We Found the Best One ETF Portfolio

[@Nanalyze]

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[@michaelallen5889]

By far the best investing channel on KZbin

[@Nanalyze]

Thank you very much for those kind words!

[@bills1779]

Another great video!!! Great research as always, your voice is perfect with the just the right cadence. ❤

[@Nanalyze]

That's great feedback, thank you!

[@SK-nw8ec]

Great video! I like that Nanalyze has a MSCI background but you chose a fund that follows an FTSE index. This shows your objectivity!

[@Nanalyze]

I'm a mercenary. I go where there is the most money to be made. ;) Joe P.

[@SK-nw8ec]

@@Nanalyze Lol awesome!

[@DP52001]

Another great video - thank you!

[@Nanalyze]

You're most welcome. Glad you enjoyed!

[@b.sharp.]

Great video. Thank you for the research. This does imply that these ETFs that are underweight on non-US stocks won't rebalance in the coming decades if other countries begin to out perform. In my personal opinion, the major holdings in SPY, QQQ, etc. cannot be considered purely US companies. Massive cooperations like Facebook or Google are far too global. They are extremely geographically diversified and are getting more so year after year. As global travel gets faster, easier, and cheaper and as global internet becomes more widespread, boarders for businesses will get even more blurred.

[@Nanalyze]

Glad you enjoyed the research! You make a good point. International revenues is one factor in our Quantigence strategy. We reward firms that have it, penalize those that don't. This data can almost always be found in 10-K filings.

[@priestesslucy]

Faster? We already tried supersonic travel. We canceled it 😂

[@b.sharp.]

@@priestesslucy I'm talking space

[@Nanalyze]

@@priestesslucy It's coming back though. Check out Boom.

[@mplt6151]

I would go for the URTH etf. Yes, TER a bit higher but always better returns over VT

[@Nanalyze]

That tracks MSCI World which excludes emerging markets.

[@user-mu7vv7gb9f]

Thanks Joe P. I think a lot of folks need to start thinking this way. I wish I did in my 20’s. I’m starting a new job and hopefully they offer this Vanguard World fund in the 401k otherwise I’ll just open my own. I just watched the Dlo video and it was very good. Thanks I became an investor this week with the discounts in share price. Danny D.

[@Nanalyze]

Glad you're finding usefulness in our content Danny! We did a recent piece on DLO here: (www.nanalyze.com/2024/05/dlocal-emerging-market-fintech/). We all make bad investing decisions early on, it's just important to get those mistakes out of the way and learn from them :) Joe P.

[@VirtueInvesting]

Yeah, if you could only hold one fund it is best to hold the world market - I hope lower fee MSCI ACWI and MSCI ACWI IMI ETFs come through soon (also ones that actually hold the 8,000 holdings or whatever, the last MSCI ACWI IMI ETF I saw only had about 3,000 (from SPDR in the UK) and it was 'optimised sampling' to match the returns of the index - but as an investor wanting to hold the world, I want to hold all the stocks in the world! Another great video, thank you :)

[@Nanalyze]

Thank you for the feedback! ETF managers often don't hold all the stocks contained in the underlying index. Their performance is measured (at least the passive managers) with a metric called a "tracking error." Matching the performance of the index is the goal for a passive manager and most come very close. Regarding MSCI's indices, they've always been very richly priced. Their corporate events and research teams are top shelf in the industry.

[@MrMentalpuppy]

Good pick.

[@Nanalyze]

If you had to hold one... this is probably the best choice.

[@pj6181]

Hello there @Nanalyze, could you please explain why the VTWAX is a better choice than VT? What makes funds different and better than ETF's? Thank you

[@Nanalyze]

VTWAX is not the better choice as it has a higher expense ratio, and that happens to be the most important predictor of a fund's performance (low expense ratio).

[@pj6181]

@@Nanalyze thanks for the reply. I guess I misunderstood when you said at 10:57 that it’s not a bad fund it’s just a better alternative to invest in an etf instead.

[@doloresr.3244]

It's simply the flow of money into different asset classes across the globe at any given time. Assuming "all tech, all the time" as the norm is dangerous for a long term approach. Tech business cycles move very quickly.

[@Nanalyze]

Well put. You've succinctly addressed all the "QQQ OR BUST!" people in the comments section here ;)

[@mtoporovsky]

Can you explane psihologicly reason why in first place ETF ot firm offer divedend lees than level of inflation? Why retailer not use characteristic which much easier to consider: net divedend ( without expences)?

[@Nanalyze]

Don't understand question

[@blaupunkt1619]

VT is equivalent to IMID for european/non-US investors. Cheers from Brazil.

[@Nanalyze]

Thank you for the comment! Lots of Brazilians in our community, welcome!

[@Nanalyze]

A number of people have been talking about international revenues for U.S. companies. But it isn't just about revenues. You have currency risk, political risk, regulatory risk, and country risk that are all specific to the USA.

[@1yerdy]

But you also have all of those risks in other countries. Why would those risks listed only be in the US?

[@Nanalyze]

@@1yerdy Yes, all countries have these risks. Exactly. That's why you don't just invest in one country, you diversify across many countries.

[@George-f8h]

What a timely video, Joe! I bought Vanguard Total Stock Market ETF (VTI) yesterday believing that investing in all U.S. companies is diversified enough. Your presentation made me reconsider my choice, so I will be switching to VT. Thank you for that. In planning for your future videos, I'm wondering if you would consider doing one on the topic of bonds. Are they essential in a well- diversified portfolio? If you invest in a dividend growth ETF or own shares of companies on your Quantigence list to provide growth and income, could you do away with owning bonds? I see high-yield savings accounts that offer between 4.5% to 5%, and I don't see an advantage of owning bonds... at least for now. Would owning CDs be one of the income options you would consider as protection against future interest rate cuts? By the way, what is your quick take on 3M cutting its dividends and losing its status as a dividend king? Is it still worth holding onto?

[@Nanalyze]

Great questions here :) VT definitely is a more holistic way to get equities exposure. Reducing domestic bias is always good. Yes, we can do a video on bonds. Good idea. That's been in the queue for ages - keeps getting pushed out :) We do away with holding bonds by simply investing in Quantigence - "equity bonds." Who wants fixed income when you can have growing income! You are mainly talking asset class allocation decisions which everyone needs to make when considering the options available. Regarding 3M, my grandfather worked their his entire life. They were a pinnacle of American innovation. Then ambulance chasers levied loads of mass torte lawsuits at the company. Maybe some of those cases have merit, but if you really dig into the details of the ear plug case, you'll see how rubbish it was. 3M should have done a much better job defending that case. Now they're an easy mark for all the gravy suckers who pretend they're acting in people's best interests. Anyways ;) When a company stops growing their dividend we kick them to the curb like a red-headed stepchild. No exceptions. Joe P.

[@peterfischer7084]

Why should VTWAX be a better alternative to VT( even though the fees are higher)?

[@Nanalyze]

Higher fees are never better

[@tarikviaer-mcclymont5762]

VGT/SMH if it continues its a 9X/10X in 10 years

[@Nanalyze]

Massively overweighting tech and semiconductors because you have conviction is great. Not everyone has those Nostradamus skills so the idea is to pick an asset that provides the broadest coverage with the least amount of speculation.

[@DanielGonzales-di6tq]

I’m going with FTEC/AIQ/SOXQ

[@bills1779]

Totally agree !!​@@Nanalyze

[@vladvotiacov3340]

How's about $AOA? Not fitting criteria?

[@Nanalyze]

That's a "fund of funds" so unless they're waiving fees on the underlying ETFs it seems like that would be really expensive.

[@davidk126]

It's not completely related but would it be worth having vymi as part of the portfolio along with voo or just vt and voo? I know there is overlap with the last two obviously.

[@Nanalyze]

If you want to have a portfolio of ETFs, then the "three ETF portfolio" makes a lot of sense. It's what the Bogleheads won't stop talking about - and for good reason. Covered here: kzbin.info/www/bejne/Z328g2aeeZ2JfKM

[@sublyme2157]

Step 1: Get a million dollars. Step 2: Invest it all in VT. Step 3: Live on rice and beans, and occasionally treat myself to a can of salmon. I think you're right on the money, I'm just sad that being a millionaire also means living under the poverty level :(

[@Nanalyze]

Depends on the country. Geographical arbitrage can really increase those living standards.

[@Michaeldotcom33]

QWLD is a good global fund that has done good. The fee is a little higher but so is performance.

[@Nanalyze]

Low fees are the most important predictor of performance over time

[@BillCagney]

VOO. IF I could not get that one then VTI which is 80% the same as far as holdings go. NVM watched the video and it addresses that. VT would work in this case.

[@Nanalyze]

Glad you're finding the content useful Bill!

[@GreyrainLife]

Why is it necessary to invest internationally? Can you show that international ETFs outperform US ones?

[@Nanalyze]

Good question. Basic risk management principles. Overweighting your home country is demonstrating domestic bias.

[@mtoporovsky]

Why not VSGX?

[@Nanalyze]

Because ESG is shite: kzbin.info/www/bejne/fF6Zi4OIpdN5gKc

[@dougspry3101]

Been there done that. I held tiaa cref stock r3. 65 usa and 35 international for 10 plus years. Totally underperformed. I got out of it in 2020. Lost thousands. Should have just invested in vtsax or vtiax. Yes I know past performance doesn't predict future results but 35 plus in international is too much for me. Vt is the same as cref r3.

[@Nanalyze]

We cannot look at the performance of an arbitrary time frame and conclude that geographic diversification underperforms. The idea behind diversifying away country, currency, and regulatory risks is basic risk management. The USA will outperform until it doesn't. We have no idea what the future holds.

[@dougspry3101]

@@Nanalyze of course but 35 percent in international isnt my cup of tea. 15 or 20. I've been down this road and lost thousands with an all in one fund like cref r3 stock.

[@dougspry3101]

@@Nanalyze I would rather stick with vfiax/vtsax and only hold 15 percent in vtiax.

[@Nanalyze]

@@dougspry3101 Each investor will have some preference to asset class allocations. What's important is that we're talking about them!

[@PremiumCollector.]

I contribute to the mutual fund, VTWAX. Considering the switch to the ETF so i can write calls against it, baby! 😏

[@Nanalyze]

Don't limit your upside too much with call writing!

[@edgibbs3229]

Warren recommends VOO.

[@Nanalyze]

Total stock market ETFs have less concentration on large tech names which dominate the S&P 500 right now.

[@edgibbs3229]

@ Totally agree with you. And I agree with your VT selection as well. Just not the way I personally invest. We have a very large percentage of our investable assets in Berkshire Hathaway. That gives us good diversification without relying heavily on Mag 7.

[@Nanalyze]

We have the majority of assets in our dividend growth strategy, Quantigence, which consists of what Buffett calls "equity bonds." Also avoids the Mag 7 concentration issue. :)

[@doloresr.3244]

Scary to think our world tuned on it's head should the US financial dominance be reduced or possibly come to an end. Where would the money go? Simply, somewhere else.

[@Nanalyze]

If it happens, it's likely to be something that happens slowly - like boiling a frog.

[@VoppyDasKlown]

You missed a MSCI ACWI IMI ETF: SPGM. Only .09 fee. You get a better index than FTSE for 2 basis points.

[@Nanalyze]

Higher fees, a fraction of the AUM that VT has. Why do you think the MSCI index is better?

[@VoppyDasKlown]

@@Nanalyze Slap it into portfolio visualizer & backtest. Overall a little bit higher cagr, sharpe, & sortino. More noticeable across markets; US (PBUS vs VONE), developed (IDEV vs VEA), & emerging (IEMG vs VWO). Ugh, portfolio visualizer is paywalled now. Only goes back to 2015.

[@Nanalyze]

@@VoppyDasKlown Would be nice to backtest across a longer duration. Instead of performance, it may be more useful to look at the methodological differences and decide based on that. Not an easy task.

[@crooked52h]

SCHD 50% ,VONG 35% ,SOXQ 15% in my Roth

[@Nanalyze]

Here's our piece on the three ETF portfolio concept: kzbin.info/www/bejne/Z328g2aeeZ2JfKM

[@khafreahmose8768]

QQQM for me...

[@Nanalyze]

Underweighting value and overweighting USA

[@khafreahmose8768]

@@Nanalyze I would sacrifice both if my account grew by +500% in 10 years.

[@Nanalyze]

@@khafreahmose8768 "If." Nobody has any idea what will happen in the next 10 years.

[@khafreahmose8768]

@@Nanalyze correct. No one knows what will happen so at the end of the day, investing is one big bet and I will bet on the top 100 companies on the Nas any day.

[@Nanalyze]

We don't bet, we invest. Investing is not one big bet. That's an irresponsible way to approach growing wealth. Casinos are great places to bet. You're bullish on the 100 companies in Nasdaq? Excellent. People who don't have your superior forecasting skills are better off investing in a well diversified vehicle IF they had to choose one which is what this video was about.

[@FA9082]

The only RIGHT ANSWER IS QQQ. I'm sorry but if you say anything else you are laughably wrong and should just stop investing right now 😂

[@Nanalyze]

You should watch the video before you comment ;)

[@russellhunter8460]

Qqqm or vgt but yes, this all world thing is definitely a no go for ones likee and you.

[@Nanalyze]

@@russellhunter8460 Please put effort into your comments. Why?

[@russellhunter8460]

@@Nanalyze reason being is the s&p500 companies are global or at least the big players that actually move the needle. Also the global etf has lagged behind just the simple vti which vti lagged behind Voo. But just maybe as a foundation part of a portfolio it would work along with a growth stock to help it and the world reducing some risk.

[@Nanalyze]

@@russellhunter8460 Good point on international revenues which we take those into account in our Quantigence strategy. But it isn't just about revenues. You have currency risk, political risk, regulatory risk, and country risk that are all specific to the USA. Also when you say "lagged" in reference to performance, a time frame would be helpful. Just because growth stocks have been hot lately doesn't mean that continues.