Q: My question is about building my etf portfolio. As I'm young and long term oriented, I would like to allocate a higher % to emerging market. Probably around 20%. I have analyzed many EM ETF and I have noticed how different in country allocation, value, sector allocation they are. Would they idea of buying, lets say 4 or 5 EM ETF that would represent that diversity, instead of one, make sense for you?
What would be the down sides? Cost doesn't appear to be one, has I can buy ETF for free, I don't mind the 'complexity' of rebalancing if my EM attribution goes up or down. I understand that EM might goes up or down has a group, but I found difficult to imagine that, in the longer term, an etf with 30% of Chinese shares and high PE and lots of tech, and one with more Indian, Russian and Brazilian shares, with low PE and energy would perform the same. Because I have no idea witch one will out or underperform, I would guess that this diversification would lower volatility and slightly decrease risk among my EM allocation. Feel free to comment this strategy or to challenge me about it.
What would be the down sides? Cost doesn't appear to be one, has I can buy ETF for free, I don't mind the 'complexity' of rebalancing if my EM attribution goes up or down. I understand that EM might goes up or down has a group, but I found difficult to imagine that, in the longer term, an etf with 30% of Chinese shares and high PE and lots of tech, and one with more Indian, Russian and Brazilian shares, with low PE and energy would perform the same. Because I have no idea witch one will out or underperform, I would guess that this diversification would lower volatility and slightly decrease risk among my EM allocation. Feel free to comment this strategy or to challenge me about it.
