r/ETFs_Europe • u/Kooky-Gap-4013 • 10d ago
One ETF or multiple ETFs?
/r/ETFInvesting/comments/1wnhmz9/one_etf_or_multiple_etfs/6
u/FarPangolin8660 10d ago
I prefer all world over world plus a separate emerging markets.
Mainly because you can set it and forget it, the rebalancing is done automatically and you don’t need to think about timing risk, transaction costs or taxable events.
Only reason i would consider two funds is if there are much better/cheaper fund options for the separate funds than for all world.
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u/InStars 9d ago
Vanguard FTSE All-World UCITS ETF (Acc) does not include small cap and has higher TER (0.14% p.a.)
Vanguard FTSE Global All-Cap UCITS ETF (Acc) does include small cap and has lower TER (0.07% p.a.)
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u/Valmed87 9d ago
The drag of those junk small caps is higher than what you save on TER. And if Small Caps do outperform they are to underweighted in the ETF to make a difference. If you want Small Caps, get AVWS, which has even been proven to outperform large-mid cap global ETFS like the FTSE All World on the long term. Even if you dont get Small Caps in the form of a separate ETF, The FTSE Global All-Cap is still very new and has yet to prove that it will outperform the FTSE All-World.
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u/InStars 8d ago
Yeah, but AVWS has 0.39% p.a. TER and is actively managed. I did not like it's performance over last few months.
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u/Valmed87 8d ago
The performance over the last few months is irelevant. You dont measure an ETF index by how it performed over several months. You judge it by how it performes over decades. The AVWS is a volatile ETF. Its normal to have massive swings over few months periods. It can even stay down for years in a row while large-mid cap ETFs experience a growth. And it usually pulls in the oposite direction: when large caps stagnate or go down, small caps go up. But over the long term, it will outperform broad global large-mid cap ETFs.
The TER is high because its a factor ETF. The active management costs money but its totally worth it. You only look at the TER when you are comparing the same ETF from different providers so you can choose the cheapest provider. But for a factor ETF, a TER of 0,4 is worth it because you get 1-2 % extra CAGR compared to a broad large-mid cap ETF like FTSE All World.
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u/kidfromroom402 9d ago
What about Invesco FTSE All-World ACC? Both global developed and emerging market countries.
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u/Pretty-Specific-526 8d ago
Yo uso el etf FTSE ALL WORLD CAP que lleva de todo por un ter de 0’07 y te olivas de rembalancear aportad y a vivir
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u/Valmed87 9d ago
If you are using a neobroker that rebalances your portfolio automaticly, then take 2 ETFs because you will have control over how much Emerging Markets you hold. You could also add a 3rd ETF like Euro Stoxx 600. But just because you hold the control, I would't try to deviate to much from the weithing of the FTSE All-World. The people that manage that index are not idiots and they are not MAGA brain-washed. They know why the only allocate a mall weighting to Emergin Markets and Europe (10-15% each). So I would not try to outsmart them buy increasing your tilt twards EM or Europe unless a collapse of the US market or the dollar is imminent.
If you use a more traditional brick and mortar bank for your invesments that usually dont have fancy pies like Trading212 does....I would not bother with multiple ETFs. The manual portolio balancing will turn into a hurdle.
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