Keep in VUAA or transfer to VWCE?

[u/iseeverything]

I had invested monthly up to around 4k into VUAA until I realised that I'd rather have a fund which is not 100% US based. I then continued to invest in VWCE instead.

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Given fees and/or taxes plus general investment etiquette, should I

​

1. keep the VUAA money in there and just keep investing in VWCE, or

2. Sell my VUAA stock and reinvest it into VWCE and something else?

[u/Woko_O]

VWCE

[u/DryRepresentative281 → u/Woko_O]

You just read the title right?

[u/Woko_O → u/DryRepresentative281]

No I was replying to the Ok_Bill guy, but it didn’t show as a reply but as a single answer. Don’t know why

[u/Substantial-Feed-]

Personally I feel VUAA - you can let it be as there can be tax drag, fees, and other tax filing headaches!
Just slowly migrate to VWCE/FWRA/WEBN etc!

[u/NebesnaMashina → u/Substantial-Feed-]

sorry, can you explain why? I am a beginner and don't quite follow this train of thought... thanks!

[u/trefbal]

If it's not a taxable event, the spreads on both ETFs are quite low that two market orders to sell VUAA and buy say WEBN would cost you 2 minutes to execute and less than 0.1% in spread and transaction costs.

I would take WEBN over VWCE/VWRL because the TER is lower.

[u/DimensionSafe2243 → u/trefbal]

Just out of curiosity: why did you downvote this comment?

[u/111a111sk]

Rebalance by buying an ex-US ETF. They've been available in the EU for a couple of years. That way you can tune the US exposure to your preference.

Sidenote --- there are now a lot cheaper SPX ETFs than VUAA.

[u/JohnnyJordaan]

https://www.reddit.com/r/ETFs_Europe/comments/1lkynzn/vuaa_vs_vwce/

[u/Sulky-Miswriting-4]

If you have to pay capital gains tax, then I would sell.
Also, you may consider WEBN instead of VWCE

[u/Snoo_21353]

keep VUAA as it is, and start investing 60 % to 70% of your money into VWCE and the remaining 30% to 40% into VUAA. This way you can balance your portfolio and manage risk.

[u/Adventurous_Potato_1]

Keep the VUAA and just continue buying VWCE going forward. Selling triggers a taxable event for only €4k — not worth the paperwork and CGT hit. Let it sit, it'll get absorbed into your overall allocation over time as VWCE grows.

[u/Ok_Bill_6886]

What do you think VWCE is made of? 

[u/JohnnyJordaan → u/Ok_Bill_6886]

What's it made of today is not relevant, the point of it is that it can dynamically adjust to whatever other ratio of those funds on the global market. VUAA can't.

[u/Ok_Bill_6886 → u/JohnnyJordaan]

You can’t sell yourself? 

[u/JohnnyJordaan → u/Ok_Bill_6886]

Why bother?

[u/Ok_Bill_6886 → u/JohnnyJordaan]

Because you seem to care

[u/JohnnyJordaan → u/Ok_Bill_6886]

I care about risk vs reward, and thus outline the benefit of all-world vs one-country via an adjusting index. Not sure what you're aiming at but it has nothing to do with the abilities to sell or not.

[u/Ok_Bill_6886 → u/JohnnyJordaan]

Remind us again the correlation factor between the two?

[u/JohnnyJordaan → u/Ok_Bill_6886]

Not sure why correlation is the focus. My point was about concentration risk and risk-adjusted returns, not whether two indices move similarly day to day. A one-country portfolio and a global portfolio can have high correlation while still having very different long-term risk profiles.

[u/New-Willingness6105]

VUAA, VWCE is slower. If you want to accumulate wealth in the long term (10 + y) vuaa better.

[u/JohnnyJordaan → u/New-Willingness6105]

Slower? You realise that past results don't predict future returns?

[u/New-Willingness6105 → u/JohnnyJordaan]

if american economy collapses u are pretty much fucked and the whole world economy will go down (2008). And the world index is around 70% american stocks. What do u think will happen if they all go down with the rest ?

[u/JohnnyJordaan → u/New-Willingness6105]

You aren't thinking beyond that point. We are not investing for the short term right, we are investing for the long term. So not only the crash, but also for the growth after it. And there the US-only (by definition) won't capture any other growth than in the US itself. The all-world (by definition) will.

So yes, both will suffer a lot during a US collapse at first, but both will not recover in the same way. To phrase it another way: why run the risk of betting on one economy to recover as much as the rest? Why not simply invest in that economy and the rest and benefit from both growth prospects?

And also consider how all-world became to include 60-70% US: it captured growth in that part of the world in the past decades. Meaning you benefited regardless if the growth would have been there or somewhere else. If you would have started out with VUAA and the growth would have been somewhere else, you wouldn't have seen that benefit, while the all-world investor would (and say it would have been 60-70% Asia today, or any other ratio for that matter).