ETF Portfolio — IC Top 50 ETFs

IC ETF Top 50
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3 Responses

  1. Ritsut says:

    Hi Mike, I been having a quandary over setting up my my own portfolio structure and stumbled across your website.

    One conclusion I have come to is that there is no point be it OEIC, investment trusts, ETF, etc; to invest in the global sector. As pretty much as they will be duplicated by holding funds in sectors : US, Europe, U.K. Asia and emerging markets. In essence are you not increasing your fees, and more time & cost portfolio in management by holding funds in global sector?

    The only advantage of global funds to me, would be to hold this as one component of heavy core holding in a small portfolio. Love to hear your thoughts.

    It’s been interesting reading so keep up the good work.

    • Mike Rawson says:

      Hi Ritsut,

      Welcome to the site. The answer to your question is different for active and passive funds, but first we need to clear up your point about duplication.

      You aren’t duplicating global and sector funds, you are substituting them. When you allocate 10% to global funds, you take it away from another sector. You only increase your fees when you swap a cheap fund for an expensive one, and you would need a good reason for that.

      Your point about more time to manage a complex portfolio is valid, and investors who don’t want to spend much time on their portfolio will prefer fewer funds. I enjoy the process, and I like to hold a diversified set of funds. I’m not a fan of the current vogue for three funds only, but as with everything, it’s your call.

      So why hold global funds at all?

      With active funds (OEICs and ITs) it’s because the fund manager has a wider brief. A US fund has to stay in the US, but a global fund can sell down the US when it looks overpriced (as it has recently).

      With passive funds (ETFs and index funds) it’s either because the fund is cheaper than all the sector funds you would hold instead, or because your portfolio doesn’t have enough slots to hold all the sector funds.

      Hope this helps.


  1. June 1, 2015

    […] Last week we took a look at 27 of the equity ETFs on the IC list, covering all regions except for Japan and Asia Pacific. Today we’ll look at those areas, along with bonds, commodities and private equity. […]

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ETF Portfolio — IC Top 50 ETFs

by Mike Rawson time to read: 3 min