INVESTING STRATEGY
VDHG vs Portfolio split
Hi There When I first started investing I bought shares in VDHG and ETHI just to get some skin in the game. After I bought the first few units I decided to go down a different route and now my portfolio is made up of a A200/VGS/VGE split to try diversify my portfolio. (Still holding the initial VDHG and ETHI units) Is there any benefit to my split compared to VDHG as a whole? I don't think it's necessary to sell anything off at this point and rebalance (Happy to be wrong). I just want to set & forget at this stage while I work my way through things and have a core portfolio that does the majority of the work Thank-you
5 Comments
over 2 years ago
Hi Jamie. Interesting question.
If we look broadly at what’s happening with these holdings, the two options are roughly similar…
There is exposure to Aussie shares, global shares + emerging markets. So this tells us that there is not a huge difference between the two portfolios. Obviously the VDHG portfolio is simpler as there is only one holding, but the fees are likely to work out a bit higher than the three ETF split (this can add up to quite a bit of money over time, but the benefit is simplicity + less to manage for the investor).
You should consider whichever option is preferred out of these two, as the exposures are similar, rather than worry about one being superior to the other. Would you prefer to have the three fund split or just one holding?
I actually wrote about some of the pros and cons for this kind of decision in the following article, link below if you’re interested.
VDHG & DHHF – Is A One Fund Portfolio All You Need?: https://strongmoneyaustralia.com/dhhf-vdhg-on...
Hope that helps.
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Replyabout 2 years ago
Hey Jamie, sorry I missed your reply.
In a sense, everyone is having a stab at the dark because there’s no perfect portfolio or no correct answer (at least not in my mind). that’s why there’s no set answer to a choose your allocation question.
It has to be something you’re comfortable with personally. Given global shares are the biggest weighting in the world, it can make sense to have that as a core part of a portfolio, so that makes sense. And exposure to Aus makes sense given it’s our home country and we get franking credits etc.
On the topping up thing, the beauty of having a set allocation is when you have money to add, the one which has lagged will be ‘smaller’ in your portfolio, so you will naturally be topping up the one which is cheaper or ‘on sale’. Hope that makes sense.
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