Starting My Investment Journey: IWDA vs. VWCE for Long-Term ETF Investing

[cedmed30230]

Hello everyone,

After years of saving without investing, I’m finally taking the plunge and starting my investment journey. I’m building a long-term ETF portfolio (10-20 years) and want to focus on stability and diversification for my core portfolio, which will make up 80% of my investments.

I’ve done a lot of research and narrowed it down to two options:

IWDA (Developed Markets) – This ETF focuses on developed markets, which tend to be more stable. Although the U.S. currently holds a significant weight in the index, this could shift over time if other countries outperform.

VWCE (Developed + Emerging Markets) – This ETF includes around 3,600 companies globally, providing broad diversification. If the next Amazon emerges in India or another developing market, it would already be part of this portfolio.

My dilemma:
As I mentioned, I am looking for stability and no risks for the core of my portfolio.

I have concerns about the emerging market component of VWCE. While it only represents about 10% of the portfolio, I’m hesitant due to perceived risks: weaker market regulations, higher corruption, and examples like Alibaba and Tencent facing issues in China a few years ago.

My question:
How can I make a confident decision that I’ll be comfortable sticking with for the next 10-20 years?

Thanks

[Siaigi]

What do you mean by stability and no risk in an investment?

Have you already had a chance to check and evaluate your risk propensity such as https://investor.vanguard.com/tools-cal ... /questions ?

[HKexpat]

Ultimately, 10% in your stock portfolio slightly over-performing or under-performing is not going to be a huge deal. Suppose that over 10 years, developed markets grow by 80% and developing markets grow by 100%. If you pick IWDA instead of VWCE, you get a return of 80% instead of 84%. Are you going to lose sleep over that? Probably not.

The reason I (and many others) pick global exposure is that it's just a little more diversification. For a passive take of "we don't know what the future holds," there's no reason not to include it. But if you are hesitant to go into emerging markets, IWDA is a perfectly reasonable choice -- and either one is better than keeping the money in cash out of paralysis and forgoing market returns entirely.

[nedsaid]

Hello everyone,

After years of saving without investing, I’m finally taking the plunge and starting my investment journey. I’m building a long-term ETF portfolio (10-20 years) and want to focus on stability and diversification for my core portfolio, which will make up 80% of my investments.

I’ve done a lot of research and narrowed it down to two options:

IWDA (Developed Markets) – This ETF focuses on developed markets, which tend to be more stable. Although the U.S. currently holds a significant weight in the index, this could shift over time if other countries outperform.

VWCE (Developed + Emerging Markets) – This ETF includes around 3,600 companies globally, providing broad diversification. If the next Amazon emerges in India or another developing market, it would already be part of this portfolio.

My dilemma:
As I mentioned, I am looking for stability and no risks for the core of my portfolio.

I have concerns about the emerging market component of VWCE. While it only represents about 10% of the portfolio, I’m hesitant due to perceived risks: weaker market regulations, higher corruption, and examples like Alibaba and Tencent facing issues in China a few years ago.

My question:
How can I make a confident decision that I’ll be comfortable sticking with for the next 10-20 years?

Thanks

Huh? Don't see the problem here. Why not some of both? Maybe 75% of monies allocated to International Stocks going to Developed Markets and 25% going to Emerging Markets. No dilemma here. It isn't a 100% of one and a 0% of the other proposition.

[galeno]

I'd either go total world equity (VWCE) or SP500 (your version of VUSD.L).