*Official* Shiny Things club - Part 2

[limster]

Mate that is not an "ex-technology" fund. Cisco is #3 on their list of holdings!

The fund underweights technology compared to IWDA rather than 0 weight in technology. The 'value' tech stocks are inside, but the 'growth' tech stocks are heavily underweighted. I'm more worried about the pricing for the growth tech stocks.

I guess technology is also a wide term. I sort of see CISCO as more of a steady 'modern-day' utilities firm with steady dividend stream (its represented in many Value-factor ETFs), as opposed to the "FANG" type tech stocks (which are found in many growth-factor ETFs).

 

[EagleToThesSky]

only thing is that the new ETF is not big enough yet and the expense ratio is a bit higher (0.25%) vs IWDA(0.2%) + EIMI (0.18%)

 

[coolhead]

Shiny things, will you be watching the interest rate decision live?

Sent from HMD Global TA-1004 using GAGT

 

[kehyi4]

only thing is that the new ETF is not big enough yet and the expense ratio is a bit higher (0.25%) vs IWDA(0.2%) + EIMI (0.18%)

erm, afaik, VWRA is the same fund as VWRD, just a different share class. It's AUM is US$2.7B. Big enough for you?

https://www.vanguard.co.uk/adviser/investments/product.html#/fundDetail/etf/portId=9679/assetCode=equity/?overview

 

[Investnewbie82]

So is vwra the same as vwrd? Are there any other concerns like liquidity or fund size we should consider? Vwrd does have lower average daily volume than IWDA though. Is that an issue?

Ready to move DCA to vwra

 

[Shiny Things]

Thanks ST. How about a withdrawal rate of 3% then, as you prescribed in RbR? I guess the reason I'm asking is that I wouldn't really want to spend a moment longer at my day job if say I had some $2MM to my name that I could comfortably retire on, [...]

Yeah, I think 3% is more reasonable.

The other thing is, though - maybe it might just be time for a career switch? If your job drives you up the wall, the solution isn't to chuck it all in and start draining your retirement pot: the solution is to find a different career path, so you can find a job that you enjoy and still keep earning money.

Shiny things, will you be watching the interest rate decision live?

Nah, I have Actual Work to do. We pretty much know what's going to happen anyway, though: the most likely outcome is that the Fed cuts 25, and expresses a "data-dependent" willingness to cut further - but economic data over this side of the pond is looking pretty much normal, so "data-dependent" means one or two more cuts at most, I reckon.

This feels like the start of a small, shallow, "insurance policy" rate-cut cycle like we saw in '95-'96.

So is vwra the same as vwrd? Are there any other concerns like liquidity or fund size we should consider? Vwrd does have lower average daily volume than IWDA though. Is that an issue?

1) Yes, except the dividends are reinvested instead of being paid out
2) It matters how wide or narrow the spread is, but this is not something you need to think about yourself. I'll keep an eye on VWRA's spreads over the next few days and see whether they're reasonable; the average investor shouldn't have to have an opinion on spreads!

 

[Wishdom]

I like vwrd.

Distributing will mean that you do not have to incur transaction fees for selling during retirement. 2% dividends a year seems like a good rate to draw on.

It does not cost too much to reinvest the dividend during accumulation phase since there is a minimum 10 dollar fee per month.

Sent from Ilovennp using GAGT

 

[coolhead]

Yeah, I think 3% is more reasonable.

The other thing is, though - maybe it might just be time for a career switch? If your job drives you up the wall, the solution isn't to chuck it all in and start draining your retirement pot: the solution is to find a different career path, so you can find a job that you enjoy and still keep earning money.



Nah, I have Actual Work to do. We pretty much know what's going to happen anyway, though: the most likely outcome is that the Fed cuts 25, and expresses a "data-dependent" willingness to cut further - but economic data over this side of the pond is looking pretty much normal, so "data-dependent" means one or two more cuts at most, I reckon.

This feels like the start of a small, shallow, "insurance policy" rate-cut cycle like we saw in '95-'96.


1) Yes, except the dividends are reinvested instead of being paid out
2) It matters how wide or narrow the spread is, but this is not something you need to think about yourself. I'll keep an eye on VWRA's spreads over the next few days and see whether they're reasonable; the average investor shouldn't have to have an opinion on spreads!

I seriously can't believe the fed is going to cut 25 basis points. They have gone bonkers. The only economic data supporting the rate cut is 1.6-1.8% inflation rate, other than that all else looks good!

Sent from HMD Global TA-1004 using GAGT

 

[BBCWatcher]

I seriously can't believe the fed is going to cut 25 basis points. They have gone bonkers. The only economic data supporting the rate cut is 1.6-1.8% inflation rate, other than that all else looks good!

“Other than that, how was the play, Mrs. Lincoln?”

That’s a very good reason indeed to cut interest rates! But there are other reasons: ongoing trade skirmishes, confidence data that’s souring, the Brexit drama, the yield inversion, stubbornly subdued labor force participation rates, and limited real wage improvements. And Trump’s jawboning, if you think that matters. (Probably not.)

 

[oxygenoxy]

Yeah, I think 3% is more reasonable.

The other thing is, though - maybe it might just be time for a career switch? If your job drives you up the wall, the solution isn't to chuck it all in and start draining your retirement pot: the solution is to find a different career path, so you can find a job that you enjoy and still keep earning money.



Nah, I have Actual Work to do. We pretty much know what's going to happen anyway, though: the most likely outcome is that the Fed cuts 25, and expresses a "data-dependent" willingness to cut further - but economic data over this side of the pond is looking pretty much normal, so "data-dependent" means one or two more cuts at most, I reckon.

This feels like the start of a small, shallow, "insurance policy" rate-cut cycle like we saw in '95-'96.


1) Yes, except the dividends are reinvested instead of being paid out
2) It matters how wide or narrow the spread is, but this is not something you need to think about yourself. I'll keep an eye on VWRA's spreads over the next few days and see whether they're reasonable; the average investor shouldn't have to have an opinion on spreads!

Hi, for the safe withdraw rate of 3%, are we looking at a 100% equity (50/50 MSCI World/STI split) portfolio or the same 110-age % equity allocation? Since the portfolio isn't intended to run down, I suppose it should be pure equity portfolio?

Sent from OnePlus ONEPLUS A6000 using GAGT

 

[EagleToThesSky]

erm, afaik, VWRA is the same fund as VWRD, just a different share class. It's AUM is US$2.7B. Big enough for you?

https://www.vanguard.co.uk/adviser/investments/product.html#/fundDetail/etf/portId=9679/assetCode=equity/?overview

Thank you for pointing this one out. I guess I was referring to it as a new fund and the volume may not be big enough to have good liquidity.

 

[numbers]

so...all the while i am adding to VWRD. And now got a new VWRA, is it worth to sell all VWRD and switch now?

My thoughts is that if I do the switch, i will kind of lose out on the number of shares. I bought and averaged VWRD at a pretty good low cost. If I do the switch which will occur at current market highs, I would own fewer shares in VWRA because of its current high price.

The market worth would technically be the same, e.g 10k worth of VWRD switched into 10k worth of VWRA. But instead of 1000 shares of VWRD, I might only be buying 700 shares of VWRA at current price.

Is it worth doing a switch? Or what do people do in such cases for going from dist to acc ETFs?

 

[StarSeven]

so...all the while i am adding to VWRD. And now got a new VWRA, is it worth to sell all VWRD and switch now?

I have a similar question. I have been accumulating IWDA. Is it worth selling to switch to VWRA?

 

[jumboburger]

Considering US small caps. So was looking if there are equivalents of the vanguard S&P 500 ETFs listed on LSE. Couldn't really understand those i mentioned if they're the same type.

Wondering if there's any advantage holding large cap and small cap separately.

Are you looking for US small-caps, global small-caps, something else...?

And why are you looking for small-caps specifically?

 

[tangent314]

Thank you for pointing this one out. I guess I was referring to it as a new fund and the volume may not be big enough to have good liquidity.

People need to stop worrying about volume when it comes to ETFs. For ETFs, liquidity has very little correlation with volume because market makers provide most of the liquidity through lot creation and redemption.

 

[coolhead]

“Other than that, how was the play, Mrs. Lincoln?”

That’s a very good reason indeed to cut interest rates! But there are other reasons: ongoing trade skirmishes, confidence data that’s souring, the Brexit drama, the yield inversion, stubbornly subdued labor force participation rates, and limited real wage improvements. And Trump’s jawboning, if you think that matters. (Probably not.)

The other reasons are peripheral and not as important as the inflation rate.

Ongoing trade skirmish: external event that should not be considered until it is eventually factored into US economic report.
Confidence data: souring is not an issue
Brexit drama: only drama mama
Yield inversion: it's market sentiment and should not be confused with economic data
Labor force rates: this is actually double good news last month if you consider that unemployment rate went up while labor force rate went up.
Limited real wage improvement: This is an issue but hoped to be circumvented by ways to increase inflation rate.
Trump: most important factor agreed by economists that can trigger a US recession.

 

[Shiny Things]

I seriously can't believe the fed is going to cut 25 basis points. They have gone bonkers. The only economic data supporting the rate cut is 1.6-1.8% inflation rate, other than that all else looks good!

Sent from HMD Global TA-1004 using GAGT

I'm honestly a bit surprised myself that it became an issue. I genuinely think that if Donny Two Scoops hadn't opened his mouth and tried to jawbone rates lower, or even if he did but we still had Janet Yellen in the chair (she was very very good!), we wouldn't be having this discussion. I think there were plenty of arguments for keeping rates on hold, but the argument for rates to get cut seems like a bit of a reach.

My bond ETFs loved it though, so... it's not all bad.

Hi, for the safe withdraw rate of 3%, are we looking at a 100% equity (50/50 MSCI World/STI split) portfolio or the same 110-age % equity allocation? Since the portfolio isn't intended to run down,

In fact it is! Selling down your portfolio when you retire is the right thing to do.

And maintaining the "110 minus your age" rule is the right move, as well. That way, when you retire, you're mostly in low-risk bonds, and if there's another market crash, your portfolio will stay relatively stable.

so...all the while i am adding to VWRD. And now got a new VWRA, is it worth to sell all VWRD and switch now?

Nah. I'm not personally a fan of switching the whole lot, especially when the thing you're originally invested in is perfectly good. But moving your ongoing investments to the new thing is a good idea.

We had this debate when MBH was launched. People asked "should I sell all my A35 for MBH?", and the best answer was to not sell your existing A35 and incur the transaction costs, because A35 is perfectly good; but you can absolutely invest in MBH going forward.

Same thing if you decide to switch from VWRD to VWRA. You don't need to sell the VWRD, because it's perfectly good, but you can invest in VWRA going forward.

Considering US small caps. So was looking if there are equivalents of the vanguard S&P 500 ETFs listed on LSE. Couldn't really understand those i mentioned if they're the same type.

So as I mentioned below I don't think there's a real need for this - but if you want it, IDP6 on the LSE will do the job.

Wondering if there's any advantage holding large cap and small cap separately.

Mmm... I used to do this (I held a small lump of a midcap ETF as well as my global-equities ETFs), but I decided it wasn't worth the hassle of managing the extra position, and it doesn't really deliver any more returns, because it's such a small slice of your total portfolio. I wouldn't bother.

 

[chrisloh65]

The problem is, not all ETFs are liquid and not all market makers are actively providing liquidity in transactions for all their ETFs.

People need to stop worrying about volume when it comes to ETFs. For ETFs, liquidity has very little correlation with volume because market makers provide most of the liquidity through lot creation and redemption.

 

[tangent314]

That's why you look at the spread of the ETF and the liquidity of the underlying stocks for the liquidity of the ETF, instead of the volume.

 

[linuskltan]

I just found out that Feb/Mar this year, SPDR launched an 0.12% expense ratio accumulating Ireland-domiciled MSCI World UCITS ETF (LSE: SWRD (USD) / SWLD (GBP)). Current AUM reached USD 315.09 million.
https://uk.spdrs.com/etf/spdr-msci-world-ucits-etf-SPPW-GY
Seems like a cheaper alternative vs iShares's IWDA with 0.20% expense ratio. Worth considering switching to this?