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Buying sector ETFs after a big kahuna


Axeman123

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Axeman123

I have been researching buying sector ETFs after a big kahuna (BK), as a strategy for the following reflation cycle. I was interested in the ease of rebalancing between sectors, and massive diversification available by using sector ETFs over individual shares. Avoiding foreign listed shares and dealing with associated withholding taxes also seemed an advantage. Sectors that I started looking at were basic materials, energy, and telecomms.

I thought I would share my thoughts so far for discussion, and rather than cluttering the credit deflation thread have started my own. People either already positioned and planning to hold through a BK or focussed on holding individual shares obviously have their own approach, and this thread is not intended as a rebuttal of anything.

A quick look on justetf.com threw up good candidates for basic materials and energy, tickers XDWM and XDW0. Both Xtrackers listed on the LSE and with 0.25% total expense ratio. Lists of holdings look great, and performance since the March 2020 lows are as you would want to see.

I would love to hear any thoughts, especially on the above ETFs.

A similar communications tracker looked promising (ticker XWTS), until I found 50% of it is holding over 50% in facebook/alphabet/disney/netflix! I can't find a decent telecomms sector tracker anywhere. Can anyone suggest alternatives?

 

Links:

https://etf.dws.com/en-gb/IE00BM67HS53-msci-world-materials-ucits-etf-1c/

https://etf.dws.com/en-gb/IE00BM67HM91-msci-world-energy-ucits-etf-1c/

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Formerly
26 minutes ago, Axeman123 said:

I have been researching buying sector ETFs after a big kahuna (BK), as a strategy for the following reflation cycle. I was interested in the ease of rebalancing between sectors, and massive diversification available by using sector ETFs over individual shares. Avoiding foreign listed shares and dealing with associated withholding taxes also seemed an advantage. Sectors that I started looking at were basic materials, energy, and telecomms.

I thought I would share my thoughts so far for discussion, and rather than cluttering the credit deflation thread have started my own. People either already positioned and planning to hold through a BK or focussed on holding individual shares obviously have their own approach, and this thread is not intended as a rebuttal of anything.

A quick look on justetf.com threw up good candidates for basic materials and energy, tickers XDWM and XDW0. Both Xtrackers listed on the LSE and with 0.25% total expense ratio. Lists of holdings look great, and performance since the March 2020 lows are as you would want to see.

I would love to hear any thoughts, especially on the above ETFs.

A similar communications tracker looked promising (ticker XWTS), until I found 50% of it is holding over 50% in facebook/alphabet/disney/netflix! I can't find a decent telecomms sector tracker anywhere. Can anyone suggest alternatives?

 

Links:

https://etf.dws.com/en-gb/IE00BM67HS53-msci-world-materials-ucits-etf-1c/

https://etf.dws.com/en-gb/IE00BM67HM91-msci-world-energy-ucits-etf-1c/

I'd be interested in any suggestions here. I'm struggling to find anything on Fidelity. The best I've come up with is IUKD at a TER of 0.4%.

I'm actually considering opening a second SIPP due to the lack of choice on Fidelity.

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Axeman123
5 minutes ago, Formerly said:

I'd be interested in any suggestions here. I'm struggling to find anything on Fidelity. The best I've come up with is IUKD at a TER of 0.4%.

I'm actually considering opening a second SIPP due to the lack of choice on Fidelity.

IUKD is interesting - "The Fund seeks to track the performance of an index composed of 50 stocks with leading dividend yields from UK listed companies, excluding investment trusts". Effectively an automated "dogs of the dow", but for UK only. 

Obviously with any of these index trackers the holdings composition would likely be very different after a BK. Maybe if FAANGs get slaughtered enough that communications one I posted would straighten up and fly right.

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working woman

Great idea for a thread.

A great way for beginners or more passive investors to invest in their chosen sectors. 

Gives diversity as the ETF invests in several companies.

Some more ideas:

Precious Metals

GDX - an ETF - Gold Miners

GDXJ - an ETF - Gold Miners, Junior

SSLV - an ETC - Invested in Physical Silver 

 

IUKD - a fund mentioned a while ago on the Deflation thread, and mentioned a few posts above.

           

            I think it buys the higher dividend payers in the FTSE 350. Largest holdings are in shares such               as BAT, IMP  (Tobaccos) VOD, BP plus a few others not discussed on the  deflation thread                    that may not be so great, such as Persimmon - house builder. 

 

 

 

 

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  • 3 weeks later...
Jesus Wept
Posted (edited)

Some ETFs that cover the indices.

% gains in brackets ytd -  since about April 2020 when I discovered this thread, S&S ISAs and using H&L…. I don’t hold any now. Sold and went into OPTIMiSM.

However I might return to these type of investment vehicles to spread risk and not have a POLY moment in the future…

2CB56F7A-6C51-41EA-9903-937585161C16.thumb.jpeg.9817d568b26f2decf40d04c6e4830178.jpeg6E5162D1-7248-4D95-AC7A-2C96ED287AE2.thumb.jpeg.281c222ecdfa4282ba59349a8ce4a253.jpeg

 

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