CSP1 (SPY) or SWDA (World ETF)

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kosmicmisfit
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Joined: Sun Apr 29, 2018 9:53 am
Location: London, UK

CSP1 (SPY) or SWDA (World ETF)

Post by kosmicmisfit »

I have invested in SWDA after reading about 'investing in the world' on these blogs.

However, I was wondering if a US only focus investment via CSP1 would be a better idea. The rationale is if we compare returns of MSCI USA vs MCSI World. The 'the world' returned 8.6% since 1st Jan 1988 and 'US' only has returned 11.45. So I am not sure if a US only is not a better option?

I am sure there is a flaw in the thinking. So I would appreciate some feedback.

Regards

K

PS I live in UK.
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Re: CSP1 (SPY) or SWDA (World ETF)

Post by Misenplace »

This thread is now in the Non-US Investing forum.

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grabiner
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Re: CSP1 (SPY) or SWDA (World ETF)

Post by grabiner »

The standard advice you will always see is that past performance is not an indication of future results. The fact that US stocks outperformed non-US stocks in the past is not a reason to expect them to outperform in the future; investors all over the world are trading stocks at prices which give them the best expected return.

And since you are not in the US, you take more currency risk by holding entirely US stock. If the dollar falls against the pound, your US investments will be worth fewer pounds even if the US market doesn't move. But if, at the same time, the euro is stable against the pound, your European investments won't be affected.
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Re: CSP1 (SPY) or SWDA (World ETF)

Post by seajay »

kosmicmisfit wrote: Sat Jul 24, 2021 3:08 pm I have invested in SWDA after reading about 'investing in the world' on these blogs.

However, I was wondering if a US only focus investment via CSP1 would be a better idea. The rationale is if we compare returns of MSCI USA vs MCSI World. The 'the world' returned 8.6% since 1st Jan 1988 and 'US' only has returned 11.45. So I am not sure if a US only is not a better option?

I am sure there is a flaw in the thinking. So I would appreciate some feedback.

Regards

K

PS I live in UK.
Both IMO. FT250 (VMID) and CSP1. FT250 is small cap and somewhat value'ish in US scale. Two currencies (many firms hedge their foreign currencies exposure) is better diversification than a single currency concentration risk factor.
Topic Author
kosmicmisfit
Posts: 24
Joined: Sun Apr 29, 2018 9:53 am
Location: London, UK

Re: CSP1 (SPY) or SWDA (World ETF)

Post by kosmicmisfit »

All good points by the contributors.

I will stick to SWDA then!

Many thanks to all
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