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FXF

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« on: December 03, 2014, 02:03:40 AM »
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« Last Edit: April 30, 2018, 11:52:20 AM by FXF »

Grog

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Re: Adding to existing funds or adding new funds to portfolio?
« Reply #1 on: December 03, 2014, 05:35:07 AM »
In your case before adding different funds you shold really know why are investnig in something and not in something else, aka writing down an Investment plan (see the bogleheads wiki for better explanation).

For instance why have you chosen this Asset Allocation?
You have 50% in Msci USA, which is fine, but then you have a second MSCI USA ETF at 10% and a MSCI WLD which is basically 60% = MSCI USA:

So in total you have 66% MSCI USA. Is this what you want? Why?

regarding home bias: one reason (but not only one) regards the currency exchange. Since you are in the Eurozone, you could buy the EuroStoxx 50 index which is alittle bit more diversified than DAX and can be had with very cheaply TER.

As I said, before adding, devlop an Investment Plan containing an allocation, and try to seek all the overlapping between ETF and eliminate it where possible

Primm

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Re: Adding to existing funds or adding new funds to portfolio?
« Reply #2 on: December 04, 2014, 11:37:22 PM »
Overlap reduces diversification, which is one of the big selling points of index funds / ETFs.

Yeah, you probably should have decided on a desired allocation before you started! But like they say, the best time to plant a tree was 20 years ago. The second best time is now. So before you put any more money into anything decide where you are headed. Then do it.

Primm

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Re: Adding to existing funds or adding new funds to portfolio?
« Reply #3 on: December 05, 2014, 04:39:42 AM »
Nope, that's right. But you (generic) can't then kid yourself and say you have 25% USA A and 25% USA B and are therefore diversified when in fact you have 50% in essentially USA A + B.

Grog

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Re: Adding to existing funds or adding new funds to portfolio?
« Reply #4 on: December 05, 2014, 09:58:48 AM »
Ok starting is already something, but in your plot it doesn't make sense to have a "World" column.
The FTSE All-World index is truly an all-world index, but the MSCI World, that you are buying, is only developed and includes:

United States 57.67%
United Kingdom 8.01%
Japan 7.97%
Canada 4.02%
France 3.76%
Other 18.57

So what it is your goal? What do you want with your yellow line/area? You write world but in the MSCI World you already have USA, EU and Asia (Japan for instance). What remains are fractional change of other countries like UK, Switzerland, Canada and Australia that make maybe 18% ogf the whole index. So if you are buying World to diversify, you are doing it only for like 18% of it.