Well it was nice to have an up month for the first time since I started the ETF portfolio!. Last month the ETFs were all in the red except for one but this month they’re all in the green except for one. So I’m ahead on last month and things are looking good. Lets see if we can finish the year on a high as there’s only thirty more days until 2024! I can’t believe how fast this year went.
More than just a Vanguard ETF Portfolio
A few months ago when I first started this ETF Portfolio it was mostly to use the Vanguard auto-invest function and to show people how easy it is to get started with investing in stocks. The Vanguard account is going well and I now have about $3,429 in it but I have continued looking at other ETFs currently on the market.
Last month the Australian ETF provider Betashares started trialing their own version of the Vanguard auto-invest feature. So of course I jumped on board as I’ve had my eye on a few of their ETFs for a while now.
Some things are better than Vanguard, some things are worse. Betashares Direct is an investment platform that allows you to invest in any ETF listed on the Australian Stock Exchange (ASX), not just their own Betshares ETFs. Brokerage is free for buys and sells. They allow fractional share purchases. And they have an automatic investing feature called AutoPilot.
At the moment you have to request early access and I think it took me a week or two to get an account. It’s only available to iOS Apple users at the moment but will also be available to Android users and on the Web in the coming weeks or months.
I set up an AutoPilot plan to invest $100 per fortnight into QRE which is an Australian resources sector ETF. The whole $100 is invested because of the fractional share purchasing that they have and 100% of the dividends will be reinvested.
The thing that I really don’t like about the Betshares AutoPilot plan is that if you choose more than one ETF they’ll charge you an annual fee. So I won’t be adding more ETFs to my AutoPilot plan unfortunately.
I’ve also manually bought about $1000 worth of GEAR with Betashares Direct which is a geared fund of companies from the S&P/ASX 200 Index. I figured this could be my safe way of using leverage with zero chance of a margin call in the future.
And the other ETF I plan to get from Betashares is NDQ which is a NASDAQ-100 Index ETF.
ETF Portfolio Changes for the Month
I sold VAS! It’s one of the most popular ETFs from Vanguard Australia with a management fee of 0.07% p.a and follows the S&P/ASX 300 Index. I didn’t sell it because I didn’t like it, it was just a little too similar to VHY which follows the FTSE Australia High Dividend Yield Index. VHY has a slightly higher dividend yield and I’m trying to increase the overall yield of the ETF portfolio.
The intention was to never sell any ETFs ever but things change. There’s plenty of overlap between the six ETFs that I currently own but they differentiate themselves enough to warrant a place in the portfolio.
I’ve set myself a limit of ten ETFs and want them to be as diverse as possible. I hear you now: Why not just buy an all world index ETF and be done with it? And I say, where’s the fun in that?
I have also been looking into covered call ETFs like JEPQ or those offered by Betashares. And I’m thinking about Asia, Europe and perhaps developing countries. They’ll all be equity ETFs though as I’m not looking to diversify into other asset classes like bonds or fixed interest.
See the ETF portfolio from last month to see the changes.
Why So Many ETF’s?!
I’ve heard of some very wealthy individuals who have 2 or 3 ETFs for their entire stock portfolio. So they might have an all world index consisting of thousands of stocks from around the world, a bonds ETF and maybe a property ETF.
And that sounds like a solid portfolio to me if I’m sailing around the world on my mega-yacht. I wouldn’t want to be distracted by Mr. Market and his erratic mood swings as I would be busy swimming in the Mediterranean.
I’m still actively growing my wealth as I don’t own my own home and I would like to own a painting by Brett Whiteley, Fred Williams and William Dobell. If you know anything about Australian art you’ll know that these three paintings would cost more than my house. So I still have some big goals to achieve that require money.
Which means, I still put a lot effort into picking and choosing where I invest my money. I’m growing it rather than simply protecting it. So I’m diversifying and looking for opportunities to hopefully outperform the market and to increase my dividend income.
I focus most of my attention on individual stocks which holds the bulk of my assets and I’m using the same thinking to choose ETFs in this new portfolio. So I plan to put the majority of new money into the S&P 500 index, the NASDAQ 100 and the ASX 200. Outside of this core I’m looking at fast growing industries, leveraged ETFs and covered call ETFs to increase my dividend income.
At most I’ll have 10 ETFs and these are currently from 3 different companies: Vanguard, iShares and betashares. I would like an overall portfolio dividend yield of about 5% and still own plenty of growth companies.
And I guess I’m collector at heart. Why have two of something when you can have ten?
Total ETF + Index Funds Portfolio for December
Portfolio value inside the Vanguard website: $3,429
Betashares ETF portfolio: $1,179
ASX listed ETFs held in brokerage account: $2,059
Total Index Funds portfolio value (VHY, VGS, VBLD, GEAR, QRE and IVV): $6,685
Most recent quarterly dividend payment (October): $52.90
All dividends paid in 2023: $102.68
All ETF dividend payments since buying $150.64
ETF Dividends Goal: $2,000+ per year.
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