I am interested to hear the kind of strategies people use when investing.
I love that with InvestEngine its so easy to create portfolios and see the kind of diversification you can create with a handful of ETFs.
Personally my go to method for investment strategy is the Core & Satellite.
I have a all world index fund (HMWO) as the core of the portfolio (60%) and supplemented the portfolio out with other ETFs. Its given me great diversity to different assets with just a portfolio of 5 ETFs.
I’m pretty boring and just have the one ETF - V3AB. I like the fact it has the small caps and emerging markets in there. I could probably replicate it cheaper by using a few different ETFs but I’d constantly be second-guessing myself over the weightings of each so a Global All-cap in one fund suits me nicely
What do you think about ESG?
In my opinion it makes sense going with one fund. Also got to take into consideration about the percentages of weighting.
Balancing it constantly to represent would be difficult so that little more fund fee is worth it in my opinion.
I agree about the weightings. I just know that if, after say 6 months or so, one of the funds was significantly outperforming (and thus altered the original weightings) that I’d be very tempted to tinker with it and then, sods law, it would reverse and it curse myself for changing. By just sticking with the one fund it takes any temptation to faff out of my hands.
As for ESG - I do agree very much with the concept but I do see a lot of shortcomings as it stands. Firstly, I believe there are (at least) two ESG ratings, FTSE and MSCI (I think) which have different criteria. So some companies will be excluded from one index but not another so ESG clearly means different things to different people. Secondly, I think the criteria as it stands is rather flimsy and I am fully aware that there will be some dodgy companies within V3AM for example. That said, I do believe going forward that the criteria will become tighter and there will be more incentives for companies to follow it and those that don’t will lose out.
My main reason for choosing V3AM though was more to do with the fact that it is a global tracker with Large, Mid and small cap in there. VWRL is great but doesn’t include small caps so I am happy to pay 0.02% extra for 2000 extra companies and greater exposure in one, easy fund. I guess I thought it was the closest thing to the Vanguard FTSE All Cap Index you can get in one single ETF. I believe you can only invest in that directly through Vanguard?
Much easier just sticking with one fund.
Ive wrote a couple articles about ESG. Upon investingation its incredibly vague.
Even with managed ESG funds its down to the fund manager.
MSCI have 9 different categories for ESG as it is.
Thread ‘ESG/sustainable investing’ ESG/sustainable investing | Sensible Investors
Just waiting for ESG to become more refined. Personally i hold sin stocks anyway so ESG doesnt mean much to me.