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Need suggestions on VTI & VEU alternatives that are Ireland domiciled & accumulating

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  1. #1

    Need suggestions on VTI & VEU alternatives that are Ireland domiciled & accumulating

    I initially wanted my portfolio to be 60% VTI and 30% VEU for long term hold. I combed through a lot of sources to find alternatives that are Ireland domiciled to replicate this. Turns out, there really won't be an exact match!

    I want the ETFs to be accumulating and read that it is/might be better to purchase ETFS from the same index provider. But the suggested combinations I found to replicate my initial portfolio all seem to be a mix of different index providers:


    • VWRA (or VWRP) + R2SC, TER 0.52
    • IWDA + R2SC, TER 0.5
    • VWRA (or VWRP) + WSML, TER 0.57
    • IWDA + WSML, TER 0.55
    • VWRA (or VWRP) + CSPX, TER 0.29
    • SWRD + EIMI + CSPX, TER 0.37
    • IWDA + EIMI + CSPX, TER 0.45




    1. I'm still incredibly new to this and learning. Beyond going for the lowest TER, I'm uncertain which combination is the closest match to my initial 60% VTI and 30% VEU combo. Would anyone be able to chime in on this please?
    2. For now I have no idea which part of the country I'll end up living, so it's difficult to determine which currency would be more convenient for me. If I move to US or UK, my setup will likely change. Until then, is it best that my portfolio have ETFs denominated in GBP and USD e.g. I should get VWRA and VWRP? Even though their underlying assets are the same...


    Thanks so much in advance!

  2. #2

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    Can I be a contrarian and very humbly suggest that you stop overthinking this unless you're at a seriously high level of net worth where fractions of a cent make a difference.

    For an all world all cap ETF, your dividends will not be significant enough. Perhaps if you use invest in something like VHYD or other high dividend ETFs then it makes a difference. Again, do your math..

    While there are some issues related to estate tax in the US, I am of the opinion that one of the most effective ETFs is VT - you may make a few points on the WHT by going to an Irish vehicle, but you get something that is:

    - Expense Ratio: 0.08%
    - Higher liquidity that the UK listed ones
    - One fund to rule them all ...

    Calculate the gain in reduced WHT with the loss in higher expense ratios if you want to look at it with a magnifying glass (I have not).

    You can always sell down and switch to something more effective as you age, plan to move, retire, need income v/s need growth.

    I use AOA (there are other iShares AOR/M/K options) quite often as a cash store - i.e. put uninvested but investable cash (not emergency cash etc etc) in there for 3-6 months as I figure out what I want to do or wait for an event or whatever. I do think if you're not paranoid about dying tomorrow, that is a better one-fund-to-rule-them-all ..

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  3. #3

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    +1, and if you have personal preferences to specific market/region, add it as satelite to this core and balance the weightage by % allocation..

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  4. #4

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    Honestly if you are new at this and don't want to overcomplicate things stick with VWRA and be done with it.

    Then spend / waste your time figuring out which next crypto currency is going to be the biggest.

    shri, Sith and Mapleleafgirl like this.

  5. #5

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    VWRA would be indeed the simplest solution.
    If you really want to try to lower the ER even more, you can do IWDA + EIMI (both iShares) or even cheaper SWRD + EIMI (combination of SPDR and iShares so it is not a perfect match but then who really cares?

    And I disagree with @shri it does make quite a difference if you go the US route.
    Besides the threshold of Estate Tax (60k USD) the 15% less withholding tax is significant and outweighs the lower ER of the US ETF's.

    Simple calculation: Most global ETF's have a dividend around 2%, 15% of 2% is 30 bps and 30% of 2% is 60 bps. So that expense ratio of 0.08 of VT went up to 0.68 bps.

    Correct me if I'm wrong in my calculations though (it was just a quick top of my head thing)

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  6. #6

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    VWRA - TER - 0.22%
    VT - TER - 0.08% + Difference in WHT (30bps) = 0.38%

    Extra cost between VWRA & VT (Assuming dividend yield is equal) = 0.16%

    Is it worth the atrocius liquidity risk for a starter small portfolio? I am not too sure..
    I am not even counting additional cost of spread for most starter portfolios which are usuallyt DCAing monthly/quarterly (Havent backtested this properly, just anacdotal on few occasions)..

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  7. #7

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    Quote Originally Posted by ndt:
    VWRA - TER - 0.22%
    VT - TER - 0.08% + Difference in WHT (30bps) = 0.38%

    Extra cost between VWRA & VT (Assuming dividend yield is equal) = 0.16%

    Is it worth the atrocius liquidity risk for a starter small portfolio? I am not too sure..
    I am not even counting additional cost of spread for most starter portfolios which are usuallyt DCAing monthly/quarterly (Havent backtested this properly, just anacdotal on few occasions)..
    Is there liquidity risk with VWRA?

    Honestly unless you are American I would strongly recommend staying away from most US ETFs taking int account the WHT and the Estate Duty risk.
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  8. #8

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    Quote Originally Posted by pin:
    Is there liquidity risk with VWRA?

    Honestly unless you are American I would strongly recommend staying away from most US ETFs taking int account the WHT and the Estate Duty risk.
    VWRA has an AUM of 4 billion USD so I agree with you liquidity risk is a non issue for this one.

    And agree with your second statement!
    Mapleleafgirl likes this.

  9. #9

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    Is there liquidity risk with VWRA?

    Lol one extra word 'Risk' changes the meaning of it, anyway what i meant was liquidity might get paltry for many of these ETFs during volatile market which in turn increase the cost of spread and investor might need to pay that extra cost in case there is a need to liquidate it during such time..
    Mapleleafgirl likes this.

  10. #10

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    Quote Originally Posted by Mapleleafgirl:
    [*]For now I have no idea which part of the country I'll end up living, so it's difficult to determine which currency would be more convenient for me. If I move to US or UK, my setup will likely change. Until then, is it best that my portfolio have ETFs denominated in GBP and USD e.g. I should get VWRA and VWRP? Even though their underlying assets are the same...[/LIST]

    Thanks so much in advance!
    To give my opinion on this part. If you have no idea where you end up and you are in HK at the moment, I would always go for USD. As this is pegged with the HKD you have a very low currency risk (for the time being)
    Mapleleafgirl likes this.

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