I'm wondering if any Aussie investors would consider build their portfolio on entirely NYSE US listed ETFs, using a local broker like CommSec international or similar (I think there are plenty of options)?
Some possible advantages:
- Get away from the top heavy and finance/mining heavy weightings in the ASX200
- Much wider choice of ETFs
- Most commentary and analysis is US-centric. How well will these same strategies work outside of US? A non-issue if you just do it exactly like they do.
- Introduced currency risk (could be a potential benefit)
- Broker exchange rates could be poor
- No franking credits
- Possibility of increased counter-party risks
I'm throwing this out there because I've been looking at some of the more diverse portfolios on portfoliocharts.com and wondering how some of these could be implemented from Australia.
How about attempting to emulate the more diversified portfolios using funds, and/or ASX listed ETFs (or LICs)? Anyone doing this to implement an Aus-based portfolio like Coffeehouse, Permanent Portfolio, Golden Butterfly, Merriman etc? How is it working out?
Agree with the thinking on avoiding too much exposure to the ASX200. Here is a some lazy analysis of the top 20 companies in the ASX from a post I made in a similar topic elsewhere:
"Here are the top 20 companies (by market cap in the ASX50):
Commonwealth Bank – Bank
Westpac Banking Corp – Bank
ANZ Banking Group Ltd – Bank
National Aust. Bank – Bank
BHP Billiton Ltd – Mining
Telstra Corporation – Telco
Wesfarmers Ltd – Retail + Industrial (mining exposure)
CSL Ltd – Biotech
Woolworths Ltd – Retail
Macquarie Group Ltd - Investment Bank
Scentre Group Stapled Securities – Westfields Australia – Retail
Woodside Petroleum – Oil and Gas
Transurban Group Ordinary Shares/Units FP Triple Stapled – Infrastructure/Toll Roads
RIO Tinto Ltd - Mining
Westfield Corp Stapled Securities – Westfields Rest of world – Retail
Brambles Ltd -Transport/Logistics
Amcor Ltd – Manufacturing
Newcrest Mining - Mining
Suncorp Group Ltd – Bank
Ramsay Health Care – Health
Hows that sweet sweet diversity? No risks here...banks, mining and retail... "
I already work in a mining exposed industry and think the current housing boom will end in tears for the banks. We have limited our ASX exposure by buying VGS (international shares ex Australia) and VGE (emerging markets) so far.