I currently have an asset allocation of around 60% stocks (100% VT) and 40% stocks (2nd pillar, 3rd pillar). Now although VT is already quite broad in terms of diversification as it covers the whole world I wonder which direction I should better diversify my portfolio.
After looking a while I am under the impression that I should either go for an ETF in emerging markets and / or an ETF in real estate investments. I was thinking of an allocation of around 10% of my portfolio in on of these types of ETF. What do you think?
As I am with DEGIRO for broker I am inclined to the following two ETFs which are free of transaction charge:
Regarding REIT I chose the European one based on lower riskiness but they also have Asia (IE00B1FZS244), Global (IE00B1FZS350) and US (IE00B1FZSF77) available. But I am not scared of taking more risk here for better performance as this would only be a 10% part of my portfolio and I am anyway in for the long-term.
American Towers corp, the second biggest position of VGSIX is part of VT (~89th position). Crown Castle International Corp, the 3rd position of VGSIX is ~113th of VT.
If you pay some wealth tax (~0.3% or more), you can buy swiss real estate mutual funds that owns directly the buildings. But if you don’t, then it is not for you because you clearly want to buy 70 companies, not 70 buildings.
Thanks @yakari for the video about REITs, I will stay away from REITs… and consider EM or small cap ETF instead.
Now regarding VT has no small cap you sent me a link to the portfolio of VT which shows that VT includes large and mid cap. So by sending me this link did you mean to confirm that VT has no small cap in its porftolio?
I am now more focused on going for a small cap ETF which, if possible, is more towards value stocks than growth stocks. It seems to me like VBR (Vanguard Small-Cap Value) it the best fit and has a low TER on top of that. But it covers “only” the US market.
My two other alternatives would be the following two European ETFs:
Thanks @djabsil that’s a nice feature morningstar offers… I was now trying to calculate the “emerging markets” exposre of VT using the very same tool (region) and would it be correct to say that VT has an emerging market exposure of 6.9% ?
I calculated that 6.9% by adding the two regions “Europe Emerging” with 0.69% and “Asia Emerging” with 6.21%. Or should I also add “Latin America” and “Africa/Middle East” to this number? Not totally sure if these should be considered as emerging markets within VT… but then that would sum up to 9.09% exposure to emerging markets.
Thanks @Cortana for the link to the vanguard website, I should have directly looked at the source like you say. All the information I am looking for is there and in fact it is 9.8% exposure to emerging markets.
My point of dissecting the VT ETF still remains to simply find out what class is mostly underexposed in VT in order to complement that underexposure with another ETF as I am currently 100% in with VT I would like to diversify.
Knowing now that VT has an 9.8% exposure in emerging markets I conclude more and more that small (value) cap is what is mostly underexposed in VT. Except if I am missing something else… hence the discussion in the forum post.
How do you define underexposed? By definition VT has the market based exposure to (almost) all equities. What you seem to seek is to overexpose yourself, I assume based on some criteria like potential for higher reward (with more volatility) for small caps and emerging.