r/stocks
Around £200k-£220k to invest - wanted to discuss ETFs I am looking at
Investor with £200k-£220k seeks advice on ETF allocation, comparing SWDA, TDGB, and VHVG, while considering leveraged ETFs.
- SWDA has shown stable growth since 2009 with effective rebalancing.
- TDGB offers solid 5-year growth and strong dividends.
- 2x leveraged S&P 500 historically outperforms vanilla S&P 500 long-term.
- Leveraged ETFs carry compounding and volatility decay risks.
- TDGB dividends are paid in Euros, incurring FX fees.
Hi Everyone,
Very late but I decided to join the game. I am currently doing all the research and want to be very careful so wanted to discuss ETFs and strategy with you as that sub has been very helpful so far.
I have currently got around £40k in bonds paying 5% over the next 3 years. Can sell it if I see that ETFs are doing good. On top of that I have got something like £200k-£220k to invest in ETFs, was thinking eventually to keep around £20k out of it to try with individual stocks.
I can't upload the screenshot of my Excel spreadsheet, here is the list of ETFs I found that seem fairly popular.
SWDA
SSAC
VWRP
VWRL
V3AB
VHVG
TDGB
XMWX
However some of them seem very similar to each other so I wanted to ask what is the difference between them?
Two that I like the most are:
1) SWDA – shows very good last 5 years performance but most importantly, shows very stable growth since 2009. Seems like their rebalancing is working really well.
2) TDGB – fairly expensive but with very good 5 years growth and solid dividends on top of that. Little issue is with Dividends paid in Euro, which means I would lose on some FX fee every time I get dividend. VHYL is the alternative but it has got worse performance than TDGB, so even with those fees TDGB still looks like a better option.
One I am not sure about is VHVG – fairly cheap for Vanguard and delivered 83% over the last 5 years, seems too good to be true, where is the catch with that one?
What I was thinking to do:
1) £40k – keep it for now as Bonds at 5% per annum
2) £100k – SWDA
3) £80k – TDGB
4) £20k – tactically 2x Leveraged SP500 or £10k 2x SP500 and £10k 2x Nasdaq. I am aware of leveraged compounding and decay risk but doing some research, it seems like 2x SP500 still outperforms vanilla SP500 by around 1.5x looking at it long term.
5) £20k – try to buy some individual stocks, maybe swing trading of FTSE100 index.
What am I missing here? Am I exposing myself to significant risks with such setup? Any suggestions and other ETFs worth checking are much appreciated.
Thanks!
You're very focused on 5 year performance is what I'm noticing.
And with that also on developed markets/US.
IIRC developing markets did better for a time in the early 2000s/following .com bubble.
I also don't think the US is driving long term policy right now with trump, their position may end up weaker than it is now.
Anyway that's my pitch to make you consider an all-world ETF.
Also splitting between two developed world ETFs seems a little silly.
The main thing you're missing is that many of these ETFs overlap heavily, so owning several of them doesn't add as much diversification as it appears. VHVG's strong performance comes largely from its heavy exposure to US large-cap growth stocks, which have been the biggest winners of the past decade. I'd also think carefully about putting nearly 20% of the portfolio into leveraged ETFs and stock picking, as that allocation could end up driving most of your portfolio's volatility and long-term results.
Throw it all in blue chip dividend stocks. Or Just Vanguard it and forget about it. Your not going to beat the market.
- Look at their cost (cost of holding it)
- It also depends on where you live what ETF would be best for you..
- Personally I prefer world etf that include emerging market e.g. VWCE
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