What ETF to passively invest in?

As the topic of financial literacy becomes more widespread along with low-affordable brokerage fees. More people are starting to put money in the market and capitalised on the Compound returns! However, most people would get overwhelmed by the amount of information that they need to understand when engaging in DIY investing.   

If you have come to these three conclusions:

  1. Activity tracking your portfolio might not be suited for me.
  2. Mutual Funds are expensive to hold.
  3. I just want to DCA and forget about it

Do read on for my opinion on the best ETF to passively DCA in. (Please note this is just for education purposes and not financial advice).

Most Popular Stock Portfolio for passive investors.

If you were to browse the internet long enough you would find a lot of examples of “Lazy Portfolio”. The three most famous “Lazy Portfolio” are,

  1. Ray Dalio All Weather Portfolio implemented with 5 ETF
    The general portfolio composition is split between

    • 45% US stock(S&P 500 large cap), 
    • 15% commodities(Gold/Silver & Well diversify Commodities ETF),
    • 40% US Bonds( Short & long term bonds)  
  2. Three-fund Portfolio ETF
    portfolio composition is split between 60% US stock, 30% international stock, 10% Bonds
  3. Four-fund Portfolio ETF
    Split equally between,

    • International stocks
    • US Stocks
    • REITs, or Bond
    • S&p Small cap(Growth stocks) 

The composition of these two portfolio is to be followed loosely. Each individual investors are to modify the types of ETF they are holding based on their risk tolerance.

There are plenty of examples online where investors reveal their “Lazy Portfolio” holdings. Most people aren’t hedging for any downturn or holding complex derivatives for their portfolios. 

My personnal DCA Passive 4 fund portfolio 

Some important points for Non-US citizens, we are liable to a 30% withholding tax when we invest in the US market. We can reduce withholding tax by 15% if we purchase the equivalent funds from the Ireland domicile.

Back to the topic here is my personnel 4 fund portfolio,

  1. VWRL tracks international stocks. (25%)
  2. VNQ tracks USA REITs Market (25%)
  3. IUSA tracks S&P 500. (50%)
  4. EIMI tracks developing markets. (10%)

I have listed down below the most popular ETFs people regularly DCA in, with their details for easy comparison. 

#1 World ETF

#2 REITs

There are 3 REITs catorgery people like to invest in World REITs, USA REITs & Asia Pacific REITS. The best return for ROI is still the USA REITs VNQ.

World REITs

USA REITs

Asia Pacific REITs

#3 S&P

#4 Emerging Market