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Forever ETF
Old 07-24-2014, 06:57 PM   #1
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Forever ETF

Which non-standard ETF would you recommend me to buy. I am mean buy and hold forever.

I am not interested in classic S&P 500, MSCI All Word index, Wilshire 5000.
Those are standard forever holds.

I am interested in something more special For example VIG, MOAT...

Why would you recommend this ETF?
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Old 07-24-2014, 10:01 PM   #2
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What's your asset allocation?
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Old 07-25-2014, 04:41 AM   #3
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What's your asset allocation?

Almost 100% equity index funds or equity ETFs with 60/40 balance of domestic/international. I am interested in equity ETF.
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Old 07-25-2014, 06:45 AM   #4
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I have a bunch of IVW and some standards of QQQ, IVV and IVM.

Anytime you get outside of a norm, you pay more in expenses and might not beat the market. There are health care ETF options and precious metals options too.
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Old 07-25-2014, 06:49 AM   #5
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One DIY approach to consider...

Fama and French's research in the 1990's demonstrated the historical benefits of a small and value tilt. The DFA fund family (8th largest +/-) was built around their principles. Swedroe and other serious investors are believers.

Their funds are only available through advisors, though.

This article is one of several I found that suggests the DIY portfolio manager can replicate their approach without the advisor wrap fees.
Replicating a Dimensional Funds Portfolio | Seeking Alpha
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Once I found the portfolio, I used Morningstar to determine each of the DFA funds holdings and began comparing those with ETFs in the respective asset class. For almost each fund, I was able to find a comparable ETF that had similar holdings, expenses and performance.
In your case, you might look at DGEIX, a 100% equity fund with a 35% international allocation (including 10% emerging markets). 45% of their holdings are in medium, small or micro stocks.
http://portfolios.morningstar.com/fund/summary?t=DGEIX®ion=usa&culture=en-US

One potential downside to this and similar approaches is that it could result in a stack small-slice, specialized portfolios, which even as ETFs tend to have higher management fees than funds built on more broadly-diversified benchmarks.
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Old 07-25-2014, 09:37 AM   #6
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One could construct a simple ETF portfolio with different percentages of these:
VTI - total US stock market index
VBR - US small-cap value index
VXUS - total int'l stock market index
VSS - foreign small-cap index
BND - total US bond index
VCSH - US short-term corporate bond index

One would really not need any other ETFs.

As for buy-and-hold, that something one should never do. Instead one should buy, hold, and rebalance.

For this thread, I would guess that VBR, VSS, and VCSH might be called non-standard. There are other non-standard ETFs such as VNQ, DGS, or even VWO which I would not recommend unless one was willing to trade them occasionally.

Why? VBR and VSS take advantage of the small-cap and value premiums. Everybody needs to overweight these asset classes. VNQ is REIT which is less correlated to other asset classes. DGS is another small-cap story, but in emerging markets. VWO is large-cap emerging markets. These latter 3 are so volatile that if one doesn't buy low, sell high in rebalancing moves that one would lose all benefits of owning them.
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Old 07-25-2014, 11:38 AM   #7
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Here's some ETF's I use as permanent portions of my AA:

FRN - frontier markets (FM is an alternative)
DEM - EM value
DGS - EM small cap
DLS - International small value
RWX - international REIT
VNQ - domestic REIT

Part of a full slice and dice portfolio, but they could be used to spice up a simpler portfolio.
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Old 07-26-2014, 06:57 AM   #8
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VIG looks interesting for US equities. I own a little. I would have to take a long look before considering it as my one-and-only, though.
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Old 07-26-2014, 07:03 AM   #9
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VIG looks interesting for US equities. I own a little. I would have to take a long look before considering it as my one-and-only, though.
Yes I consider VIG and SCHD in class of not standard ETFs but in class of "Forever ETF".

Fees comparable to cheapest S&P 500.
High Quality Companies kinda Warren Bufett Wide Moat.
In my mind I call them collections of "American Rembrandts" though both indexes contain a bit of junk as well.
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Old 07-26-2014, 10:07 AM   #10
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While the fees may be higher than you desire I am a huge fan of the SDOG ETF. Divides the S&P 500 into 10 industries and takes the 5 highest yielding stocks of each industry group. You end up with in general large value stocks in a diversified index without becoming overly concentrated in one market segment.
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Old 07-26-2014, 10:38 AM   #11
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Running man, think we've talked about SDOG before, some of your enthusiasm rubbed off. I have become a fan even with the ER. It's done very well for me. I've also gotten in to IDOG, very happy with dividends ytd. Thanks for bringing SDOG up in prior threads.
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Old 07-26-2014, 11:57 AM   #12
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I have been revaluating my Oakmark Global Select (OAKWX) residing in a Roth. SDOG, and particularly IDOG, are very interesting. OAKWX has a high % of financials while IDOG holdings are very diversified. Any thoughts folks?
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Old 07-26-2014, 03:49 PM   #13
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Yes I consider VIG and SCHD in class of not standard ETFs but in class of "Forever ETF".

Fees comparable to cheapest S&P 500.
High Quality Companies kinda Warren Bufett Wide Moat.
In my mind I call them collections of "American Rembrandts" though both indexes contain a bit of junk as well.

Both VIG SCHD focus on dividends of large/giant market cap companies, and I think are US only. Historically, the smaller cap value companies have outperformed, and I'd want to include nonUS companies in a forever portfolio.

I've just started following a recently introduced value oriented fund run by Meb Faber of Cambria, GVAL. It's 57% large cap, 32% mid, 12% small, and is invested in 25 different countries. Total expense is 0.69%.

http://www.cambriafunds.com/assets/p...-FactSheet.pdf


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