Official Shiny Things thread—Part III

[coralsg]

I decided on VHVE/VFEA rather than VWRA due to the expense ratio, (0.12/0.22 aggregating at 0.132) vs a flat 0.22.

That said, IB offers rather low commission fees with a min fee of USD10 every month inclusive of commissions. So I don't mind trading on 2 ETFs.

Hi,

Just curious, the Vanguard series of indices are based on FTSE, while IWDA (iShares MSCI) is based on MSCI. May i understand, other than cost considerations, have you considered other differences across the 2 ETFs that makes you choose Vanguard? Whether you can share any findings if you have?

Benchmark performances @ 29 Feb 2020:-
MSCI (1/3/5/10 yrs) : 4.63 / 7.24 / 5.88 / 8.75
FTSE (1/3/5/10 yrs) : 3.93 / 6.86 / 5.55 / 8.09


iShares Core MSCI World UCITS ETF
1 Broad exposure to a wide range of global companies within 23 developed countries
2 Covering 85% of the listed equities in each country
3 Use at the core of a portfolio to seek long-term growth

FTSE All World Index
The index measures the market performance of large- and mid-capitalisation stocks of companies located around the world.
Includes approximately 3,900 holdings in nearly 50 countries, including both developed and emerging markets.
Covers more than 95% of the global investable market capitalisation.



www ishares com/uk/individual/en/literature/fact-sheet/swda-ishares-core-msci-world-ucits-etf-fund-fact-sheet-en-gb.pdf

americas vanguard com/institutional/mvc/detail/etf/overview?portId=9679&assetCode=EQUITY##performance

 

[coralsg]

I understand the world investing concept, but I find that the allocation to China seems too small (approx 4% in VWRA, 0% in IWDA). HK approx 1% in both VWRA and IWDA.
May I know if Shiny has shared any views previously on being tactically overweight China, as a country versus the world benchmarks?

Secondly whether he has shared any instrument best to do get exposure to China?


americas vanguard com/institutional/mvc/detail/etf/overview?portId=9679&assetCode=EQUITY##portfoliodata

www ishares com/uk/individual/en/literature/fact-sheet/swda-ishares-core-msci-world-ucits-etf-fund-fact-sheet-en-gb.pdf

 

[rrr2015]

interesting ~ can IWDA + EIMI with VWRA?

VWRA will automatically rebalance across the stocks listed in "emerging" and "developed" economy markets based on market capitalization, and that'll tend to improve the long-term yield. I think that's worth the ~8.2 basis points per year.

 

[InterestingStuff]

I understand the world investing concept, but I find that the allocation to China seems too small (approx 4% in VWRA, 0% in IWDA). HK approx 1% in both VWRA and IWDA.
May I know if Shiny has shared any views previously on being tactically overweight China, as a country versus the world benchmarks?

Secondly whether he has shared any instrument best to do get exposure to China?


americas vanguard com/institutional/mvc/detail/etf/overview?portId=9679&assetCode=EQUITY##portfoliodata

www ishares com/uk/individual/en/literature/fact-sheet/swda-ishares-core-msci-world-ucits-etf-fund-fact-sheet-en-gb.pdf

msci emerging market etf , or just buy tencent , baba , they are the market.

 

[Wishdom]

Hi guys, it's been a while since I was here. Hope you guys are doing well.

I just dropped my annual bonus into vwrd . I *think* it is pretty timely considering how much lower it is than my avg price. (my average was 85, purchased 12k worth at 71).

That being said, I would have dropped the lump sum no matter how the markets are flipping.

I think this can be a good hint of how my steely balls are in the face of a market drop. 100% vwrd for the win.

Here is a picture of my losses about 1/2 weeks back. 18k lost. Meh.

Sent from Ilovennp using GAGT

 

[flowerpalms]

Since you lump sum instead of dca, be prepared to bear the risk

Hi guys, it's been a while since I was here. Hope you guys are doing well.

I just dropped my annual bonus into vwrd . I *think* it is pretty timely considering how much lower it is than my avg price. (my average was 85, purchased 12k worth at 71).

That being said, I would have dropped the lump sum no matter how the markets are flipping.

I think this can be a good hint of how my steely balls are in the face of a market drop. 100% vwrd for the win.

Here is a picture of my losses about 1/2 weeks back. 18k lost. Meh.

Sent from Ilovennp using GAGT

 

[Wishdom]

Since you lump sum instead of dca, be prepared to bear the risk

Statistically, you get better odds when you do a lump sum over DCA. You know, opportunity cost, transaction fees and all.

DCA is used only because it is more practical; people get paid monthly and they can only invest when they have money. In a way, you can see DCA as a cumulative form of periodic lump sum investments... I'm going sideways already. The point is, the best time to invest your money is now.

Its been a while flowerpalms, but you have not changed from parroting verbatim like it's the gospel. You need enlightenment, not memorisation.

Sent from Ilovennp using GAGT

 

[Jirachi]

Statistically, you get better odds when you do a lump sum over DCA. You know, opportunity cost, transaction fees and all.

DCA is used only because it is more practical; people get paid monthly and they can only invest when they have money. In a way, you can see DCA as a cumulative form of periodic lump sum investments... I'm going sideways already. The point is, the best time to invest your money is now.

Its been a while flowerpalms, but you have not changed from parroting verbatim like it's the gospel. You need enlightenment, not memorisation.

Sent from Ilovennp using GAGT

DCA works. Lump-sum also works. Cannot be hard upon one style of strategy.

The flowerpalms keep asking people to DCA without a proper strategy for times like this.

 

[lingalong]

Has anyone tried trading futures on IBKR? Any reviews?

 

[streetfighter]

Is today's Dow rebound going to be a dead cat bounce again?

 

[Okenba]

Main difference is how they define developed and emerging markets which lead a few countries to be in different baskets depending on which index you follow.

Your comparison between MSCI World and FTSE All World is not an apples to apples comparison. MSCI World is actually a developed market index. You can see this in its description. This is also the reason for it outperforming the FTSE All World. Developed markets in general have outperformed Emerging markets.

Hi,

Just curious, the Vanguard series of indices are based on FTSE, while IWDA (iShares MSCI) is based on MSCI. May i understand, other than cost considerations, have you considered other differences across the 2 ETFs that makes you choose Vanguard? Whether you can share any findings if you have?

Benchmark performances @ 29 Feb 2020:-
MSCI (1/3/5/10 yrs) : 4.63 / 7.24 / 5.88 / 8.75
FTSE (1/3/5/10 yrs) : 3.93 / 6.86 / 5.55 / 8.09


iShares Core MSCI World UCITS ETF
1 Broad exposure to a wide range of global companies within 23 developed countries
2 Covering 85% of the listed equities in each country
3 Use at the core of a portfolio to seek long-term growth

FTSE All World Index
The index measures the market performance of large- and mid-capitalisation stocks of companies located around the world.
Includes approximately 3,900 holdings in nearly 50 countries, including both developed and emerging markets.
Covers more than 95% of the global investable market capitalisation.



www ishares com/uk/individual/en/literature/fact-sheet/swda-ishares-core-msci-world-ucits-etf-fund-fact-sheet-en-gb.pdf

americas vanguard com/institutional/mvc/detail/etf/overview?portId=9679&assetCode=EQUITY##performance

 

[Knightoftheblackrose]

IMHO It has been a dead cat bounce all along.

The overall trend direction is still intact, downwards because of the devastating economic impact of Covid-19.

The so called “ rally” was ( and still is) a temporary retracement.

The market seldom goes straight down.

Is today's Dow rebound going to be a dead cat bounce again?

 

[coralsg]

I'm aware of the universe differences across VWRA and IWDA; I just hope to get some guidelines as to which is more suitable for what type of investor.

For completeness I have also included iShares MSCI ACWI UCITS ETF USD benchmark performance (highest cost at 0.60% p.a)


Benchmark performances @ 29 Feb 2020:-
MSCI (1/3/5/10 yrs) : 4.63 / 7.24 / 5.88 / 8.75 (Developed)
FTSE (1/3/5/10 yrs) : 3.93 / 6.86 / 5.55 / 8.09 (Developed + Emerging)
MSCI (1/3/5/10 yrs) : 3.89 / 6.96 / 5.55 / NA (Developed + Emerging)

MSCI (1/3/5/10 yrs) : -1.88 / 4.89 / 2.73 / 3.18 (Emerging)
MSCI (1/3/5/10 yrs) : 3.29 / 10.29 / 5.49 / 5.65 (China) 40.21% EM
MSCI (1/3/5/10 yrs) :16.30 / 9.02 / 7.33 / 8.31 (Taiwan) 12.33% EM
MSCI (1/3/5/10 yrs) :-12.77 / -0.63 / 1.25 / 3.79 (Korea) 11.30% EM
MSCI (1/3/5/10 yrs) :0.88 / 4.82 / 1.39 / 3.42 (India) 7.54% EM
MSCI (1/3/5/10 yrs) :-9.60 / 2.80 / 4.93 / -2.33 (Brazil) 4.76% EM
MSCI (1/3/5/10 yrs) :-18.29 / -5.25 / -5.76 / 1.10 (South Africa) 3.63% EM
MSCI (1/3/5/10 yrs) :13.26 / 10.61 / 11.36 / 2.43 (Russia) 3.24% EM
MSCI (1/3/5/10 yrs) :-9.65 / 7.58 / NA / NA (Saudi Arabia) 2.63% EM
MSCI (1/3/5/10 yrs) :-20.17 / 0.33 / -0.24 / 8.40 (Thailand) 2.17% EM
MSCI (1/3/5/10 yrs) :-14.59 / -0.42 / -4.60 / 1.84 (Malaysia) 1.85% EM
MSCI (1/3/5/10 yrs) : -2.38 / -1.19 / -4.96 / 0.20 (Mexico) 1.81% EM
MSCI (1/3/5/10 yrs) :-15.32 / -2.33 / -2.87 / 2.13 (Indonesia) 1.48% EM


iShares Core MSCI World UCITS ETF
1 Broad exposure to a wide range of global companies within 23 developed countries
2 Covering 85% of the listed equities in each country
3 Use at the core of a portfolio to seek long-term growth

FTSE All World Index
The index measures the market performance of large- and mid-capitalisation stocks of companies located around the world.
Includes approximately 3,900 holdings in nearly 50 countries, including both developed and emerging markets.
Covers more than 95% of the global investable market capitalisation.

The MSCI All Country World Index (ACWI) tracks stocks from developed and emerging countries worldwide. It covers securities across large and mid cap size segments and consists of 49 country indices, of which 23 are developed and 26 are emerging markets.

www ishares com/uk/individual/en/literature/fact-sheet/swda-ishares-core-msci-world-ucits-etf-fund-fact-sheet-en-gb.pdf

americas vanguard com/institutional/mvc/detail/etf/overview?portId=9679&assetCode=EQUITY##performance

www justetf com/servlet/download?isin=IE00BK5BR626&documentType=MR&country=GB&lang=en

www ishares com/us/products/239637/ishares-msci-emerging-markets-etf

www ishares com/us/products/239619/ishares-msci-china-etf

 

[hwckhs]

FTSE (1/3/5/10 yrs) : 3.93 / 6.86 / 5.55 / 8.09 (Developed + Emerging)
MSCI (1/3/5/10 yrs) : 3.89 / 6.96 / 5.55 / NA (Developed + Emerging)

The FTSE has slightly wider coverage than MSCI (95% vs 85%), but performance is similar among the 2 for a long term investor. Why think so hard? What exactly are you worried about?

EDIT:

FTSE All World vs MSCI All Country World Index:

Make your own conclusions

 

[coralsg]

The FTSE has slightly wider coverage than MSCI (95% vs 85%), but performance is similar among the 2 for a long term investor. Why think so hard? What exactly are you worried about?

EDIT:

FTSE All World vs MSCI All Country World Index:

Make your own conclusions

DM = Developed Markets, EM = Emerging Markets

Thanks for the charts, I was considering whether to go for DM only or DM+EM or DM + China.

My doubts were:
1) I like the historically higher returns of DM. but question is that going to continue for next 10 years? Or should I invest some in EM instead. I'm unclear why doesn't the concept of higher risk (EM markets) higher return (EM benchmark returns) show up.
2) As the performance of EM markets does not look risk compensating compared to DM, perhaps with some exception (I guess China ??) so I'm thinking to do country overweight vs benchmark but lack a framework how to structure that. (perhaps I can base on world GDP share??).

 

[babyrobo]

Hi, would like to know between SC, Vickers or IB would you recommend to buy say $10k of VWRD and/or IWDA via? & why?

 

[BBCWatcher]

1) I like the historically higher returns of DM. but question is that going to continue for next 10 years? Or should I invest some in EM instead.

These distinctions only refer to where the stocks are listed (in which stock markets), not where the companies represented by the stocks do business. There's a big difference between those two concepts, and the difference is growing, not shrinking.

Oversimplifying only slightly, what seems to be happening is that the top stock markets are where the most promising companies go to list and to raise capital. For example, if you're a fantastic food company that primarily sells its products in the Philippines with about 20% in Vietnam, yes, you could list your stock in Manila, but if you're really good then you might list in Hong Kong, New York, or London instead.

I'm unclear why doesn't the concept of higher risk (EM markets) higher return (EM benchmark returns) show up.

Really? Roulette is a high risk casino game, but average returns are negative. (The casino operator must win on average.)

See above for a possible explanation.

I would also point out that high profits (and high long-term profit expectations) contribute to high stock valuations. If you're a company in a huge country that sells more widgets than anybody but struggles to eke out a fraction of a penny of profit on each widget, then that sort of company is probably not going have a high valuation. A lot of people get confused and think that something "big" necessarily will have high value. No, not really. Big profits are what matter.

2) As the performance of EM markets does not look risk compensating compared to DM, perhaps with some exception (I guess China ??) so I'm thinking to do country overweight vs benchmark but lack a framework how to structure that. (perhaps I can base on world GDP share??).

Don't think too hard about this. In short, both IWDA and VWRA are fine. Pick your favorite among those two, and don't worry about it.

 

[cassowary18]

Hi, would like to know between SC, Vickers or IB would you recommend to buy say $10k of VWRD and/or IWDA via? & why?

Vickers has custody charge. No no.

Between SC or IB, it depends on how often you're buying. If it's lump sum purchase, SCB. If it's monthly, or you can hit USD 100,000 quickly, IB.

 

[chickenessence]

Hi all,

Any thoughts around changing asset allocation to improve returns through bull and bear markets?

For example, if I'm 40 years old, my recommended asset allocation between stocks and bonds is 70% and 30%. And I have 25 years until retirement. In this current climate, because the stock market has crashed (which will also ultimately rebound in 25 years time), should I shift my allocation to 90% stocks and 10% bonds?

Assuming 5 years later the market recovers, I will shift my allocation back to 70-30 stock-bond allocation. Makes sense? Comments?

Thanks!

I have heard from people saying that having bonds serve as a parachute in time of crisis. Your overall portfolio profit/loss % will not swing down as much compared to others with 0% bond.

I fully agree. But in my opinion, Bonds can serve as both parachute and rockets or war chest in time of crisis. Convert your bond holdings into stocks when you feel the price is low enough to take the plunge. When market recover you will gain much more than if you were to do nothing.

That said, you have to be able to take the psychology impact of price falling even lower for the months/years to come; No one can tell you where/when the bottom will be. Else you may have sleepless nights for many months to come

Not sure if this has been asked before.
MBH Bond is suppose to be the “cushion” during stock market crash. But why MBH also drop similarly significant in this month of March?

Or this drop in bond is also normal in all other financial crisis?
any reason for the drop? Fear that Corporate unable to perform?

 

[ranchfarm]

Not sure if this has been asked before.
MBH Bond is suppose to be the “cushion” during stock market crash. But why MBH also drop similarly significant in this month of March?

Or this drop in bond is also normal in all other financial crisis?
any reason for the drop? Fear that Corporate unable to perform?

After observing how MBH performs recently, I'll only buy government bonds. I lost my faith in corporate bonds in times of crisis.