Best option for exposure to global markets?

[zb3]

I currently have 1/5th of my investment portfolio in Milford's global PIE fund. I am invested in other milford PIE funds and am happy with them, but the milford global fund just invests in other mutual funds from around the world as opposed to all the other Milford funds which actively pick stocks. The returns I am seeing from the global fund are average and the returns are high. I am looking at other options for some global exposure.

I was thinking of investing in the Vanguard Australia US total share market EFT on the ASX or the S&P 500 index offered by ishares.


Questions:


What do you personally invest in for exposure to global markets?
Is 1/5 of total investment enough global investment?, I have heard of some people recommending that 1/2 of your portfolio should be global


Any recommendations or advice would be appreciated.

Thank you.

[OldRider]

Present proportions for us are;

45% NZ
35% Australia
20% rest of world
We are slowly reducing Australia, reinvesting proceeds equally between NZ & rest of world.

We own Ishares,Vanguard, also on ASX PMC,MFF,TGG, plus some British Lic's, not recommending anything, simply
saying what we have.

[Okebw]

Mine is a very similar composition to oldriders.

50% NZ
25% Australia (recently reduced)
25% Global

Similar with regards to the global side of things too. The vanguard and ishare listings on the ASX make for a very convenient diversified investment with relatively low fees. The vanguard instruments having particularly low fees.

[RRR]

Just curious, why are you guys reducing exposure to Australia?

[Arndale]

Oldrider and Okebw, can I ask if you have invested in your global and Australian shares through a NZ broking firm?

I just had a a look at ANZ Securities (formerly direct broking) for their fees and management for holding UK and US shares. I haven't looked at other brokerage rates but you get stung with fees and management costs, so I guess you really need to know what you're doing otherwise your returns are eroded.

As an example investing in UK shares through ANZ Securities:

Brokerage of 0.06%, plus stamp duty of 0.05% (everyone who purchases shares is hit with this as far as I am aware), plus 0.25% per annum custody fee, plus minimum admin fee of $5 / month, all on top of the foreign exchange conversion to purchase your shares in the first place!

Am I right in then saying that you have to pay even more fees on ETF's (if you decide to purchase them) such as the Vanguard FTSE 100 ETF where you pay 0.1% on your holding per annum?

I guess, unless you really know what you're doing or are keen to take a serious punt, foreign investment is not for the feint hearted.

I'd be interested in your thoughts?

[noodles]

Oldrider and Okebw, can I ask if you have invested in your global and Australian shares through a NZ broking firm?

I just had a a look at ANZ Securities (formerly direct broking) for their fees and management for holding UK and US shares. I haven't looked at other brokerage rates but you get stung with fees and management costs, so I guess you really need to know what you're doing otherwise your returns are eroded.

As an example investing in UK shares through ANZ Securities:

Brokerage of 0.06%, plus stamp duty of 0.05% (everyone who purchases shares is hit with this as far as I am aware), plus 0.25% per annum custody fee, plus minimum admin fee of $5 / month, all on top of the foreign exchange conversion to purchase your shares in the first place!

Am I right in then saying that you have to pay even more fees on ETF's (if you decide to purchase them) such as the Vanguard FTSE 100 ETF where you pay 0.1% on your holding per annum?

I guess, unless you really know what you're doing or are keen to take a serious punt, foreign investment is not for the feint hearted.

I'd be interested in your thoughts?

A cheaper option is share cfds. I have used ig markets for london shares. They also do us market.

However, following a stock from abroad can be difficult because you know less about the underlying drivers in the economy.

You can get international exposure by buying local exporters. My fav is comvita.

Noodles

[Arndale]

A cheaper option is share cfds. I have used ig markets for london shares. They also do us market.

However, following a stock from abroad can be difficult because you know less about the underlying drivers in the economy.

You can get international exposure by buying local exporters. My fav is comvita.

Noodles

I admit to being a novice share investor, and I have to say that CFD's are a scary prospect especially when its a leveraged product and you can stand to lose a lot.

What were your experiences in dealing in CFD's? Was that net result profitable for you?

[noodles]

You are right to be scared. I would not recommend CFD's to novices. A lot of discipline is required. Position sizing is very important. You can get large positions with little money down.

Regarding profitability, it is not the platform that makes you profitable, it is the stock selection. So whether I traded through IG or direct broking, my returns would be much the same(ex-brokerage).

Not sure where you are at with your trading, but I think you should master your home markets first (asx and nzx) before moving offshore. If you are worried about portfolio allocation, you can always tap a fund manager. The new piefunds international fund seems to be doing well.

[Arndale]

You're right, I am well and truly a long way off of getting into off shore markets as at present I only dabble in the NZX. The whole CFD and derivative areas, to me at my stage, just seem like gambling. I'd have as much ability to return a profit from those means as I would winning Powerball by buying a Lotto ticket.

In terms of being profitable, I was meaning in overall terms of your selections, tallying up all your CFD trades (and costs), did they make you money?

[noodles]

You're right, I am well and truly a long way off of getting into off shore markets as at present I only dabble in the NZX. The whole CFD and derivative areas, to me at my stage, just seem like gambling. I'd have as much ability to return a profit from those means as I would winning Powerball by buying a Lotto ticket.

In terms of being profitable, I was meaning in overall terms of your selections, tallying up all your CFD trades (and costs), did they make you money?

It is not really important how my trading went as we will likely have completely different approaches. But since you are interested:
1. LONG ASX AND LSE - profitable
2. SHORT ASX - Profitable
3. SHORT LSE - Unprofitable
4. SHORT INDEX's - Unprofitable. I don't really class this as a failure as it is like insurance.
5. CURRENCY HEDGES - LONG NZD vs AUD Profitable

Overall, I returned 130% on my IG equity balance from 1/4/2013 - 31/3/2014. This is pre-tax and after all commissions and interest charged on leveraged positions.

But this profit is leveraged. If I was unleveraged, the return would have been much lower. Maybe 40%.

I have been trading for 14 years.