The way we have constructed our ETF portfolio is such that we should have exposure to local equities, local bonds and international equities. In theory, a portfolio of 100% equities should provide the best returns for a couple of our age over the long-term. In practice, the volatility of the 100% equities portfolio can be a real test of your risk appetite. Turtle Investor has written a good post about how the ABF Singapore Bond Index Fund can act as a safe harbour during volatile times and I recommend it for an understanding of why we have it in our portfolio.
Our ETF portfolio is smaller than our share portfolio but we intend to build it up until both portfolios are about the same size. The idea is that the ETF portfolio has a lower dividend yield & volatility but the share portfolio has a higher dividend yield & volatility. A snapshot of our ETF portfolio can be found here.
I will try to provide end of month updates on our ETF portfolio as to the transactions we have undertaken for the month. Generally, we invest more in months where the markets are doing badly and less in months whether the markets are doing well. The aim is for the market value of the ETF portfolio to reach S$40,000 by 31 Dec 2016. I will be interested to see how our performance would be by the last update of the year.
By ETF market value you mean including the capital additions over the year? Almost 100% increase seems a very high expectation.
Furthermore, given the volatility of the market, have you ever considered dollar-cost-averaging?
Yes, including the capital additions and any increase in the market value of the ETFs. The plan is to Dollar-Cost Average by buying some of the ETFs every month. Agree that it is an aggressive goal but I would like to see whether its achievable!