Thursday, 12 July 2018

Which ETF?

My current focus is on accumulating Vanguard's FTSE Asia ex Japan High Dividend Yield ETF (3085.HK). It holds dividend stocks from China, Taiwan, Hong Kong, Singapore, Korea and other Asian countries and has an expense ratio of 0.35%, about the same as STI ETF. The index is characterised by a low P/E of 10.5x. Unlike a regular index that has Chinese tech stocks in their top holdings, this index has the low P/E Chinese banks as their top holdings, which is something I like. DBS, UOB, and OCBC, are also part of their top holdings. I am using FSMOne to buy 3085.HK as the commission is reason, in order to spread my portfolio amongst different custodians (i.e. not all foreign shares into IBKR).

I will also continue to DCA Vanguard's FTSE 100 UK ETF  (VUKE)at a slower pace as it is already one of my top holdings.

I am also holding Vanguards FTSE Developed Asia Pacific ex Japan ETF (VDPX) and iShares Core MSCI Pacific ex-Japan ETF (CPJ1/CPXJ) as my top holdings. I group them together though there are differences. Vanguard includes Korea and iShares doesn't, and Vanguard declares dividends, iShares doesn't. I am currently doing DCA of CPXJ via Standard Chartered online trading, again, to spread out of foreign share custodians.

For Europe exposure, I unfortunately do not have much choices and I have settled for iShares Core Euro Stoxx 50 ETF (CS51) as it reinvests the dividends. European ETFs that declare dividends will do so in Euros, even if the ETF is listed in GBP (i.e. CS51).  I am holding the virtually identical DB X-trackers Euro Stoxx 50 (Acc) (XESC) ETF in SCB as I started off with XESC but later decided to go with CS51. I will continue to DCA Europe ETFs, maybe quarterly. I'm also considering the HK-listed Vanguard European ETF (3101.HK) as it pays dividends but in HKD. 

Emerging Markets
While I am vested in both iShares EM (EIMI) and Vanguards EM (VDEM) ETFs, I am not doing DCA. I think regional ETFs may be the way to go as countries may move from EM status to developed status and leave the index. For regional ETFs, countries usually don't move in and out of the index.

As I have explained in another blogpost, I used Global X's Norway ETF as an oil proxy. Australia is also sort of an iron/industrial metals proxy.

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