1Wk·

I have a question?

Aloha,

Which is best USA ETF for core satellite strategy.

Here are my various considerations:

MSCI World e.g. $IWDA (-1.03%) or $HMWO (-1.05%) :

With these ETFs, around 70% is invested in the USA and the rest in industrialized countries. The allocation should adjust automatically based on the market capitalization and thus always run towards the optimum. (unfortunately China not yet included)

S&P 500 e.g. $VUSA (-1.13%) :

Here you are invested in the 500 most successful or largest companies in the USA. The good thing is that the largest companies generate most of their sales globally (including in China).

As an alternative to the S&P 500, there is also the MSCI USA:

I have the feeling that this index is very unknown, but it performs slightly better than the S&P 500 and there are favorable ETS on it and also many factor games, if desired.

Nasdaq100 for example. $EQQQ (-1.48%) :

The largest companies listed on the NASDAQ stock exchange. Contrary to what many believe but do not know, these are predominantly US companies, but not exclusively. For example, companies such as $ASML (-0.72%)
$MELI (-4.31%)
$AZN (+1.03%) and others are also listed on the Nasdaq B. and are part of the QQQ Index. This index is a little more attractive but beats the S & P 500 in the long term.

Now I have a headache. Which one should I buy for my USA Core?

25 Comments

Harald@Madhatter5566

1Wk

I would first look at what you actually want:

What do you want the Satelite to be=? If it then becomes Eurozone, EM or Small Cap and so you have only built a FTSE All World (where one then lags behind the other). Then you might as well take it.

Or should it be commodities, precious metals, crypto and everything else that is hidden in the world?

How high is your capacity for suffering when the vola of the portfolio is high? Something with a good return usually also has high volatility... Accordingly, you need something stabilizing if necessary, or the USA ETF if you really want the best return (and consciously accept the risk), with the drawback that you never know what will happen. See Trump. The things that bubble up can be good for the USA, or not.

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Kai@Dividenden-Sammler

1Wk

I would use $VUSA as a core if you want to focus purely on the USA. Otherwise, an ETF on the MSCI World (regardless of which of the two you mentioned) or one on the FTSE Allworld Index (for example $VWRL ) would of course be a possible additional alternative. The USA has a large weighting in both index ETFs, but other countries are also represented. In my opinion, all 3 indices (S&P500, MSCI World or FTSE AllWorld) are ideally suited for a core in a core/satellite portfolio. The ACWI would also exist but not as well known as the 3 mentioned above - but still possible.

As a satellite, you can then add the $EQQQ if you want to focus more on tech. Personally, however, I would only take it if I didn't have the $VUSA as my core, as otherwise it would be too USA-centric for me and I would miss out on the rest of the world (but that's just my opinion now). Even if you consider that the companies in the S&P500 naturally generate their sales worldwide.
Why the Nasdaq100 only as a satellite? For me it would simply be too one-sidedly focused on the tech sector to use it as a core in a broadly diversified portfolio. But interesting as an additional return booster. If you want to take more risk and use it as a core, you have to expect that your portfolio will be much more volatile.

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