ETF suggestions

[StOmer]

Hi,
Due to platform charges for OEICS my portfolio holds Investment Trusts (IT's) with the annual charge at £0 and dealing fees of £11.95 plus stamp duty. Currently, the discounts on IT's are very low and to me, this adds to current market risks. I am thinking perhaps ETF's may be a better choice for new purchases as charges for those are free of stamp duty whilst the holding fee also remains £0.

I would probably opt for Vanguard LifeStrategy 100 or 80 but the costs with either my current platform or Vanguard direct would be higher than I currently have from my IT's held with HL.

I would be grateful for any suggestions for ETF portfolio suggestions, I am looking for growth. I have not found much in the way of sample ETF portfolios to guide me so far.
Thanks

[Kantwebefriends]

Have you tried the archives on the monevator blog?

[StOmer]

Have you tried the archives on the monevator blog?

Thanks for that, yes I have looked at that site often but have never been particularly convinced by it. Some posts are good reads with excellent comments but often it appears a bit wooly, for example, one page on passives, offers me some 100 different funds to choose from.

[Hariseldon58]

The life strategy from Vanguard is good but without changing platforms then how about a similar underlying portfolio, Vanguard VUKE for the FTSE, Vanguard VEVE for developed world and VFEM for emerging markets.
The ratio would be something like 2 parts VUKE, 7 parts VEVE and 1 part VFEM

You could use VWRL instead of the mix of VEVE and VFEM but it is more expensive.

My personal preference is ISF ( cheaper than VUKE) VMID for the FT250 more uk centric with VEVE and leave out VFEM ( personal bias)


There would potentially be a bond component, they go for hedged bond funds and gilts. NS&I income bonds give security and a higher yield than gilts....

My personal portfolio is a reasonable size and I throw in a few extras, WLDS ( small global companies) VVAL (global value) VHYL and WQDS (global yield, a value punt, with the latter having a nod towards ‘quality income’) This constitutes the factor nod.

Finally my personal world portfolio VUSA ,(S&P500) VERX (Europe ex UK) and VAPX (Asia Pacific ex japan) another chunk of VMID and ISF( uk indices) I am not convinced that either Japan or Emerging Markets align my interests with public equities for a variety of reasons and 30 years of investing suggests I can ignore them, I don’t have to fish in every pool.

I have used Investment Trusts extensively but went largely down the ETF route a few years ago, although I did take a substantial punt into ITs last autumn, mistakenly thinking that Brexit would likely resolve itself in late March, well that did not happen and I am back with ITs, note to self, market timing is tough...

[StOmer]

@Hariseldon58 Thank you for that, I will spend some time going through those suggestions. Much appreciated.

[MastG]

I chose
hmwo for developed world 0.15% ter
emim for emerging market 0.18% ter
gils uk gilts 0.07 % ter

I also use isf ftse 100 0.07% ter and vhyl high dividend yield 0.29% ter


hmwo and emim are msci based so dovetail together.

[Villa]

Any thoughts on adding a small chunk of VEMT or VDET (emerging markets government bonds) as an additional bit of diversification?

[StOmer]

Quick update, thanks for your helpful replies. I have now moved to around 50% ETF's and 50% IT's in the portfolio. I have firstly sorted out the main core which is now 20% each of Vanguard World (VWRL), HSBC World (HMWO) and iShares World (SWDA). I guess just one would have been best and perhaps VEVE & VUKE as suggested better than VWRL but I wanted to forget about having to rebalance them. These were financed from sales of Foreign & Colonial (FCIT), JPMorgan Asian Investment Trust (JAI), Pacific Horizon Investment Trust (PHI) and JPMorgan Global Core Real Assets (JARA)

The next step is to consider the rest of my IT's and decide whether to add further ETF's or add to the current flock plus perhaps a bond ETF although I am unsure if UK Gilts or Global Bonds would be best. Currently holding and reviewing Finsbury Growth (FGT), Brunner (BUT), Murray Global (MNP), Mid Wynd (MWY) and Scottish Mortgage (SMT).

As mentioned previously, the move to ETF's is due to my being wary of the current low discounts on IT's and in some cases their gearing as the markets keep climbing. Sadly my broker (HL) would impose a high fee if I switched to funds which would change my annual fees from £90 over 4 accounts to more than 4 figures, that seems unreasonable to me.

Thanks again for the earlier advice.
Mickey

[richfool]

The next step is to consider the rest of my IT's and decide whether to add further ETF's or add to the current flock plus perhaps a bond ETF although I am unsure if UK Gilts or Global Bonds would be best. Currently holding and reviewing Finsbury Growth (FGT), Brunner (BUT), Murray Global (MNP), Mid Wynd (MWY) and Scottish Mortgage (SMT).

Thanks again for the earlier advice.
Mickey

Re MNP, - I presume you mean Martin Currie Global Portfolio Trust (MNP)?

[MartynC27]

I have firstly sorted out the main core which is now 20% each of Vanguard World (VWRL), HSBC World (HMWO) and iShares World (SWDA). I guess just one would have been best and perhaps VEVE & VUKE as suggested better than VWRL

I think the addition of VUKE was suggested previously in order to mimic Vanguard Lifestrategy which is overweight UK Equities.

A Global Bond ETF is Vanguard Global Aggregate Bond ETF (VAGP) containing over 4200 Global Bonds which costs 0.1% and is hedged to GBP. I think this is a good one stop shop for an ETF Bond component for a portfolio which can be added in a proportion to suit your required level of Risk.

[StOmer]

The next step is to consider the rest of my IT's and decide whether to add further ETF's or add to the current flock plus perhaps a bond ETF although I am unsure if UK Gilts or Global Bonds would be best. Currently holding and reviewing Finsbury Growth (FGT), Brunner (BUT), Murray Global (MNP), Mid Wynd (MWY) and Scottish Mortgage (SMT).

Thanks again for the earlier advice.
Mickey

Re MNP, - I presume you mean Martin Currie Global Portfolio Trust (MNP)?

Yes, apologies for missing that.

[StOmer]

I have firstly sorted out the main core which is now 20% each of Vanguard World (VWRL), HSBC World (HMWO) and iShares World (SWDA). I guess just one would have been best and perhaps VEVE & VUKE as suggested better than VWRL

I think the addition of VUKE was suggested previously in order to mimic Vanguard Lifestrategy which is overweight UK Equities.

A Global Bond ETF is Vanguard Global Aggregate Bond ETF (VAGP) containing over 4200 Global Bonds which costs 0.1% and is hedged to GBP. I think this is a good one stop shop for an ETF Bond component for a portfolio which can be added in a proportion to suit your required level of Risk.

Thanks MartynC27,
I will take a look at VAGP. I left out VUKE due to my holding in Finsbury Growth Trust and the UK component within the other Global IT's currently owned. I will take a good look at that one but may just stick with the global weightings from SWDA, HMWO and VWRL as I sell down the IT's and possibly add VAGP to hold just 4 or possibly 5 ETF's. Part of me would like to move back into IT's should the discounts widen considerably but by then I may be convinced that passive is better.