Alternative to Vanguard's (USA) etfs

[tigerbelly]

Dear all,

I've saved enough for my emergency fund and started to invest in mutual funds with my Nisa account.
The plan is to allocate my investment more or less like the Golden Butterfly portfolio https://portfoliocharts.com/portfolio/golden-butterfly/.

Question 1
Will it cut down my earnings significantly if I were to purchase Vanguard's Long and Short term bond etfs from Rakuten? Because of commission, currency exchange and etc?

Question 2
Any alternatives for
Vanguard Long-Term Bond ETF (BLV) and
Vanguard Short-Term Bond ETF (BSV)?

Question 3
Is the Golden Butterfly too conservative for someone in their 20's?

Cheers.

[StockBeard]

Question 3
Is the Golden Butterfly too conservative for someone in their 20's?

With 40% in bonds, and 20% in gold, I feel you're looking at 60% of your portfolio with no strong long term growth, and so I was going to say that in my opinion, yes, this looks too conservative for someone in their 20's.
BUT you're the only one who can assess your tolerance to risk. Going 100% stocks for example could probably be a "better" long term move for someone in their 20's, but you'd need a heavy tolerance for risk to do that.

I've been told numerous time that it's better to have a financial plan (any plan) and stick to it, rather than look for a "better" plan that you stop following as soon as you run into issues.

So, basically, if the golden butterfly is the one that makes you comfortable risk wise and that you'll be able to follow, it's doesn't look half bad.

I don't have any suggestion for your bond replacement. For reference, my wife has the following in her NISA (she doesn't have a Golden Butterfly portfolio). But the split there is in JP versus rest of world, rather than short term vs long term, so I don't think this matches your goals:
10% of Sumitomo JP Bond Index (https://site0.sbisec.co.jp/marble/fund/ ... rch_result )
10% of NISSEI Foreign bond index (https://site0.sbisec.co.jp/marble/fund/ ... rch_result )

[amattie]

The Golden Butterfly doesn't sound conservative at all -- on the contrary, it sounds like something dreamed up by a hippy on an LSD trip. (Strictly commenting on the sound here -- i.e. the name.)

[TokyoWart]

The Golden Butterfly doesn't sound conservative at all -- on the contrary, it sounds like something dreamed up by a hippy on an LSD trip. (Strictly commenting on the sound here -- i.e. the name.)

The "Golden Butterfly" portfolio is a modification of Ray Dalio's "All Weather Portfolio" and was suggested by someone at Portfolio Charts. Some explanation can be found here:

https://www.listenmoneymatters.com/all- ... butterfly/

I am not a fan of either of these portolios but I am certainly seeing declines in my all-equity portfolio during this Covid panic.

[tigerbelly]

Thank you so much.

I'm itching towards having more equity in my portfolio right now but not as much as TokyoWart's all-equity portfolio!

[jcc]

I've done the calculations on using vanguard ETFs before and in the end it turns out the due to currency issues and taxation issues that they OUTSIDE of a pure US only ETF(such as any S&P500 etf) that they are not any better than using a local low cost fund(not ETF). These calculations are here somewhere but it was a long time ago I posted them. Btw, I would not recommend putting all your stocks into the US. As good as results have been to date, past results are not a guarrantee of future results and diversification is important(you're also wide open to USD currency risk)

My personal recommendation is just choose whatever eMaxis slim fund fills your needs.

I'm also in agreement that 40% bonds and 20% gold is far too much for your age. I'm in my mid-30s and my portfolio is 20% bonds 80% stocks. I don't have anything in commodities, but if I wanted to I would take it out of the bond part.

Some people like to use your age = your bond allocation. Bring it up over time and it will reduce risk, bringing more stability to your portfolio. Additionally, rebalancing your bond/stock allocation from time to time will naturally result in you selling high and buying low.

What exactly you choose is up to you. I'd choose 10-40% total bonds/commodities etc, depending on your comfort levels with risk. Diversify your stocks geographically. Diversifying by cap size is fine too, but don't stick it all into one country.