IVV and VDHG

Hi Iris.

VDHG does already have quite a large allocation to US shares.

You might already know this, but that’s because VDHG is heavily invested in international companies, most of which is made up by US shares. Likely around 40% or so.

If you would like more exposure than that in your portfolio, then adding IVV would achieve this. So there’s nothing wrong with it if that’s the plan.

Hope that helps.
Dave

Holding both IVV and VDHG can be a strategic choice depending on your investment goals and risk tolerance. Here’s a breakdown of the pros and cons of holding both these investment options:

Pros:

1. Enhanced Exposure to the US Market: IVV, which tracks the S&P 500, provides concentrated exposure to large-cap U.S. stocks. This can be beneficial if you believe in the strong performance of the U.S. economy and its companies.

2. Diversification: VDHG, being a diversified, multi-asset fund that includes not just U.S. stocks but also stocks from around the world, bonds, and other assets, offers broad diversification. This can help in reducing risk as the performance of different asset classes can offset each other.

3. Simplicity in Diversification: VDHG simplifies the process of diversification across asset classes and geographies, which might otherwise require multiple funds or more complex portfolio management.

4. Balancing Volatility: The broader diversification of VDHG can potentially balance the volatility inherent in the more focused IVV, which is restricted to U.S. equities.

Cons:

1. Overlap in Holdings: There is likely some overlap in the U.S. equities between IVV and the equity component of VDHG. This could mean a higher concentration in certain stocks than intended, potentially increasing your exposure to specific sector or market risks.

2. Cost Considerations: Holding multiple funds can lead to higher total expense ratios (TERs) compared to holding a single fund. It’s important to consider how the costs of holding both funds impact your investment returns.

3. Complexity in Tracking: Managing and tracking multiple investments can be more complex than holding a single fund, requiring more time and a better understanding of how each fund fits into your overall investment strategy.

In conc

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Holding both IVV and VDHG can be a strategic choice depending on your investment goals and risk tolerance. Here’s a breakdown of the pros and cons of holding both these investment options:

Pros:

1. Enhanced Exposure to the US Market: IVV, which tracks the S&P 500, provides concentrated exposure to large-cap U.S. stocks. This can be beneficial if you believe in the strong performance of the U.S. economy and its companies.
2. Diversification: VDHG, being a diversified, multi-asset fund that includes not just U.S. stocks but also stocks from around the world, bonds, and other assets, offers broad diversification. This can help in reducing risk as the performance of different asset classes can offset each other.
3. Simplicity in Diversification: VDHG simplifies the process of diversification across asset classes and geographies, which might otherwise require multiple funds or more complex portfolio management.
4. Balancing Volatility: The broader diversification of VDHG can potentially balance the volatility inherent in the more focused IVV, which is restricted to U.S. equities.

Cons:

1. Overlap in Holdings: There is likely some overlap in the U.S. equities between IVV and the equity component of VDHG. This could mean a higher concentration in certain stocks than intended, potentially increasing your exposure to specific sector or market risks.
2. Cost Considerations: Holding multiple funds can lead to higher total expense ratios (TERs) compared to holding a single fund. It’s important to consider how the costs of holding both funds impact your investment returns.
3. Complexity in Tracking: Managing and tracking multiple investments can be more complex than holding a single fund, requiring more time and a better understanding of how each fund fits into your overall investment strategy.

Show more.....