Vik · 2024-05-16T20:19:32.686387Z

Hello dear community, I would like to start saving in an ETF (accumulating). The idea would be to let the interest work for me for as long as possible in order to have a good cushion when I retire (30+ years). I am currently comparing $IWDA and $SPXS . What are your opinions on these two options and do you have any other ETF suggestions? VG

9Lun

Hello @equity_enthusiast_54 Very good approach! Personally, the S&P 500 would be too much America for me (approx. 97%). Of course it has done well in the past but I would rather go for Msci World + Emerging markets - e.g. 70/30 weighting.

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Vik@equity_enthusiast_54

9Lun

Hello @Marco_91, thank you very much for your input! I have already thought about saving in several ETFs. As I understand that a split significantly reduces the compound interest effect, I haven't pursued this idea any further yet. Have you already had any experience with this?

VG

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Kevin E.@KevinE

9Lun

@equity_enthusiast_54 Why should two separate ETFs hinder the compound interest effect?

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Mabenst@Mabenst

9Lun

@[equity_enthusiast_54](equity_enthusiast_54) it does not, of course, with the same performance of the individual positions :) LG

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Vik@equity_enthusiast_54

9Lun

Hello @Mabenst & @KevinC, I seem to have made a mistake and have just done the math. You are of course right! Sorry for the mistake on my part. I currently find this approach the most attractive :)

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Vik@equity_enthusiast_54

9Lun

Can you recommend emerging markets ETFs?

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Mabenst@Mabenst

9Lun

I would include a little bit, it doesn't have to be 30% (but it is often done). Ultimately, no one knows what will perform better, but you will have more diversification in any case. In the MSCI ACWI you have around 10% emerging markets directly included and therefore still only one ETF or alternatively the FTSE All World, which also includes emerging markets directly. It is then often considered whether, for example, to weight Europe more or reduce the US share (I haven't) or to explicitly add some small caps (I have).

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Vik@equity_enthusiast_54

9Lun

@Mabenst Thanks for your input, I'll take a closer look! :)

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Enrique@Dividenden_Monteur

9Lun

@Marco_91 How can an S&P 500 ETF have 97% America? It must actually have 100% 😅

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Kevin E.@KevinE

9Lun

@Der_Dividenden_Monteur A part of Switzerland is often shown, but I've also forgotten the reason 😄

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Marco@Marco_91

9Lun

@equity_enthusiast_54 Hi Vik - I agree with the others. I would also not see a point regarding the compound interest effect. VG

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Ella Marie Waschbär@DividendenWaschbaer

9Lun

Why the $SPXS? Is there a special reason for this?

Just asking because it "only" synthetically emulates.

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Vik@equity_enthusiast_54

9Lun

Hi @DividendenWaschbaer, that's a good question. I believe that the tracking error is lower with synthetic mappings than with physical mappings. For this reason, and a recommendation from a friend, I ended up with this ETF, but am open to alternatives.

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Ella Marie Waschbär@DividendenWaschbaer

9Lun

@equity_enthusiast_54 Well, I'll be ordering the $VUAG

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Vik@equity_enthusiast_54

9Lun

@DividendenWaschbaer very interesting, also has a significantly higher fund volume than $SPXS. Are you saving in this as your only ETF or another one to counteract the dependency on America?

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Ella Marie Waschbär@DividendenWaschbaer

9Lun

@equity_enthusiast_54 I have separated my individual shares and my ETF portfolio and both run independently of each other.

The S&P500 is saved as a support for later health insurance contributions.

You can see the other ETFs in my portfolio. The $HMWO is only fed with dividends on a quarterly basis.

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Vik@equity_enthusiast_54

9Lun

@DividendenWaschbaer Thank you very much for your input!

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EdoTensei@EdoT

9Lun

$VWCE also worth considering :D

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Vik@equity_enthusiast_54

9Lun

Hello @EdoT Thank you for your input. Are there any arguments that make $VWCE more attractive than $IWDA? Although the latter has a lower dependency on America, it has a significantly lower fund volume.

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EdoTensei@EdoT

9Lun

@equity_enthusiast_54 both ETFs don't really have anything in common :D was just a little tip to have a look at them. The $VWCE is a bit more broadly diversified in emerging countries, also has a small proportion of small caps which $IWDA doesn't have as far as I know, but as I said it doesn't take much :)

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Breadley 🥪@Stullen-Portfolio

9Lun

@equity_enthusiast_54
The fund volume should not concern you too much...It is completely irrelevant from 500 million at the latest, most experts even say from 100 million.

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Luffy@Luffy3D2Y

9Lun

I believe that the USA will continue to have the most important companies in the world. Therefore, all in $SPY5 or the accumulating ones.

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Vik@equity_enthusiast_54

9Lun

Hi @Luffy3D2Y It's quite possible that your assumption is correct. Of course, no one can know exactly what the world will look like in 30+ years. Thanks for your input!

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TheGuardian@TheGuardian

9Lun

S&P 500 - so called „World“ ETFs and other markets still follow US indices.

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Vik@equity_enthusiast_54

9Lun

Hi @TheGuardian, thank you for your input. You are right, most global ETFs are heavily exposed to the US markets (50% or more). In my opinion, this is not necessarily a bad thing. However, I understand that broader diversification leads to more stable performance.

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TheGuardian@TheGuardian

9Lun

@equity_enthusiast_54 I repeat from my other answers - I don’t believe in diversification just for the sake of it. S&P 500 -> 500 companies - World ETFs lower weighted with more than 1000 companies. So, dilution is what you get with diversification unless there is a strategy. I have 30+ years to look to and in that time I would focus on growth for half of that time before going defensive

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Vik@equity_enthusiast_54

9Lun

@TheGuardian I understand what you are saying. I think your approach makes sense. I still need to think a bit before deciding on a strategy, but starting with higher risk/higher return and moving to a more defensive allocation later on makes sense

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Breadley 🥪@Stullen-Portfolio

9Lun

I think your idea of investing in ETFs and then reinvesting is a really good one, as it largely coincides with mine (I actually manage to avoid individual shares completely this way).

However, satisfaction is important for a good, personal strategy, because long-term satisfaction saves you from constantly brooding and avoids quasi-optimizations (which often tend to become pessimizations).

For my personal satisfaction, for example, I need 5 different ETFs as a basis for my "World"...whereby the big ones are not plain vanilla a la MSCI World, but ETFs with a customized investment strategy (the $JREG and $GGRG). The same applies to the supplementary EM and small cap ETFs.

I use small units of a World IT ETF and a Nasdaq ETF to deliberately accentuate my portfolio in this respect.

I round off the portfolio with a special ETF with a sector rotation strategy on the S&P 500 (whereby the sector rotation strategy ETF $216361 will have a permanent share of over 30%).

I am extremely satisfied with this very individual composition and have so far been able to completely resist buying even a single share - because it would not give me any further advantage...

Greetings
🥪

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Tobi@TobiasSimple

9Lun

After some thought, I decided on de $IWDA and the $EIMI 70/30 split and these are now being saved.

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Lostian@Lostian

9Lun

Or $SPYI and 99% of the market economy

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