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ETF Launch

Feb. 29, 2024
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Wiko Steyn
Author
Wiko Steyn

Building our $28K 10 ETF portfolio

Every market downturn is an opportunity to learn and become a better investor. DIVERSIFICATION has long proved itself to be a great risk management strategy and the easiest way to diversify is by buying low-cost index funds. On several occasions, Warren Buffet has warned investors against picking individual stocks. 

I don't think most people are in a position to pick single stocks, he said during the Berkshire Hathaway annual shareholdersmeeting. A few, maybe, but on balance, I think people are much better off buying a cross-section of America and just forgetting about it. 

In essence, buy a low-cost index fund. Buffett recommends the S&P 500, which holds 500 of the largest companies in the USA, from Google to Disney to ExxonMobil and hold onto it for a very long period of time.  

We will never claim to be part of the few that can beat the market, therefore we are allocating 40% of our entire $70000 portfolio to diversified ETFs. You might be wondering why we bother picking individual stocks in our Core Fund, Unicorn Portfolio, Safe Haven and Biotech Longshots? This is definitely a valid question and most investors should absolutely stick to Warren Buffet's advice and simply keep adding a percentage of their monthly savings to index funds. Contrary to this sound advice, we love analysing companies within our expertise and identifying hidden gems. In the end it is a balancing act, the riskier the stock, the smaller the position.    

We started with a 10% contribution to each ETF and we will continue to do this each month.

Let's have a look at our ten ETFs:

iShares Core S&P 500 ETF (IVV)  If Buffet recommends it, who are we to argue. America might be facing some serious economic headwinds but in the long term, this fund has averaged more than 10% return per year.

VanEck Vectors Semiconductor ETF (SMH)  Semiconductors are the new oil (well maybe not right now, seeing that oil is the new oil at the moment).  The digital world runs on semiconductors and this trend will continue into the foreseeable future. 

iShares MSCI Global Multifactor ETF (ACWF)  Own the world.

iShares MSCI Emerging Markets ETF(EEM)  This fund provide exposure to large and mid-sized companies in emerging markets.

iShares S&P Global Clean Energy Index ETF (ICLN)  The world is transitioning to cleaner energy and this fund should benefit.

Vanguard Dividend Appreciation ETF (VIG)  This low volatility fund also provides a healthy 1.94% dividend yield.

VanEck Vectors Rare Earth/Strategic Metals ETF (REMX)  This ETF provides excellent exposure to rare-earth and strategic minerals.

iShares Trust - iShares Global REIT ETF (REET)  Own property around the world with this high-yield fund. 

Vanguard FTSE All-World ex-US ETF (VEU)  Exposure to high quality companies outside the US.

Invesco QQQ ETF (QQQ)  This index includes the 100 largest non-financial companies listed on the Nasdaq based on market cap.



Disclosure

This is not financial advice and only the opinions of the author. The $28K in the ETF portfolio is not real money and only a demonstration of a typical portfolio. 


 

 


 


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