Folks,

The easiest way to start is

60% VT and 40% BND

https://personal.vanguard.com/us/funds/snap...&FundIntExt=INT

https://personal.vanguard.com/us/funds/snap...&FundIntExt=INT

Then, you can tune and adjust your ratio or add VNQ as you know more.

https://personal.vanguard.com/us/funds/snap...&FundIntExt=INT

Dreamer

My portfolio using US ETFs is still in progress, doing OK so far.

Should reach my target allocation in the next few months

Although added a few other sectors ... Russia/Thailand/Vietnam to diversify a bit

rjb123,

If you won't mind, could you please let us know your stock versus bond ratio and how you arrive at the number?? Or, how you decide to allocate X% to each ETF??

Thanks.

Dreamer

is there any basic training for stock allocation topic which is organized at kl?

Currently I'm targetting 30%/70% Bond vs. Stock ratio , will be heavier towards bonds as I get older. I'm treating this as my retirement pot , so planning to be topping up monthly without withdrawing anything (ie. close to 30 years - I'm currently 27) so I don't see a problem being a little heavier on stocks for now.

I'm still in fairly early stages as reluctant to put too much cash in at once - according to my monthly contribution plan I'm sitting on 10 years worth of contributions

Edit : Although for the long term I'm not sure doing this through the US is the best choice due to the Withholding tax on dividends - Luxembourg would be an alternative but the broker there has far higher transaction charges

This post has been edited by rjb123: Jun 20 2014, 02:31 PM

dreamer101, r u cfa certified professional?

he is a network engineer

zstormhere,

No. Why do you ask??

Dreamer

Comparison of VOO (Vanguard S&P 500 ETF), VT (Vanguard Total World Stock ETF) and KUTNETF (Kenanga Growth Fund) :



Also, IINM, VOO's price per share is now $180.44 (about Rm580 per share.) Board lot is 100 shares, so to buy into VOO now you will need $18,044 (Rm58,093).

VT's price per share is now $62.73 (about Rm201.96). So to buy into VT now, you need at least $6,273 (Rm20,196).

The question is now whether you can afford to lose Rm58K, or Rm20K if Vanguard implodes. This is very unlikely, but then no one would have guessed Lehman Bros. would file either.

Also, if you want to DCA/VCA this, you will have to put in 58K, or 20K each time.

Please correct me if I am wrong.

Also, now that we have Aberdeen's Islamic World Fund, we have a way of mitigating single-country risk.. so I'm not sure what advantage VT would have over them in Malaysia.


This post has been edited by wodenus: Jun 23 2014, 10:06 PM

wodenus,

You are WRONG!!!

1) There is no lot size with US ETF. You can buy as little as one share. So, the minimum for VOO is USD $180.44 and VT is USD $62.73..

2) You either trade for free or pay USD $10 per trade. Normally recommended to buy around USD $1,000 per trade.

3) No sales charges of 5% to 7% like Malaysia UT..

4) Annual maintenance fee of less than 1% for both ETF..

<< This is very unlikely, but then no one would have guessed Lehman Bros. would file either.>>

5) This is a STUPID statement. VT invest on all 4,000 largest public listed companies in the WHOLE WORLD. If VT crash, the WHOLE WORLD is going to hell.

<<Aberdeen's Islamic World Fund>>

6) Why would somebody want to pay more to get less??

A) 5% to 7% upfront sales charge versus USD $10 per trade

B) 1% to 3% annual maintenance fee versus less than 1%

C) 4,000 largest public listed companies around the world versus how many in that UT??

Dreamer

This post has been edited by dreamer101: Jun 23 2014, 10:30 PM

Thank you so much actually sales charge is around 0-2% here now, things have changed, but yea I can see how that might actually be a good idea

But wait..



A) 2% sales charge. Lowest minimum brokerage here is $30 per trade. Would be interesting to find a low-cost US broker in this country

B) If their expenses are so much lower, why aren't they doing any better?

C) This presumably is from their marketing material, unless you have the full list of their 4000 holdings, so nothing said about that.


This post has been edited by wodenus: Jun 23 2014, 10:55 PM

In regards to trading fees etc. US ETFs are far superior than equivalent products in Malaysia.

The only downside it seems are the tax on dividends - although I understand half of the 30% withheld you can claim back at the end of the tax year?

Wodenus , regarding your point "A) 2% sales charge. Lowest minimum brokerage here is $30 per trade. Would be interesting to find a low-cost US broker in this country"

Nothing is stopping you from opening an account with a US broker, they don't have to be based in Malaysia ...

I don't really understand this question - how do you define "better"?

B) If their expenses are so much lower, why aren't they doing any better?



This post has been edited by rjb123: Jun 23 2014, 10:59 PM

wodenus,

https://personal.vanguard.com/us/FundsAllHo...&sortOrder=desc

The full 6,227 holding.

Vanguard ETF and mutual report their FULL HOLDING every quarter. It was on the URL that I posted.

Dreamer

This post has been edited by dreamer101: Jun 23 2014, 11:43 PM

Don't think we have a tax treaty with the US so the 30% is a fixed number.
However I think it only applies to US company-issued dividends. So not all that painful either if you opt out of dividend ETFs too.

It's small fry in light of the 0% long term capital gains tax (most US peeps who have $ to invest get knocked with 15% if it's not in a 401(k) ) and low management fees.

I'm looking seriously at wiring a bit of money into Schwab and the withholding tax is prolly my last concern (other than picking between Schwab's own ETFs or ponying $9/trade for Vanguard stuff)

Fair enough, can you suggest a good low-cost US broker that will allow a Malaysian resident to open an account? Schwab wants Rm30K initial funding.



Given VT's low management fees, you'd expect them to have much better performance than AWF.. but as the chart (above) shows, performance is about the same. What does the low management fees translate to, in terms of unitholder benefits?

This post has been edited by wodenus: Jun 23 2014, 11:52 PM

wodenus,

If the chart is the same, that means Vanguard win.

A) AWF's chart is based on amount invested less the front load (sales charge). That means AWF's performance is 1% to 2% lower than the chart shown.

B) AWF do not invest on 6,227 companies across the whole world. It is more risky.

C) VT is a passive index fund. No active management risk.

Why pay more to get less??

Dreamer

Hmm I see, I was under the impression we can get the 15% back from what I read - need to double check.


Benefits to unit holder - less annual fees?

They can have less fees, as much larger in terms of total assets

rjb123,

By the way,

1) Vanguard is the world largest mutual fund company.

2) Vanguard is owned by the mutual fund holder. Aka, it is a not for profit company. It operates the mutual fund at cost. See below URL for more details.

https://investor.vanguard.com/what-we-offer/why-vanguard

Dreamer

This is a straightforward growth chart.. I got it off Bloomberg. Both have pretty much the same growth, as you can see. Given that VT's expenses are much lower, why is the performance comparable? why isn't VT's climb much steeper than AWFs? if the fees are so much lower, all other things being equal the VT chart should have a steeper gradient.. but it doesn't.

So where does the money go?



This post has been edited by wodenus: Jun 24 2014, 12:11 AM

30k is on the low side man. ETrade wants 75k ringgit.
Actually it's only a $500USD minimum to open there. But trades aren't cheap at $10 a notch.

I believe that happens to your active income taxation if you declare yourself either a US resident or a low-bracket income-earner ("Green Card Hax") but dividends going under passive/FDAP income, don't seem to trigger any mention of exemption.

This post has been edited by X.E.D: Jun 24 2014, 12:07 AM