My global portfolio - Can it be better? [Brazil]

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Topic Author
hciboto
Posts: 10
Joined: Sat Jan 02, 2021 10:31 am

My global portfolio - Can it be better? [Brazil]

Post by hciboto »

Hi folks!

This is my global portfolio. I'm seeking for advice to improve it.
Allocation for 30 years

Help me with your opinion :D :moneybag

40% CXSP - iShares Core S&P 500 UCITS ETF (neutral tilt to quality)
15% IJR - iShares Core S&P Small-Cap ETF (size factor)
15% IWMO - iShares Edge MSCI World Momentum Factor UCITS ETF (momentum factor)
25% EIMI - iShares Core MSCI EM IMI UCITS ETF (neutral)
5% CXSE - WisdomTree China ex-State-Owned Enterprises (ESG tilt)


To keep some money in a opportunity reserve (in a crash these ETF would rise and be used to buy those above):
EDV or TLT or IEI or ITPS


I do prefer an Ireland domicile ETF to save taxes.


What do you think?
:sharebeer
SrGrumpy
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Re: My global portfolio - Can it be better? [Brazil]

Post by SrGrumpy »

What broker do you use? A minha esposa Paulistana just started at XP Securities, and I'm naturally suspicious.
Topic Author
hciboto
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Re: My global portfolio - Can it be better? [Brazil]

Post by hciboto »

interactive brokers
SrGrumpy wrote: Thu Apr 15, 2021 5:01 pm What broker do you use? A minha esposa Paulistana just started at XP Securities, and I'm naturally suspicious.
interactive brokers or tradestation global
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asset_chaos
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Re: My global portfolio - Can it be better? [Brazil]

Post by asset_chaos »

> 5% CXSE - WisdomTree China ex-State-Owned Enterprises (ESG tilt)

I thought ESG meant Environmental-Social-Governance, and an ESG tilt meant favoring companies with positive ESG characteristics. I was so surprised that a China fund, any China fund, would be so characterized, I looked up CXSE. At least by etf.com's methodology, CXSE scores 3.8 out of 10, a fairly poor ESG score.

Did you mean you were tilting away from ESG concerns?
Regards, | | Guy
Topic Author
hciboto
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Re: My global portfolio - Can it be better? [Brazil]

Post by hciboto »

asset_chaos wrote: Thu Apr 15, 2021 10:01 pm > 5% CXSE - WisdomTree China ex-State-Owned Enterprises (ESG tilt)

I thought ESG meant Environmental-Social-Governance, and an ESG tilt meant favoring companies with positive ESG characteristics. I was so surprised that a China fund, any China fund, would be so characterized, I looked up CXSE. At least by etf.com's methodology, CXSE scores 3.8 out of 10, a fairly poor ESG score.

Did you mean you were tilting away from ESG concerns?
Actually it's the main rule of the ETF to select only companies not owned by the government (max participation of gov is 20%).
This focus on companies oriented to generate return to shareholders and not to implement government decisions.

How about the rest of the portfolio, what do you think?
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galeno
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Re: My global portfolio - Can it be better? [Brazil]

Post by galeno »

Your port is unnessesarily over complicated.

Far better: X% VWRD + Y% AGGG
KISS & STC.
Topic Author
hciboto
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Re: My global portfolio - Can it be better? [Brazil]

Post by hciboto »

galeno wrote: Fri Apr 16, 2021 8:43 am Your port is unnessesarily over complicated.

Far better: X% VWRD + Y% AGGG
Your suggestion is a totally different portfolio. Other risk and return. Maybe its good for you but not for everybody.
I'm looking for advises of the idea built not looking for another idea without a reason.
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galeno
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Re: My global portfolio - Can it be better? [Brazil]

Post by galeno »

You are on a Boglehead board. Expect to get Boglehead answers. Welcome. :happy
KISS & STC.
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Forester
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Re: My global portfolio - Can it be better? [Brazil]

Post by Forester »

hciboto wrote: Thu Apr 15, 2021 2:52 pm Hi folks!

This is my global portfolio. I'm seeking for advice to improve it.
Allocation for 30 years

Help me with your opinion :D :moneybag

40% CXSP - iShares Core S&P 500 UCITS ETF (neutral tilt to quality)
15% IJR - iShares Core S&P Small-Cap ETF (size factor)
15% IWMO - iShares Edge MSCI World Momentum Factor UCITS ETF (momentum factor)
25% EIMI - iShares Core MSCI EM IMI UCITS ETF (neutral)
5% CXSE - WisdomTree China ex-State-Owned Enterprises (ESG tilt)


To keep some money in a opportunity reserve (in a crash these ETF would rise and be used to buy those above):
EDV or TLT or IEI or ITPS


I do prefer an Ireland domicile ETF to save taxes.


What do you think?
:sharebeer
Why not simply own Vanguard FTSE All-World ETF, then add whatever % of iShares MSCI World Small Cap you desire. What you posted looks fine, but is underweight Developed ex-US as far as I can tell.
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galeno
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Re: My global portfolio - Can it be better? [Brazil]

Post by galeno »

I agree. For his equities he could go 90% VWRD + 10% WSML.

Or 80% VWRD + 10% WSML + 10% VDEM if he wants to overweigh EM.

"Why not simply own Vanguard FTSE All-World ETF, then add whatever % of iShares MSCI World Small Cap you desire. What you posted looks fine, but is underweight Developed ex-US as far as I can tell."
KISS & STC.
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galeno
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Re: My global portfolio - Can it be better? [Brazil]

Post by galeno »

From his other post it appears the OP is a newbe. If he lives in the USA he's a US investor. He should NOT be buying UCITS ETFs. Period.
KISS & STC.
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galeno
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Re: My global portfolio - Can it be better? [Brazil]

Post by galeno »

For US investors use ONE total USA stock market fund (VTI, SCHB etc) domiciled in the USA.

For non-US investors use ONE total world stock market fund (VWRD) domiciled in Ireland.
KISS & STC.
DJN
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Re: My global portfolio - Can it be better? [Brazil]

Post by DJN »

Hi,
subject to the complications of owning funds and / or shares in Brasil I would suggest to anyone outside the US that can avail of accumulating index funds that they might choose VNGA from Vanguard. It is available in 20, 40, 60 or 80% equities and the remainder in bonds. Although the TER is a little elevated for a simple fund at 0.25% its the simplest and best solution for a buy and forget solution, avoiding unnecessary complexity.
VNGA80: https://global.vanguard.com/portal/site ... ocId=32409
Versions in distributing mode are also available.
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
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galeno
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Re: My global portfolio - Can it be better? [Brazil]

Post by galeno »

The OP lives in the USA. He's a US investor by definition.

A non-US Brazilian investor can open a brokerage account at IBKR. Should use UCITS ETFs to construct his portfolio. And keep less than $60 K in the MMF.

We use 2 UCITS ETFs. Both from Ireland Vanguard.

50% VWRD + 45% VAGU + 5% Cash.
KISS & STC.
DJN
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Re: My global portfolio - Can it be better? [Brazil]

Post by DJN »

galeno wrote: Fri Apr 16, 2021 2:55 pm The OP lives in the USA. He's a US investor by definition.
Hi,
I must say that I didn't pick up the US domicile bit. The OP doesn't seem to have said where he lived other than in the title of the post which states Brazil. So OP which is it Brasil or US?
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
Topic Author
hciboto
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Re: My global portfolio - Can it be better? [Brazil]

Post by hciboto »

DJN wrote: Fri Apr 16, 2021 3:16 pm
galeno wrote: Fri Apr 16, 2021 2:55 pm The OP lives in the USA. He's a US investor by definition.
Hi,
I must say that I didn't pick up the US domicile bit. The OP doesn't seem to have said where he lived other than in the title of the post which states Brazil. So OP which is it Brasil or US?
DJN
Living in Brazil but using IBKR to trade. Definitely I prefer accumulating ETFs.
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galeno
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Re: My global portfolio - Can it be better? [Brazil]

Post by galeno »

Accumulating ETFs are better for those accumulating for retirement. And vice versa for distributing ETFs.

The ETFs can reinvest the dividend and interest income cash far cheaper than you can.

"Living in Brazil but using IBKR to trade. Definitely I prefer accumulating ETFs."
KISS & STC.
Topic Author
hciboto
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Re: My global portfolio - Can it be better? [Brazil]

Post by hciboto »

galeno wrote: Fri Apr 16, 2021 4:39 pm Accumulating ETFs are better for those accumulating for retirement. And vice versa for distributing ETFs.

The ETFs can reinvest the dividend and interest income cash far cheaper than you can.

"Living in Brazil but using IBKR to trade. Definitely I prefer accumulating ETFs."
Well, I know that... but that's not the point of the post, right?
Do you have an opition about the portifolio distribution and assets in a way to aggregate knowledge to us all?
DJN
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Re: My global portfolio - Can it be better? [Brazil]

Post by DJN »

Hi,
just a couple of things which I am sure you are already aware of, (I am not Brazilian but I have some interests in Brasil).
Resident tax payers in Brasil are due to pay tax on their worldwide income.
As far as I know dividends are not taxed in Brasil, this might point to a preference for distributing funds. But this is for funds in Brasil, offshore funds are treated differently.
The treatment of taxes on fund earnings both dividends and capital gains need to be carefully understood for the Brasilian investor. The best part is that if you sell funds worth R$25,000 or less per month gains are tax free!
For offshore funds you probably need to use an offshore account and you will be taxed at 15% on dividends and 28% on capital gains.
There is no tax treaty between the US and Brasil and this means any investment over $60,000 may lead to estate tax problems later on.
Maybe have a peek at Bogleheads Wiki section here:
https://www.bogleheads.org/wiki/Investi ... #Dividends
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
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galeno
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Re: My global portfolio - Can it be better? [Brazil]

Post by galeno »

If a Brazilian opened up a local Interactive Brokers LLC Brazil brokerage account and bought snd held 80% VWRD + 20% VAGU would that be onshore or offshore?
KISS & STC.
DJN
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Re: My global portfolio - Can it be better? [Brazil]

Post by DJN »

hi,
as far as I know Brasil is an available country for opening an account with IBKR. I have not opened one there. The funds you mention are domiciled in Ireland so they would be considered offshore. There is no tax treaty between US and Brasil. (Tax matters are for the investor).
As far as I can see eToro and XP are preferred platforms for Brazilians, but best to ask a Brasilian investor.
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
Topic Author
hciboto
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Re: My global portfolio - Can it be better? [Brazil]

Post by hciboto »

Many thanks for the replies and suggestions about taxation. In fact Brazilians are free of paying capital gain in offshore assets if sells up to R$ 35.000 per month. Distributing dividend strategy is definitely not worth due to the withhold of 30% for US assets and 15% on the US-Ireland base ETF.

But the main thing of the post I would like suggestions and advice is the portfolio allocation.

Are there more efficient ETFs for theses purposes?
Would you make a better allocation aiming the risk exposure of the portfolio?
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