A haphazard portfolio? Please advise!

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am301
Posts: 4
Joined: Tue May 14, 2024 2:03 am

A haphazard portfolio? Please advise!

Post by am301 »

Hello Friends,

Thanks in advance for your help. Here is my info.


Country of residence: Egypt

International lifestyle: Not moving, not changing countries

Age: 38



Current portfolio:

Real Estate: $100k
Bank savings account yielding 5% (non-taxable): $100k
Stocks: $130k

Debt: None



I'm looking for advise on my retirement assets:

Current retirement assets

ETFs (LSEETF)
37% VWRA: Vanguard FTSE All-World UCITS ETF 0.22%
11.5% VUAA: Vanguard S&P 500 UCITS ETF 0.07%
10.5% EIMI: iShares MSCI Emerging Markets IMI UCITS ETF 0.18%
9.8% IWVL: iShares MSCI World Value Factor UCITS ETF 0.30%
8.14% ICOM: iShares Diversified Commodity Swap UCITS ETF 0.19%
7.5% ECAR: iShares Electric Vehicles and Driving Technology UCITS ETF 0.40%
6.7% IKSA: MSCI Saudi Arabia Capped UCITS ETF 0.60%
5% XDWH: Xtrackers MSCI World Health Care UCITS ETF 1C, 0.25%

Stocks & Others

2.6% UBER
1% BITCUSD


New investments

I add around $30k annually to the portfolio indicated above. All are directed toward retirement.
I’m also adding $12k annually to the 5% savings account (easily accessible so I consider it an emergency fund)


Questions:
- I’ve chosen these ETFs haphazardly. How can adjust this portfolio?
- I want to invest in assets with a slightly higher return because I’m willing to take on a bit more risk. What should I do?
- I’m not sure about my position regarding taxes. All the ETEF’s are in LSEETF
- Any general advice regarding my investment strategy?
Last edited by am301 on Wed May 15, 2024 2:58 am, edited 2 times in total.
Valuethinker
Posts: 49350
Joined: Fri May 11, 2007 11:07 am

Re: A haphazard portfolio? Please advise!

Post by Valuethinker »

there is a standard format here for requesting portfolio assistance. Pinned to the top of the relevant sub boards.

I would note generally that:

- most of us don't know the letter ticker codes. I never really understood why people think we would?
- it helps if one posts the name of the fund, the expense ratio, after the fund ticker.

One might, therefore, get more (and more useful) responses?
User avatar
tre3sori
Posts: 464
Joined: Wed Jul 24, 2019 3:13 am

Re: A haphazard portfolio? Please advise!

Post by tre3sori »

ChatGPT generated this list of full names and expense ratios (didn't check!):

Portfolio with Full Names

Exchange-Traded Funds (ETFs):
37% VWRA: Vanguard FTSE All-World UCITS ETF 0.22%
11.5% VUAA: Vanguard S&P 500 UCITS ETF 0.07%
10.5% EIMI: iShares MSCI Emerging Markets IMI UCITS ETF 0.18%
9.8% IWVL: iShares MSCI World Value Factor UCITS ETF 0.30%
8.14% ICOM: iShares MSCI ACWI UCITS ETF 0.20% iShares Diversified Commodity Swap UCITS ETF 0.19%
7.5% ECAR: iShares Electric Vehicles and Driving Technology UCITS ETF 0.40%
6.7% IKSA: iShares MSCI Korea UCITS ETF 0.74% iShares MSCI Saudi Arabia Capped UCITS ETF 0.60%
5% XDWH: Xtrackers MSCI World High Dividend Yield UCITS ETF 0.29% Xtrackers MSCI World Health Care UCITS ETF 1C, 0.25%

Stocks & Others:
2.6% UBER: Uber Technologies Inc
1% BITCUSD: Bitcoin

Simplified Portfolio: A single global stock ETF
100% VWRA: Vanguard FTSE All-World UCITS ETF for example
Please check your tax situation before selling ETFs with capital gains.

Your current portfolio overweights certain stocks at the expense of others, but with what internal logic?
Most of the stocks in your factor, region and sector ETFs are already present in VWRA (with the exception of EIMI, which probably has a negligible
number of small caps not present in VWRA)

The simplest way to generate a slightly higher (expected) return: invest (part of) your 12k annual cash payments to
that global stock ETF instead of a savings account.
Last edited by tre3sori on Wed May 15, 2024 1:03 am, edited 2 times in total.
The information provided is intended to be entertaining. It is not to be construed as professional advice. Use it at your own risk.
monkeytoad
Posts: 48
Joined: Sat Apr 06, 2024 11:16 am

Re: A haphazard portfolio? Please advise!

Post by monkeytoad »

tre3sori wrote: Tue May 14, 2024 10:46 pm ChatGPT generated this list of full names and expense ratios (didn't check!):

5% XDWH: Xtrackers MSCI World High Dividend Yield UCITS ETF 0.29%
Cool, but least the last one seems to be off. This looks like Xtrackers MSCI World Health Care UCITS ETF 1C
https://markets.ft.com/data/etfs/tearsh ... WH:LSE:USD.
Just trying to stay the course
User avatar
tre3sori
Posts: 464
Joined: Wed Jul 24, 2019 3:13 am

Re: A haphazard portfolio? Please advise!

Post by tre3sori »

monkeytoad wrote: Tue May 14, 2024 11:55 pm
tre3sori wrote: Tue May 14, 2024 10:46 pm ChatGPT generated this list of full names and expense ratios (didn't check!):

5% XDWH: Xtrackers MSCI World High Dividend Yield UCITS ETF 0.29%
Cool, but least the last one seems to be off. This looks like Xtrackers MSCI World Health Care UCITS ETF 1C
https://markets.ft.com/data/etfs/tearsh ... WH:LSE:USD.
Yes. Right.
XDWH: Xtrackers MSCI World Health Care UCITS ETF 1C, 0.25% TER
ICOM: iShares Diversified Commodity Swap UCITS ETF, 0.19%
IKSA: iShares MSCI Saudi Arabia Capped UCITS ETF, 0.60%
Last edited by tre3sori on Wed May 15, 2024 1:04 am, edited 2 times in total.
The information provided is intended to be entertaining. It is not to be construed as professional advice. Use it at your own risk.
monkeytoad
Posts: 48
Joined: Sat Apr 06, 2024 11:16 am

Re: A haphazard portfolio? Please advise!

Post by monkeytoad »

tre3sori wrote: Wed May 15, 2024 12:18 am
IKSA...cannot find that out
Maybe iShares MSCI Saudi Arabia Capped UCITS ETF? https://www.ishares.com/uk/individual/e ... -ucits-etf

It was a cool use of ChatGPT, though (as well as a reminder not to rely on it 100%).
Just trying to stay the course
User avatar
tre3sori
Posts: 464
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Re: A haphazard portfolio? Please advise!

Post by tre3sori »

monkeytoad wrote: Wed May 15, 2024 1:02 am
tre3sori wrote: Wed May 15, 2024 12:18 am as well as a reminder not to rely on it 100%
Yes. I thought with publicly available information ChatGPT 4o would do a little bit better than that.
¯\_(ツ)_/¯
The information provided is intended to be entertaining. It is not to be construed as professional advice. Use it at your own risk.
Topic Author
am301
Posts: 4
Joined: Tue May 14, 2024 2:03 am

Re: A haphazard portfolio? Please advise!

Post by am301 »

Yes, I realized that I should've posted the actual name of the fund but after I submitted the post for approval. I'll amend it now for clarity. Many thanks!
Topic Author
am301
Posts: 4
Joined: Tue May 14, 2024 2:03 am

Re: A haphazard portfolio? Please advise!

Post by am301 »

Many thanks for your reply and for helping me post the correct fund names. This is my first post here, so I'm a bit confused, but I'll get there.

tre3sori wrote: Tue May 14, 2024 10:46 pm
Your current portfolio overweights certain stocks at the expense of others, but with what internal logic?

My logic was that I thought some stocks/sectors would perform better. So I invested in value stocks, and in the commodity tracker (ICOM) to benefit from the high inflation environment etc. Same with investing in EIMI, which was to put some weight into stocks that would rally when rates drop, or ECAR to have a little more weight in the ev sector. What do you think of this logic?
The simplest way to generate a slightly higher (expected) return: invest (part of) your 12k annual cash payments to
that global stock ETF instead of a savings account.
Are there other ETFs you'd recommend?



Thank you
User avatar
tre3sori
Posts: 464
Joined: Wed Jul 24, 2019 3:13 am

Re: A haphazard portfolio? Please advise!

Post by tre3sori »

am301 wrote: Wed May 15, 2024 3:31 am My logic was that I thought some stocks/sectors would perform better. So I invested in value stocks, and in the commodity tracker (ICOM) to benefit from the high inflation environment etc. Same with investing in EIMI, which was to put some weight into stocks that would rally when rates drop, or ECAR to have a little more weight in the ev sector. What do you think of this logic?
Value stocks: there is a debate about factor premiums vanishing as soon as they become investible.
Commodity (futures) ETFs: May protect against short term spikes of inflation. For a long-term investor the opportunity cost of money not invested in the stock market but invested in an asset class with expected real return of zero is something to consider.
Emerging Markets profiting from a rate drop: Wouldn't a rate drop anticipate a slow down in economy leading to more pressure on emerging markets compared to developed markets and an outflow of capital from emerging markets that is looking for a safe haven?
Thematic ETFs (Electric Vehicles, Clean Energy, ...): There was a recent study that showed that these thematic ETFs are incepted when the theme is hot. (Retail) investors buy high and sell low leading to underperformance compared to a broad index.
Are there other ETFs you'd recommend?
I myself have learned that it is better to abstain from FOMO
and from shopping around for ETFs that I could own for this or that more or less plausible reason.
Things change, and I think changes are best reflected in broad indices as they are able to adjust their weight/exposure to themes,regions,factors automatically. This reduces the potential for behavioral errors.
Don't know anything about Egypt and capital gains taxes. With capital gains taxes be aware that you effectively lock yourself into a complex strategy that you chose at the beginning of your investment career. Changing the strategy will be prohibitively costly with respect to capital gains taxes the longer you stay invested in it (given stock prices rise).
These are some reasons why I recommend using the simplest solution for harvesting the equity risk premium: invest in a single global stock market ETF like VWRA.
That's what I do.
The information provided is intended to be entertaining. It is not to be construed as professional advice. Use it at your own risk.
Wise_Saver
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Joined: Thu Jun 08, 2023 6:21 am

Re: A haphazard portfolio? Please advise!

Post by Wise_Saver »

Valuethinker wrote: Tue May 14, 2024 8:57 am - most of us don't know the letter ticker codes. I never really understood why people think we would?
- it helps if one posts the name of the fund, the expense ratio, after the fund ticker.
I am new here. I don't understand:
- why some people don't know the letter ticker codes. Don't you use to buy stocks or ETFs, or the check their performance on google or yahoo?
- why would you care about the expense ratio? If ETF managers make a better job selecting stocks, wouldn't they deserve a bit more money, since you make some more money yourself?
monkeytoad
Posts: 48
Joined: Sat Apr 06, 2024 11:16 am

Re: A haphazard portfolio? Please advise!

Post by monkeytoad »

OP, one thing that stands out to me is that some of your stock is US domiciled, and some UCITS. If you aren't a US citizen, your current portfolio size + percentages mean that you are probably under the US estate taxes, but that may change as you pour in more to the investment. If you are a US citizen, you shouldn't be in UCITS.
Just trying to stay the course
Topic Author
am301
Posts: 4
Joined: Tue May 14, 2024 2:03 am

Re: A haphazard portfolio? Please advise!

Post by am301 »

monkeytoad wrote: Fri May 17, 2024 5:31 am OP, one thing that stands out to me is that some of your stock is US domiciled, and some UCITS. If you aren't a US citizen, your current portfolio size + percentages mean that you are probably under the US estate taxes, but that may change as you pour in more to the investment. If you are a US citizen, you shouldn't be in UCITS.
Thanks for your reply. I am not a US citizen. Can you please explain more? So the UCITS means that I won't be subject to taxes? That the majority of my portfolio, right? Your help is appreciated
monkeytoad
Posts: 48
Joined: Sat Apr 06, 2024 11:16 am

Re: A haphazard portfolio? Please advise!

Post by monkeytoad »

am301 wrote: Fri May 17, 2024 9:18 am
monkeytoad wrote: Fri May 17, 2024 5:31 am OP, one thing that stands out to me is that some of your stock is US domiciled, and some UCITS. If you aren't a US citizen, your current portfolio size + percentages mean that you are probably under the US estate taxes, but that may change as you pour in more to the investment. If you are a US citizen, you shouldn't be in UCITS.
Thanks for your reply. I am not a US citizen. Can you please explain more? So the UCITS means that I won't be subject to taxes? That the majority of my portfolio, right? Your help is appreciated
There are two relevant countries: yours (where you live or are a citizen), and of the ETF you are buying.

If you buy US ETFs, the US will tax the ETFs on dividends every time they given them out, and if you are not a citizen and your investment in the ETF is larger than 60K$, then upon death your heirs could be subject to estate tax (https://www.reddit.com/r/eupersonalfina ... us_person/).
The US does not currently tax the dividends of UCITS - if they are accumulating, they are reinvested before taxation. You can also hold as much as you like in UCITS, even those that hold US assets, and US estate tax won't apply.

As for Egyptian taxes, I don't know. I think Germany, for example, taxes a lot more on non-UCITS ETFs. Israel (where I live) taxes everything the same. I'd guess Egypt taxes everything the same as well, but you really should check.
Just trying to stay the course
jg12345
Posts: 452
Joined: Fri Dec 11, 2020 12:03 pm

Re: A haphazard portfolio? Please advise!

Post by jg12345 »

Wise_Saver wrote: Thu May 16, 2024 11:38 am
Valuethinker wrote: Tue May 14, 2024 8:57 am - most of us don't know the letter ticker codes. I never really understood why people think we would?
- it helps if one posts the name of the fund, the expense ratio, after the fund ticker.
I am new here. I don't understand:
- why some people don't know the letter ticker codes. Don't you use to buy stocks or ETFs, or the check their performance on google or yahoo?
- why would you care about the expense ratio? If ETF managers make a better job selecting stocks, wouldn't they deserve a bit more money, since you make some more money yourself?
Hi
I suggest you open a new thread for your second question, to not hijack OP post.
For the first one, different markets have different tickers. in addition, it's your choice: the more work you put on the responder to find out what you want to say, the less likely said responder will have time to reply. Presuming you want to maximize your chances of getting a reply, you want to make the life of who replies as easy as possible
jg12345
Posts: 452
Joined: Fri Dec 11, 2020 12:03 pm

Re: A haphazard portfolio? Please advise!

Post by jg12345 »

am301 wrote: Fri May 17, 2024 9:18 am
monkeytoad wrote: Fri May 17, 2024 5:31 am OP, one thing that stands out to me is that some of your stock is US domiciled, and some UCITS. If you aren't a US citizen, your current portfolio size + percentages mean that you are probably under the US estate taxes, but that may change as you pour in more to the investment. If you are a US citizen, you shouldn't be in UCITS.
Thanks for your reply. I am not a US citizen. Can you please explain more? So the UCITS means that I won't be subject to taxes? That the majority of my portfolio, right? Your help is appreciated
Hi OP
1) Please read boglewiki for estate tax, and many other topics. In short, at your death, any US domiciled asset you have beyond 60k US$ (if i recall well) will be taxed by the US IRS.

2) Few points on the portfolio:
1- if your savings account is the mergency fund, it seems big. we suggest as emergency funds a few months of expenses.

2- I would suggest for stocks to have only Vanguard FTSE all world (or similar: MSCI ACWI, or MSCI world + MSCI emerging markets, or FTSE developed world + FTSE emerging markets). No sector stocks because you do NOT know better than the market.

3- I see no bonds whatsoever, is that a conscious choice? do you count the emergency fund as part of your portfolio? I would not. Or are you ok being 100% stocks?

Note that real estate is volatile and should be considered same as stock if it's an investment and currently put to rent. If it's the house you live in, I suggest not considering as part of the portfolio.
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