Head to Head: Investing in the SAME companies as an ETF (VAS)

[@Kundun-9]

Great comparison, Great analysis and thank you for sharing this information Tracy. Another simple but GREAT video 😊 Always your #1Fan

[@milisha98]

Very interesting. I think weightings are a big reason. BHP is down 16% this year (barely grown over 5 years), and until the other day was the highest weighted stock in VAS. And secondly, as you eluded to, there's "Survivorship Bias" at play. Meaning VAS Top 10 from 10 years ago isn't Top 10 VAS now. The poorer performing companies have dropped out of the top 10, and the best replacements have come in. By using VAS as of today, you're using hindsight as 20/20 vision, but there would have been no way of knowing the 'right' stocks to pick 10 years ago. So the fairer comparison is using VAS from 10 years ago as the basis for your Top 10 stocks. On the plus side (on a personal note), I tend to hold individual stocks (most of which are in that Top 10). I don't hold ETFs (except international ones domiciled for tax in AU) because reporting is more of a pain.

[@expatincites]

Always love your comparisons. Great to see the differences and elements of risk at play over a decent time periods (5 years). Keep it coming mate!

[@TwoBobWatch-k3y]

We had a financial plan prepared last year which recommended disposal of all direct shares held and reinvestment in ETF's and a wrap account. I declined to accept the advice due to the sheer quantum of (disclosed and undisclosed) fees. I think your video illustrates that I made the right decision. I am sure I won't get it right all the time but i can at least make semi informed decisions with the right research.

[@TNTsAssissin]

OMG Tracy, u just blew my investment strategy out of the water with that one…. U The girl. 😎👍

[@catherineden5005]

Always waiting for your video, good analyse

[@adamabbas8876]

Hindsight is 20/20 😊. If only I knew what the top 10 will be in 10 years, I would definitely invest in them.

[@SenorNavel]

I absolutely love how you go into detail about all this. Please do some other ETF's. Can you do VAS from 10 years ago compared to VAS now and their top companies? Thanks.

[@Joel-t1y]

Great video Tracey! Very eye opening and would also love to see this with the NDQ. 🙌🏻

[@irenehoimes7186]

Interesting info Tracey. I've been wondering the same thing about etfs and individual holdings just this week 😂 ... great timing 👍

[@BenHeffernanArt]

Ha that's amazing. In two way as I just asked a question in another video why would I invest in an etf if I can just do it myself? Then this video comes out on the same day! Thanks Tracey I find you really easy to understand and I wish I started years ago, ah well.

[@robsalvv5853]

Well, I guess with one $10k buy of the ETF you get a piece of all the underlying equities for one brokerage fee, and similarly every subsequent purchase gives you a piece of them all for the one brokerage fee and so on. You don’t need to rebalance either. And DRP works simply too. While the other way requires multiple individual buys and their individual brokerage fees, and each time you want to add to your holding you have to add piecemeal paying the brokerage fee for each purchase, and need to manage the individual weightings and rebalancing. One way or another there will be an overhead… Each way has its pros and cons.

[@MK-lm6hb]

@@robsalvv5853 Brokerage fees are nowadays quite low and some brokers do not charge any fees on purchases (CMC Markets, on purchases of up to $1,000). If fees are payable, they are paid in both cases described by you - directly on individual parcels and indirectly if shares are held through an ETF.

[@pimpshark]

@@robsalvv5853 Even though you are paying a brokerage fee on each individual stock. You are not paying any ongoing commission as you do with ETFs. So wouldn’t that balance it out ?

[@budise10]

Great insight can you do it for NDQ?

[@Rick-kj9dd]

Good research Tracey. $10,000 difference in capital gain return over VAS in 10 years. The 5 year return in VAS is pretty ordinary also. If that result is not an argument for picking individual stocks what is?🤔

[@iDrive123]

That’s because VAS is top heavy with a few big mining companies and banks. Might as well just buy individual stocks or instead choose an ETF like MVW. More diversification across sectors and not dominated by mining and finance.

[@goodmoveandy4278]

Hi Tracey, Your video was very informative. Thanks for making it and sharing. Have you thought about extending the scenario to include reinvesting the dividends? I think its one of the appeals to owning a fund or an ETF, they make it easy. With VAS its just one easy tick-box on the members page, but with companies its slightly more complex. Thanks again.

[@thewoody1950]

Thanks Tracey, great video👍💜🇦🇺💜👍

[@tradetech7889]

Hi Tracey, How about a video on how YOU got through financially (relating to the markets) during the covid years AND with next week looking bleak on the US markets what your "ideas" are for turning negatives into positives in such times? Love your work Cheers

[@ksawale3250]

Congratulations on cracking 30K you tube followers

[@Scott-qv2ci]

Would be curious to see how this would change if you choose the top 10 companies from 10 years ago as the winners move up the list over time?

[@TraceyEdwards]

I’d love to do this, but I couldn’t find what the top 10 actually was 10 year’s ago 🤷‍♀️ I wish I could find out, it’d be a cool comparison

[@anilkumarkaramsetty584]

@@TraceyEdwards Yeah would be more realistic I would say. But TBH banks did very well in the last 5 years pushing up the returns.

[@28bucket2]

If you did what you have done and only had one mining and one banks eg BHP CBA CSL WES and GMG wow your results would be greater, why hold 5 banks . I did this and compared the top ten from 12 ASX ETFs, they are nearly all the same in the top ten holdings

[@boxman8957]

VGS VAS VHY. Every Aussie should start with those. Then diversify into other complex instruments.

[@BenHeffernanArt]

Hi Boxman, Do these all have DRp's attached to them? Total newb here.

[@pratikdhamecha454]

Yes there is drp. ​@BenHeffernanArt

[@JamesFoxPhotography]

Have a look at VHY esp the dividends. This suggests that individual stocks are a fair bit better than an ETF ?....Maybe i better trim my ETF's ?

[@stormsandfishing5448]

Two things - surely this effect would be far more pronounced if you compared the “magnificent seven” vs the S and P 500 , and if only our 2019 investments were delayed to 2020 ( COVID crash )…….

[@brendatai3108]

Hi Tracy, love your videos. However there is a flaw in your argument in this video. This comparison isn’t a practical comparison because for people who are good at picking stocks i.e they will ended up picking top performing company and out perform the ETF. Therefore, they prefer buying individual stocks over ETFs like yourself. But for people who are not good at picking stock, they will not end up picking those stocks who got featured in this video and will therefore under perform the ETF. The point of buying ETF is that you have accepted you want average market performance.

[@AFW80]

I think the flaws lie in: (1) it’s based on today’s top 10, not the top 10 from five or ten years ago; and (2) the absence of changes in weightings among the top 10 over time though this second point was acknowledged in the video. Would love to see this done using the top 10 from five or ten years ago!

[@angieg9361]

Time stamp 0:41 Tracey states she aware it’s not a fair comparison

[@robsalvv5853]

As with any diversified portfolio or holding, the highs are not as high as they potentially could have been since you weren’t only invested in the big gainers, and the lows are not as low as they potentially could have been since you weren’t only invested in the big losers. There’s no free dinners!

[@kayemmae6733]

Were those 10 companies top 10 a decade ago or top 10 now?

[@michaeledwards5545]

top 10 currently. As she said CSL was a big gainer over the past 10 years so in the etf it would have only been a small holding in the early years where as in the individual shares example its obviously 10% weighting. I think it would be a fairer test to choose the top 10 companies from 10 years ago.

[@kayemmae6733]

also GMG has done really well also. Probably wouldn't have been holding this if you picked the top 10 in 2014?

[@BenHeffernanArt]

Hi Tracey. Am I being too lazy to ask if you could do the same analysis with VHY? I'm far too dumb!

[@TraceyEdwards]

Okay! I'll add it too my list :)

[@howec4388]

👍Thank you.

[@ricochet8014]

Game changer for me

[@Sam-hl7ks]

Great work Tracy . I’ve often thought 300 companies is much too diversified. I wonder if holding the top 15-20 in the ASX would give you a touch more diversity. Would love to see you do VHY and see what happens with the capital growth side of things . Cheers 🥂

[@anilkumarkaramsetty584]

The problem with VHY is its price is not going up as expected which is essential component too.

[@KimKim-ob3hw]

Do u think it is economic recession soon? What should we do if it is economic recession

[@joel_13_]

Dollar cost average

[@philpogson9883]

That’s why I hold VLC instead of VAS.

[@ashernomicYT]

what is VLC

[@philpogson9883]

@@ashernomicYT a Vanguard ETF that only holds the top 20 companies of the ASX index instead of the top 300 like VAS

[@ashernomicYT]

@@philpogson9883 oh not Asx200

[@Rick-kj9dd]

VLC isn't that impressive either. From May 2011 to March 2020 zero captial growth. Look at the charts. Picked up from that point on but still nothing to write home about.

[@philpogson9883]

@@Rick-kj9dd dividends are key. Always look at total returns 😊

[@lesmotley6839]

Thanks. I'm really surprised by the results. It will be interesting to see if the top 10 shares fall further than VAS when the bubble pops.

[@nathanc3189]

i dont understand people saying things like a 15% return over 5 years is a good return for an etf when theres american market etfs that do ~90% return over 5 years

[@stormsandfishing5448]

Australian index etf averages 4% / year dividends whereas US etf would be less than 1% , so keep that in mind when considering total returns.

[@damustafa2416]

Just needed to use the top ten from ten years ago otherwise this whole video is pointless

[@md.zunayedhowlader]

Tracey, your videos are amazing, but without the right editing, they are not getting the dream engagements. I can work full-time for your channel, editing videos and designing eye-catching thumbnails. Is this what you're looking for?