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Maximilian
@Maxdepot
1Anno·

Hi guys,

As an ETF newbie, I want to start with a savings plan with 300€/month. For this, I will invest to ⅔ the $VWCE (+0,31%) and at ⅓ the $VWCG (-0,04%) savings plan.

My reasoning for this is that due to the $VWCG (-0,04%) the high share of the USA of the $VWCE (+0,31%) and thus get more Europe in.

Does this make sense from your point of view?

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ToDaMoon@randomdude
1Anno
You can do it that way. There is no such thing as the "right" weighting anyway, and you only ever know what will bring the highest returns afterwards. But don't be blinded by the good European performance of the last 6 months or the extremely strong US market of the last 10 years. Historically, sometimes this market, sometimes that market - in terms of decades - has been ahead. Personally, I would go for a 1-ETF solution, because the regional shares are regularly readjusted according to the market capitalization.
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Uwe G@UweG
1Anno
You can do that, but it makes for a relatively high GB share, which I didn't want to have at the moment.
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Philipp@DerAkti0naer
1Anno
@UweG You are absolutely right. The $VWCG has a GB share of 25%. Would you have a good alternative with a smaller GB share? Or if you want to split an ETF savings plan 70/30, with 70% in the $VWCE, which ETF could you still recommend for 30% of the savings plan rate? Where the main focus should be on an additional weighting of Europe, without creating a relatively large overweight for GB.
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ToDaMoon@randomdude
1Anno
@DerAkti0naer There are also Eurozone ETFs, so maybe there is an alternative. However, at the latest with a weighting of 30%, you go in a direction that no longer has much to do with a world portfolio.
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Philipp@DerAkti0naer
1Anno
@randomdude I'll take a look, thanks!
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GeldmitKopf@cashwithhead
1Anno
if you want to have more Europe in it then go for It. But with the All world many Europe values are inside. You don't equalize the USA share but simply weight the Europe share higher.
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Epi@Epi
1Anno
The AllWorld already weights according to market capitalization. Which criterion do you use? GDP? Home bias?
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Maximilian@Maxdepot
1Anno
@Epi I actually only looked at the % weighting by country of the indices, is this not a good criterion?
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Epi@Epi
1Anno
@Maxdepot Sure, you have to look at the weighting of the countries. Then what do you do with that info? That's what I was asking about.
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Maximilian@Maxdepot
1Anno
@Epi I would like to achieve the greatest possible diversification and cushion the 50% USA share in the All World somewhat with European companies.
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Epi@Epi
1Anno
@Maxdepot The Allworld already has thousands of stocks. You can hardly get more diversified. And if you increase the European share, then you are overweighted there in terms of market capitalization. Once again: In what way is the USA overweighted by 50% for you?
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Maximilian@Maxdepot
1Anno
@Epi but the market allocation of the USA is 59.1% (according to data sheet: https://fund-docs.vanguard.com/FTSE_All-World_UCITS_ETF_USD_Distributing_9505_EU_GERMAN_GE.pdf). This means that if I buy the ETF, almost 60% will be invested only in American companies and thus one country is much more strongly represented than all the others. My strategy would be in principle already a distribution according to market capitalization. Only I think very much of the European economy, which is too weakly represented to me purely because of the market capitalization. Thus, I try to weight the European economy more strongly through another ETF from Europe.
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Epi@Epi
1Anno
@Maxdepot You see that correctly. But in what sense is that an overweight? The US also has almost 60% of the market capitalization of the investable market. The ETF does not decide how much USA is in it.
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Maximilian@Maxdepot
1Anno
Thank you for your Meinungen☺️
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