57 pm
I am a Canadian expatriate, living in South Korea, and planning to retire to the Philippines in the next 2-3 years. So I’m looking to invest in some ETFs to help supplement my retirement pension. I'm having problem finding an ETF portfolio that will work for my situation. I am 62 years old so I imagine my portfolio should be somewhat conservative. A portfolio I can draw down over the next 20-25 years. I have roughly $250,000 USD to invest at the moment.

Any constructive advice would be appreciated. Thank you!
50% bond ETF (global government bonds, hedged into USD, most likely; or a mix of corporate Investment Grade + Government bonds)
50% global equity ETF

If we know which market you will be buying on ( e.g. Toronto? US?) then we can get more specific which funds/ ETFs.

I can construct the above with TSX (Toronto) listed ETFs. It really all depends on your tax position.

There's a question of what is your "home" currency is, also how much income are you looking to draw from this?

My guess on home currency is USD. Philippines currency is probably most connected to USD, and USD is a safe choice in case Philippines currency tanks (of course it could go the other way, that's harder to hedge).

If you are looking to draw more income, then we can substitute a dividend ETF for some of the equity.

At some point you may wish to buy an annuity - but that's probably a decision for a future time (age 70 or later).

Topic Author
Wad
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Re: New Investor

Post by Wad » Thu May 23, 2019 6:38 am

wow...what a helpful forum...thank you! I am not planning to repatriate to Canada so I don't see myself trading on the TSX. I was looking at the model EU portfolios as a guideline. So possibly the LSE. I'm interested in some of the Irish ETFs as I heard they are tax friendly. Additionally all my funds are in USD and KRW. I will have a Teacher's pension and some CPP/OAS. So I figure a modest 3%-4% draw down a month. The Philippines is not really an expensive country to live. I've been reading like crazy the last month and have a basic understanding of ETFs. I just don't know what is the best portfolio considering my age, citizenship, and geographic location.

Do you think 50% Bonds is a good percentage? I keep reading "100 minus your age" for fixed asset allocation?

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Maple
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Re: New Investor

Post by Maple » Thu May 23, 2019 5:39 pm

Wad wrote:
Thu May 23, 2019 6:38 am

So I figure a modest 3%-4% draw down a month ... I just don't know what is the best portfolio considering my age, citizenship, and geographic location.

Do you think 50% Bonds is a good percentage? I keep reading "100 minus your age" for fixed asset allocation?
Hello Wad,

Welcome to the forum. :wink:

You wrote "3%-4% draw down a month"; perhaps your intention is instead per year?

The fixed asset % allocation rule of thumb is generally "your age". Such that, you invest more in safe bonds as you age. Many are a bit more aggressive and allocate "age -10%" in high quality credit bonds. The remainder would be in equities, that is the general concept.

Topic Author
Wad
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Re: New Investor

Post by Wad » Thu May 23, 2019 11:22 pm

Thanks for the welcome!

Right...got it backwards. 100 subtract your age for equities. But that would be 60% fixed assets /40% equities. Is that just too conservative? Would 50/50 be a more realistic ratio?

Yup...3-4% draw down per year. :)

Valuethinker
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Re: New Investor

Post by Valuethinker » Fri May 24, 2019 4:33 am

US Treasury bond fund pays 2.5%

So 60% on 2.5% is 1.5%.

Stocks pay maybe 3% dividend. So another 40%x3.0%= 1.2%

That would give you 2.7% income from the portfolio. You would be drawing down capital. Inflation of course would be eating away the real value of your savings -- but since you need to draw down, there's not much you can do about that.

I picked 50% bonds 50% equity because it is a pretty easy to remember and implement rebalancing.

Will look to see which are right ETFs, Irish listed.

Topic Author
Wad
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Re: New Investor

Post by Wad » Fri May 24, 2019 6:57 am

Thanks for all your help! So 50/50 split might be better? Am I being too cautious with 60% Bonds/40% Equities?

Topic Author
Wad
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Re: New Investor [ETF suggestions for Canadian expat]

Post by Wad » Fri May 24, 2019 7:24 pm

iShares Core MSCI World ETF (global stocks) IWDA 40%
iShares Core MSCI EM IMI UCITS EIMI 5%
iShares Global Inflation Linked Gov’t Bond ETF (global bonds) IGIL 55%

All Irish Domiciled and traded on LSE.

Suggestions?

andrew99999
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Re: New Investor [ETF suggestions for Canadian expat]

Post by andrew99999 » Fri May 24, 2019 9:37 pm

Wad wrote:
Fri May 24, 2019 7:24 pm
iShares Core MSCI World ETF (global stocks) IWDA 40%
iShares Core MSCI EM IMI UCITS EIMI 5%
iShares Global Inflation Linked Gov’t Bond ETF (global bonds) IGIL 55%

All Irish Domiciled and traded on LSE.

Suggestions?
If you're in draw down phase and no need for accumulation funds, any reason not to switch IWDA/EIMI for VWRL which is the same thing but in one fund?
PassiveInvestingAustralia.com

Topic Author
Wad
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Re: New Investor [ETF suggestions for Canadian expat]

Post by Wad » Fri May 24, 2019 10:55 pm

Thanks andrew99999...it certainly would make things simpler with only 2 ETFs! I thought accumulation portfolios were a better idea than distributing portfolios even in retirement, the power of compound interest. But that's why I'm asking here. Lot's of good advice for a laymen such as myself.

Topic Author
Wad
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Re: New Investor [ETF suggestions for Canadian expat]

Post by Wad » Sun May 26, 2019 7:39 am

Updated:

iShares Core MSCI World ETF (global stocks) IWDA 45%
iShares Core MSCI EM IMI UCITS EIMI 5%
iShares Global Inflation Linked Gov’t Bond ETF (global bonds) IGIL 35%
Cash and fixed term deposits 15%

All Irish Domiciled and traded on LSE.

Comments? Does this look like a reasonable portfolio for retirement?
Last edited by Wad on Sun May 26, 2019 8:57 am, edited 1 time in total.

TedSwippet
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Re: New Investor [ETF suggestions for Canadian expat]

Post by TedSwippet » Sun May 26, 2019 8:43 am

Wad wrote:
Fri May 24, 2019 10:55 pm
I thought accumulation portfolios were a better idea than distributing portfolios even in retirement, the power of compound interest.
It looks to me like you are weighing up a comparison of accumulating funds or ETFs and distributing ones?

If yes, there's actually no real(*) difference in terms of compounding. An accumulating ETF will automatically reinvest dividends for you internally within the ETF, so that its NAV does not drop regularly on ex-dividend dates, which is what happens with distributing ETFs. However, you could always just reinvest the dividends yourself, either manually or through any broker-provided dividend reinvestment plan or feature, and the results would be the same either way.

More in this recent wiki article:
Comparison of accumulating ETFs and distributing ETFs - Bogleheads

(*) There will be tiny differences, caused by inability to hold fractional ETF units, possible delays in reinvesting due to latency between the ex-dividend date and the dividend payment (and reinvestment) dates, and any explicit costs to reinvesting dividends from distributing ETFs. However, in the absence of these effects, accumulating and distributing ETFs will produce identical outcomes. There might be local tax treatment differences that could lead you to favour one type over another, and allowing you to extract more value from the compounding.

Topic Author
Wad
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Re: New Investor [ETF suggestions for Canadian expat]

Post by Wad » Thu May 30, 2019 4:24 am

But why would you let a fund determine how much you can spend in retirement when you can create your own distributions to spend the amount that you know to be sustainable?

Valuethinker
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Re: New Investor [ETF suggestions for Canadian expat]

Post by Valuethinker » Thu May 30, 2019 7:27 am

Wad wrote:
Sun May 26, 2019 7:39 am
Updated:

iShares Core MSCI World ETF (global stocks) IWDA 45%
Fine.
iShares Core MSCI EM IMI UCITS EIMI 5%
You do not need this. You will be living in an EM. This increases your exposure to EM when you already have a lifestyle risk in EM.

More balanced argument - 5% will not make much difference to your final performance. Adds to complexity for rebalancing.
iShares Global Inflation Linked Gov’t Bond ETF (global bonds) IGIL 35%
Cash and fixed term deposits 15%
Re deposits as long as they are in insured bank accounts. For example in the Eurozone that is 100k limit but it is picked up by the sovereign government. So, if I were Italian, I'd diversify into non-Italian banks. If I was German or French, I would not worry.

What you want to avoid is the situation where your bank is in trouble as part of a broader crisis which affects the currency & govt of where you live. For this reason, many in EM only patriate the money they need (aiming to minimize FX exchange costs) and keep the rest of their money offshore in safe accounts & investments.

In truth, inflation linked bonds is probably not what you need. There's a long theoretical argument about this (raised by David Swensen in his excellent book (now in 2nd edition) on personal investing -- note he also wrote one about endowment investing, which is excellent but a hard read).

Basically you would be hedging against inflation you would not personally experience.

I would definitely hold c. 25% in a global government bond index fund - probably USD hedged (generally they are hedged, so I am trying to find a currency which the Philippine currency tracks the most). The fund should give you a yield around 2.5%, which is the US Treasury bond average yield (around that).

The balance you can split between cash and inflation-indexed bonds (a US TIPS fund would also do).

All Irish Domiciled and traded on LSE.

Comments? Does this look like a reasonable portfolio for retirement?
It all depends on your risk tolerance. But in principle, yes. You need to decide what your withdrawal strategy is - how much a year you need to withdraw to maintain a standard of living. You will also have eligibility (perhaps) for the Korean state pension? And if you worked at all in Canada (even in your teens/ 20s) you will have CPP/ QPP owed to you.

Valuethinker
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Re: New Investor [ETF suggestions for Canadian expat]

Post by Valuethinker » Thu May 30, 2019 7:31 am

Wad wrote:
Thu May 30, 2019 4:24 am
But why would you let a fund determine how much you can spend in retirement when you can create your own distributions to spend the amount that you know to be sustainable?
That is not what he is suggesting?

WIth an accumulating fund you just sell units when you need to realize cash from the portfolio.

With a distributing fund it will pay dividends of interest, dividends + capital gains from the underlying investments at various points. You can then spend those distributions, but you may also need to sell additional units to reach your target withdrawal level.

Topic Author
Wad
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Re: New Investor [ETF suggestions for Canadian expat]

Post by Wad » Thu May 30, 2019 7:44 am

Thanks Valuethinker!

So would this make for a better portfolio?

FTSE All-World UCITS ETF (USD) Distributing VWRD 45%
iShares Core Global Aggregate Bond UCITS ETF AGGG 45%
Cash and fixed term deposits 10%

Or should I just stick with IWADA over VWRD?

Regards!

P.S. Yes I will receive a pension from the Korean teacher's pension plan and some OAS/CPP. I will put the money into a bank on the Isle of Man.

Topic Author
Wad
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Re: New Investor [ETF suggestions for Canadian expat]

Post by Wad » Fri May 31, 2019 7:36 pm

Still trying, possibly somebody will chime in..hopefully :)

45% FTSE All-World UCITS ETF (VWRD)
25% USD Treasury Bond UCITS ETF (VDTY)
20% USD Corporate Bond UCITS ETF (VDCP)
10% Cash and fixed term deposits

Reading like mad, hoping to sort this out. Any recommendations on books too? Just finished reading "The little book of common sense investing" but it was way over my head.

Regards!

Wad

andrew99999
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Re: New Investor [ETF suggestions for Canadian expat]

Post by andrew99999 » Fri May 31, 2019 8:58 pm

Wad wrote:
Fri May 31, 2019 7:36 pm
Reading like mad, hoping to sort this out. Any recommendations on books too? Just finished reading "The little book of common sense investing" but it was way over my head.
I found this helpful.
It is from someone on this board (apologies to the author, I don't recall who)
https://investingroadmap.wordpress.com/

I can't comment much on the portfolio of a 62 year old (I'm a ways off), but it look ok to me. Main concerns is possibly too much corporate bonds? For me, the purpose of bonds is security, and risk should be taken on the equity side, not on the fixed income side. Just a thought though, others would be more knowledgeable than me.
PassiveInvestingAustralia.com

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Re: New Investor [ETF suggestions for Canadian expat]

Post by LadyGeek » Fri May 31, 2019 9:18 pm

^^^ Your link to Road Map for Investing Success is by forum member pkcrafter.

Additional books: Books: recommendations and reviews

For Canadians: Recommended reading - finiki, the Canadian financial wiki

Wad - The best advice comes from your home country. May I recommend you post your question in our sister Canadian forum: Financial Wisdom Forum? You'll get expert advice, especially on how to manage your Canada Pension Plan and Old Age Security as a Canadian ex-pat.

Also: Cross-border and expatriate issues - finiki, the Canadian financial wiki, which is focused on the US, but can apply to other countries. You'll want to understand cross-border tax treaties between Canada and South Korea.

Disclaimer: I'm a member of both forums.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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Re: New Investor [ETF suggestions for Canadian expat]

Post by Valuethinker » Sat Jun 01, 2019 5:02 pm

Wad wrote:
Fri May 31, 2019 7:36 pm
Still trying, possibly somebody will chime in..hopefully :)

45% FTSE All-World UCITS ETF (VWRD)
25% USD Treasury Bond UCITS ETF (VDTY)
20% USD Corporate Bond UCITS ETF (VDCP)
10% Cash and fixed term deposits

Reading like mad, hoping to sort this out. Any recommendations on books too? Just finished reading "The little book of common sense investing" but it was way over my head.

Regards!

Wad
I would not hold corporate bonds.

A bear market in stocks Will also hit corporate bonds.

If we had another Lehmans style crisis then the divergence between corporate bonds and US Treasuries would be extreme.

A global government bond fund hedged into USD would be even better.

I don't have a problem w your overall split of assets which seems reasonable.

The only possible change works be to be 25% US Treadury bonds and 20% US TIPS which would give you a lower current yield but greater inflation protection.

Unfortunately US Treasury yields have fallen in last few months.

Topic Author
Wad
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Re: New Investor [ETF suggestions for Canadian expat]

Post by Wad » Sat Jun 01, 2019 6:21 pm

Valuethinker wrote:
Sat Jun 01, 2019 5:02 pm

I would not hold corporate bonds.

A bear market in stocks Will also hit corporate bonds.

If we had another Lehmans style crisis then the divergence between corporate bonds and US Treasuries would be extreme.

A global government bond fund hedged into USD would be even better.

I don't have a problem w your overall split of assets which seems reasonable.

The only possible change works be to be 25% US Treadury bonds and 20% US TIPS which would give you a lower current yield but greater inflation protection.

Unfortunately US Treasury yields have fallen in last few months.
Thanks...every bit helps. Difficult journey for me!

It would be nice, if at all possible, to keep this portfolio as simple as possible.

So which of the two would be better A: or B:?

A:
40% FTSE All-World UCITS ETF (VWRD) (0.25)
50% iShares Core Global Aggregate Bond UCITS ETF (AGGU) (0.10)
10% Cash and fixed term deposits

Are there any issues with mixing accumulating (AGGU) and distributing (VWRD) funds that i should be aware of?

or

B:
40% FTSE All-World UCITS ETF (VWRD)
30% USD Treasury Bond UCITS ETF (VDTY)
20% SPDR® Bloomberg Barclays U.S. TIPS UCITS ETF (TIPS)
10% Cash and fixed term deposits

Overall a little more conservative than previously listed. But I've been reading some of the great links people have posted and figure my aversion to loss may be greater than I anticipate.

Regards!
Last edited by Wad on Sun Jun 02, 2019 8:39 pm, edited 7 times in total.

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Re: New Investor [ETF suggestions for Canadian expat]

Post by LadyGeek » Sun Jun 02, 2019 10:30 am

FYI - The OP has posted in the Canadian forum: ETF recommendations for expat Canadian
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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Re: New Investor [ETF suggestions for Canadian expat]

Post by Valuethinker » Mon Jun 03, 2019 2:51 am

Wad wrote:
Sat Jun 01, 2019 6:21 pm
Valuethinker wrote:
Sat Jun 01, 2019 5:02 pm

I would not hold corporate bonds.

A bear market in stocks Will also hit corporate bonds.

If we had another Lehmans style crisis then the divergence between corporate bonds and US Treasuries would be extreme.

A global government bond fund hedged into USD would be even better.

I don't have a problem w your overall split of assets which seems reasonable.

The only possible change works be to be 25% US Treadury bonds and 20% US TIPS which would give you a lower current yield but greater inflation protection.

Unfortunately US Treasury yields have fallen in last few months.
Thanks...every bit helps. Difficult journey for me!

It would be nice, if at all possible, to keep this portfolio as simple as possible.

So which of the two would be better A: or B:?

A:
40% FTSE All-World UCITS ETF (VWRD) (0.25)
50% iShares Core Global Aggregate Bond UCITS ETF (AGGU) (0.10)
10% Cash and fixed term deposits

Are there any issues with mixing accumulating (AGGU) and distributing (VWRD) funds that i should be aware of?

or

B:
40% FTSE All-World UCITS ETF (VWRD)
30% USD Treasury Bond UCITS ETF (VDTY)
20% SPDR® Bloomberg Barclays U.S. TIPS UCITS ETF (TIPS)
10% Cash and fixed term deposits

Overall a little more conservative than previously listed. But I've been reading some of the great links people have posted and figure my aversion to loss may be greater than I anticipate.

Regards!
Either portfolio would work.

The first portfolio has a bit more volatility due to credit risk. What is the currency of hedging for the bond fund? USD?

The second portfolio will have more volatility re USD vs. local currency, potentially. I do not have a strong view but perhaps suggest A for simplicity.

You are wise to not expose more than 10% of your wealth to local banks etc. The 1997 Crash in SE Asia was pretty horrible - I don't remember what happened in Philippines, but some countries it was just awful. I remember Korean women queuing up to give their wedding rings in to be melted down by the Central Bank, to bolster the nation's gold reserves. Financial institutions would be affected in a repeat.

Distributing funds you have to reinvest the dividends to buy more units. Conversely accumulating funds if you want to take the income out, you have to sell units (the NAV keeps growing over time). It really depends on whether your tax system cares about the difference.

Loss aversion is true and it's nice to hear someone actually listening to our advice. The downside is for a long retirement you are going to need equities for growth in the portfolio - bonds right now hardly yield (the ones that do have a yield, are risky). You may find you have to increase your equity allocation over time in retirement as you spend down your resources. The good news is the world fund should throw off a c. 3% dividend -- it cannot be relied upon in a bear market (companies cut their dividends) but it should grow with inflation.

Topic Author
Wad
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Re: New Investor [ETF suggestions for Canadian expat]

Post by Wad » Mon Jun 03, 2019 5:37 am

Valuethinker wrote:
Mon Jun 03, 2019 2:51 am

Either portfolio would work.

The first portfolio has a bit more volatility due to credit risk. What is the currency of hedging for the bond fund? USD?

The second portfolio will have more volatility re USD vs. local currency, potentially. I do not have a strong view but perhaps suggest A for simplicity.

You are wise to not expose more than 10% of your wealth to local banks etc. The 1997 Crash in SE Asia was pretty horrible - I don't remember what happened in Philippines, but some countries it was just awful. I remember Korean women queuing up to give their wedding rings in to be melted down by the Central Bank, to bolster the nation's gold reserves. Financial institutions would be affected in a repeat.

Distributing funds you have to reinvest the dividends to buy more units. Conversely accumulating funds if you want to take the income out, you have to sell units (the NAV keeps growing over time). It really depends on whether your tax system cares about the difference.

Loss aversion is true and it's nice to hear someone actually listening to our advice. The downside is for a long retirement you are going to need equities for growth in the portfolio - bonds right now hardly yield (the ones that do have a yield, are risky). You may find you have to increase your equity allocation over time in retirement as you spend down your resources. The good news is the world fund should throw off a c. 3% dividend -- it cannot be relied upon in a bear market (companies cut their dividends) but it should grow with inflation.
The currency hedging is USD. Maybe I'll up my equity allocation back to 45%. I like the first portfolio for simplicity too. Taxes are really a non-issue for an expatriate Canadian living in the Philippines.

And yes I was in Korea during the IMF years. It sucked as the Won lost half its value over night.

Anyway, a big thank you to everybody, especially Valuethinker, for all your help. I imagine I will be around here for a while asking lots of newbie questions. :)

Valuethinker
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Re: New Investor [ETF suggestions for Canadian expat]

Post by Valuethinker » Mon Jun 03, 2019 2:00 pm

Wad wrote:
Mon Jun 03, 2019 5:37 am
Valuethinker wrote:
Mon Jun 03, 2019 2:51 am

Either portfolio would work.

The first portfolio has a bit more volatility due to credit risk. What is the currency of hedging for the bond fund? USD?

The second portfolio will have more volatility re USD vs. local currency, potentially. I do not have a strong view but perhaps suggest A for simplicity.

You are wise to not expose more than 10% of your wealth to local banks etc. The 1997 Crash in SE Asia was pretty horrible - I don't remember what happened in Philippines, but some countries it was just awful. I remember Korean women queuing up to give their wedding rings in to be melted down by the Central Bank, to bolster the nation's gold reserves. Financial institutions would be affected in a repeat.

Distributing funds you have to reinvest the dividends to buy more units. Conversely accumulating funds if you want to take the income out, you have to sell units (the NAV keeps growing over time). It really depends on whether your tax system cares about the difference.

Loss aversion is true and it's nice to hear someone actually listening to our advice. The downside is for a long retirement you are going to need equities for growth in the portfolio - bonds right now hardly yield (the ones that do have a yield, are risky). You may find you have to increase your equity allocation over time in retirement as you spend down your resources. The good news is the world fund should throw off a c. 3% dividend -- it cannot be relied upon in a bear market (companies cut their dividends) but it should grow with inflation.
The currency hedging is USD. Maybe I'll up my equity allocation back to 45%. I like the first portfolio for simplicity too. Taxes are really a non-issue for an expatriate Canadian living in the Philippines.
40 or 45% won't make a huge difference to volatility. In the long run, you will get slightly higher returns, which could be meaningful to.
And yes I was in Korea during the IMF years. It sucked as the Won lost half its value over night.
In 1997 free markets were all the orthodoxy. So no exchange controls. Malaysia slammed on exchange controls, and took a lot less pain than Indonesia, Thailand etc. Argentina in 2002 did not, initially, and that made the run on the peso worse (Argentina is so s**wed up that we cannot solely blame the malfeasances of international capital and institutions).

Now, wonder of wonders, the IMF standard toolkit includes exchange controls. They have even implemented them in Greece, which is supposed to be impossible between countries inside a Currency Union (the Eurozone). But impose them they did.

Iceland is instructive. It became impossible to just buy foreign exchange in Iceland. You had to apply to the government if you were a legitimate importer. If it was business travel you had to provide documentation re hotel and flight bookings, meeting appointments etc. Otherwise, you went onto Ebay and bought from another Icelander.

Cyprus the government could not afford to bail out the financial institutions. So they toyed with a 10% haircut to *all* bank accounts. When it became clear that this would lead to a bank run not just in Cyprus, but in every southern European jurisdiction, they said "just joking. We mean 60% for all deposits over 100k EUROs" and the (Dutch?) Finance Minister helpfully contributed "it's all Russian money-laundering money, anyways".

So if you were over 100k EUR, you got "bailed in" - your deposits 60% converted into equity (at a massive discount).

South Korea survived because it has a strong national tradition of pulling together in adversity (that's what Jared Diamond's new book is about, how countries survive catastrophic change - it gets mixed reviews for overgeneralization and mistakes, but I suspect it will still be quite interesting) - the legacy no doubt of Japanese conquest and occupation and centuries before that of Chinese control. Not to mention one of post WW2's bloodiest wars.

Other countries lack the social resilience, the national sense that "we are in this together, against the outside world, therefore we must be prepared to sacrifice ourselves". Other countries would be "every man and woman for himself, or his family".

Anyway, a big thank you to everybody, especially Valuethinker, for all your help. I imagine I will be around here for a while asking lots of newbie questions. :)
It's good to make the world a better place, even in a small way. As I reach a certain age, I realize that that is all life is about fundamentally - I don't have many toys and I wouldn't want them.

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