1Sem.·

ETF selection 🤯

After a thorough analysis of the ETF Guide from @RealMichaelScott I have settled on the second model FTSE ALL WORLD + SMALL CAPS (85% / 15%). (Many thanks for the great analysis at this point)

📉In view of the current situation and the criticism that is ultimately being leveled at ETFs with a 70% US exposure, I am now asking myself whether it really still makes sense and is in keeping with the times to invest 85% in an ETF with such a heavy US exposure. 😟

The following All Worlds are currently available (85%):

$UETW (-0,33 %) - particularly low TER

$VWCE (-0,44 %)

small caps (15%):

$WSML (-0,35 %)

👾Through this reallocation, I would like to escape my current, far too expensive Deka funds and build up the largest investment portion in my Core Satelite strategy in the form of a WORLD ETFS.

What is your assessment? Do you have any suggestions? Thank you very much and have a great start to the weekend! 🥳

13 Commentaires

Banana M.@Banana_Millionaire

1Sem.

I am also a fan of global diversification, but quite honestly, I do not believe that US dominance will diminish over the next few decades. In the end, all world investors would probably be better off with an S&P500.

What I'm actually saying is this:
I would still invest globally, but don't let the weighting drive you crazy.
When sustained weakness emerges, it's a process.
In time, an ETF rebalances by market capitalization quite autonomously and the lump melts by itself.

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sakamo@sakamo

1Sem.

@Banana_Millionaire All right, thanks for the assessment. I could also imagine that the EU is currently just a bit of hype, especially in terms of armor, etc.

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Epi@Epi

1Sem.

@Banana_Millionaire US outperformance is cyclical. It changes roughly every decade. And we have just had 15 years of US outperformance. It would not be unusual if there were another 10-15 lean years.

And while the US share is shrinking due to market capitalization, the MSCI World is also underperforming. But it won't be called underperformance because the MSCIWorld is the benchmark. 😁

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Banana M.@Banana_Millionaire

1Sem.

@Epi that would actually be a dream 😁
There are so many great companies that I would want to buy.
I'd like to see a decade of weakness.
Maybe the feeling is deceptive, but I think the market has also changed a bit over time.
Simply because of the tech dominance, which will certainly continue for a while.
Maybe it's just beyond my imagination, but I can't imagine how MAG7s, for example, will be displaced. Especially now, when in my opinion we are still at the beginning of the AI age.
These companies have such a gigantic head start that I find it hard to imagine other companies at the top in the near future 😅
But with my ~3 years of stock market experience, I still have eggshells on my head and am happy to be proven wrong 🙂

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Epi@Epi

1Sem.

@Banana_Millionaire Take a look at history - you can make up for a lack of experience. 80s information technology, 90s internet - both times the technology was indeed transformative and there were many great companies. Nevertheless, only a few of them made it through the decade. Or do you remember Hewlett Packard, Xerox, AOL and Yahoo - all Mag7 from back then?

A very likely scenario is that the Mag7 companies consolidate their valuations, some lose their supremacy to newcomers, the focus of investors shifts to the application side. Those Mag7s that are able to adapt their business model correctly in 10 years' time will continue to operate. The others will be taken over or disappear into insignificance.

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Banana M.@Banana_Millionaire

1Sem.

@Epi Thank you for your assessment. I think you will be right in the long term, but I don't think the air is out yet.
The first indicator of slower growth is certainly already in place for some with the introduction of a dividend.

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Oleg@ScorpionfromBW

1Sem.

$UETW but is not all world and has a USA ratio of 71% to 63% compared to $VWCE. Please compare more closely before you buy

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sakamo@sakamo

1Sem.

@ScorpionfromBW Thanks for the tip! I had already seen that before, but thought it still counted as a WORLD ETF😅

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Ironman@Ironman2022

1Sem.

You should familiarize yourself with the indices that the ETFs track. Then you will know what you are buying. And don't forget that the weightings of the securities, countries and sectors they contain change regularly.

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sakamo@sakamo

1Sem.

@Ironman2022 all right, thanks for the tip!

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Patrick Schäfer@Hotte1909

1Sem.

There have always been years when the US has underperformed. In fact, these years are the best years to get in because they have always caught up in the long term and as far as I know, even over a one-year period, the US has never underperformed the rest.

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sakamo@sakamo

1Sem.

@Hotte1909 then I think now is actually a good time to make a fresh start 😁

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Metis@Metis

1Sem.

Basically, I am not very worried about a high US share in my AllWorld. If other countries/sectors rise more than the currently driving US companies, this will also be reflected in the ETF and the weighting will be shifted accordingly.

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