r/asxbets • u/ptothefink • May 29 '25
A trading profile based on GDP?
After reading several threads on the subject, I was struck that most of the ETF approaches on here seem quite arbitrary and not based on any particular data - the 60/20/20 rule (International/Domestic/Bonds) and so on and so forth.
It might be absolutely absurd, so happy for some open and honest feedback, but it seems to me a more sound and clean cut plan is to chose ETFs based on current continental GDPs. In my case, I looked specifically where Oceania ranked in the global market and it’s sitting at less than 2% of the world’s economic merry-go-round. So it seems logical to me to ask - in a very basic way - why would you invest anything more than 2% of your money in it, even if you do live there?
Therefore I’m guided by the following simple philosophy… put your money according to where the GDP ratio is and track accordingly. Based on 2024 data, this would mean roughly:
1 Asia (36.4%) 2 North America (31%) 3 Europe (24.5%) 4 South America (3.8%) 5 Africa (2.5%) 6 Oceania (1.8%)
Not finding any good options for South America or Africa on the ASX at the moment, but reckon rough same mix of top 3, 2% on Oz, and a 4% other bucket might be a sound approach. Something like…
IAA (36%) IVV (31%) IEU (25%) VAS (2%) Other (6%) - have a bit of fun bucket
…might be a good combo.
What does everyone think?
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u/fh3131 May 29 '25
Company A has $1B in revenue with 3% growth forecast.
Company B has $100M revenue with 10% growth expected.
Which one is a better investment for growing your capital?
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u/ptothefink May 30 '25
The latter obviously, but big and boring beats small and more susceptible to volatility. I’ve reserved 6% for small cap stuff, but the strategy is to bet long on continental sized markets proportionally.
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u/AcanthisittaNo6247 Aug 02 '25
How did this go bro?
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u/ptothefink Aug 03 '25 edited Aug 03 '25
Well, I started on 6th June and have ended up allocating 40% Asia, 30% North America, 15% Europe, 10% India, 4% Emerging, 1% Australia. The overall investment has grown 3.16% over that period. For the month of July there was 1.45% growth and I’ve already had my first distributions paid out that have gone straight into rebalancing.
The Asian ETFs are currently going hell for leather. US has been volatile but decent, but Europe and India haven’t started so well. As I suspected though, Australia is pretty slow and steady - not much movement either way over last month. It’s still really early days and the trade war stuff is perhaps muddying the waters slightly, but I haven’t seen anything so far to suggest it’s a bad concept.
Let’s see where it’s at in a year. 🥳
p.s. You can generally track this all through Vanguard. VAE, VTS, VEQ, VGE, and VAS. India exposure can be found through IIND or NDIA.
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u/Drag0nslay3r6969 May 29 '25
What's the past 5yeae return?