Moritz (@leveragegrinding) on getquin

Moritz

@leveragegrinding

1Mon·

$VWCE (+0.98%)
is a scam...

At what point is a US overweight harmful?

The US weighting in the $VWCE is still blatant.

And yes, of course, it doesn't bother anyone, because that's exactly what has outperformed in recent years and is now alone at the top of the global economy

But isn't investing in an AllWorld about risk diversification? Diversified investment in large parts of the global economy in order to cushion any bubbles in individual sectors as much as possible?

That is not at all the case with US tech.

The biggest 10 make up 20%. That doesn't have much to do with risk-free diversification, maybe it's yield-oriented overweighting, but is that the purpose of an All World ETF?

Not in my eyes, so what should be changed?

The All World ETFs have 2 defined focuses: The companies covered are large and just over 60% American.

So to at least balance out the diversification I would need an ETF without US participation, as well as an All World Small/ Mid Cap

Before I start my search, do you see it the same way or have I overlooked something?

36 Comments

DerDanner@Therapeut

1Mon

Yep, that's why it's all in the USA😂🫡🍾

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Metis@Metis

1Mon

If successful companies were to be shifted, the weighting within these world indices would also change accordingly. Otherwise, there is always the option of using other ETFs to increase the weighting of missing countries and sectors within the portfolio.
I have also done the latter, adjusting areas in the AllWorld ETF that are too underweighted for my taste by adding further ETFs, and I am still adjusting this month by month via my savings plans.

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Kate@Iwanowitsch

1Mon

I see it similarly. Of course, the weighting of the All World ETF would also change with market changes, but in my opinion you are better positioned with a world portfolio of various regional ETFs than with a single one, also because you can then practise timing much better. Because timing is everything. :) Of course, the one ETF solution is convenient and for some it is the best solution.

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Fetzen@Fetzen

1Mon

So if you want to avoid the USA, you can consider something like $EXUS, or something with EM and Europe

Otherwise I have a similar view. Even if I don't mind the USA... AW is just weighted by market cap and you can question that

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Satoshi Nakamoto@DonkeyInvestor

1Mon

That's why I've also added an IT ETF to my portfolio. That way I get even more USA 🚀

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Kill_Baulitz@Johann_van_der_Smut

1Mon

Let's not kid ourselves - without a US overweight you won't get these returns either. I don't understand the panic many people are feeling about this. If things don't go well in the US, they won't go well anywhere else. Diversification or not. Have you ever experienced a phase where the stock markets in the US went down and that didn't affect the rest of the world?

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Chrisse95@Chris_legt_an

1Mon

I think most people who are involved in investing are aware that the US is simply overweighted in the ETFs.
However, I don't think it's a bad thing, the companies are so big and so global, I can't think of any scenarios that explicitly hit the US so hard that I'm at a disadvantage.
If you really want to focus more on All World then I think it's a trade off with strong returns for high risk.

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High F.@HighFoxtrot

1Mon

If the US market crashes, then everyone crashes. Nevertheless, I take a similar view and have also bought the Europe ETF with 25%. It costs a bit of a return, but I feel a bit better...

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