Well, lets hope so. In actual fact, the S&P will probably out perform this tilt, which is fine too.
Printable View
Well, lets hope so. In actual fact, the S&P will probably out perform this tilt, which is fine too.
I'm not so sure it will from here, particularly over the next 10 years. All depends on how long oil equities stay lower for your reinvestment of dividends.
For your consideration, WTI oil price averaged $71.76 from 2005 to 2010 and from 2010 to 2015 it averaged $91.80.
Think of how much every cost component has risen since then... Not to mention demand.
Oil is dirt cheap.
That's what I'm hoping too.
I just read this on Twitter from this guy called Eric Nuttal:
"Bernstein: even if EV's = 25% of total global car sales by 2025 and 50% in 2030, we will still consume the same amount of oil as we do today in 15 years (2038). Where exactly is the required production going to come from???"
Oil demand has got a long way to go. Don't write off oil.
But to be clear, I'm probably just a little above "market weight" if we're looking at the S&P 500 as a reference. The NZX50 has next to zero exposure to fossil fuels - plenty of "energy" but no black gold. So, because I own the NZX50, I've just added a bit here and there to make sure I'm not missing out.
My Australian dividend fund is helpful because of Woodside and the coal producers. And Kernel's Global 100 fund, which I adore, has a good amount - all the oil majors in good dollops. Plus I use it's infrastructure fund so I get a swag of energy exposure in that. Kinder Morgan, Enbridge, Cheniere. A ton of others. Not producers I guess but they do well when oil and gas is doing well.
VDE is a belts and braces, icing on the cake.
It sounds to me like you need to get yourself a good dose of the greatest fund in the world, BRK.
Your strategy is sound and will beat most people including most professionals but it won't touch BRK.
I doubt the Kernal fund will differ too much from the S&P500 which you could buy for ten times lower fees.
BTW - its Kernel. Just interesting you mention the fees. It sounds like you are an expert in this field, knowing all the fund fees. The Kernel Global 100 charges 0.25% p.a. in fees.
Are you saying your fund charges really only 1/10th of that - i.e. 0.025%? ... and comparing apples with apples, they still would help you to fit into the NZ tax system without playing the FIF lottery?
This what you are saying?
My fund has zero fees.
The fund I was talking about, yes around 3 basis points. 0.25% is theft.
FIF is not a lottery and without studying the situation I can't comment on that aspect.
I am nothing of an expert, but in the space of less than 3 seconds I could see Kennel, sorry Kernel fees were very high compared to what you can pay on a proper fund.
We are a third of our way through the 2020's.