Modified Golden Butterfly Portfolio

A place to talk about speculative investing ideas for the optional Variable Portfolio

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senecaaa
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Re: Modified Golden Butterfly Portfolio

Post by senecaaa » Fri Feb 05, 2021 8:28 am

tarentola wrote:
Fri Feb 05, 2021 7:15 am
Looking for suggestions please. I have a Euro PP which contains Euro Large Cap shares (Sanofi, Renault, VInci, Luis Vuitton etc). At the moment the PP is not far off 4x25%, being 29/20/25/26% stocks bonds gold cash.

For simplification, I am closing a small account elsewhere, and would like to use the funds there to transform my PP into a Golden Butterfly. This would result in proportions of 16 % new, 24% Euro shares, 17% bonds, 21% gold, 22% cash. By chance, this comes to 40% shares, perfect for a GB.

For more simplification, I am moving towards ETFs rather than individual shares.

I would like to take this opportunity to diversify. My question is: what ETF to buy for this 16% section of the portfolio? My preferences are more or less in this order:
- A World ETF, which would be about 60% US
- Small Cap US
- Large Cap US
- Small Cap Europe
- Emerging Markets

What do you think?
I also have an EU/US mixed GB portfolio, but no world ETF nor Emerging markets.
My ETFs for the other asset classes:

- Small Cap US: VBR
- Large Cap US: VTI
- Small Cap Europe: CSEMUS
tarentola
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Re: Modified Golden Butterfly Portfolio

Post by tarentola » Fri Feb 05, 2021 9:11 am

Thanks Senecaaa. In what relative proportions do you hold the Euro and US ETFs? I am inclined to 50% US and 50% Euro, but that is arbitrary.
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Re: Modified Golden Butterfly Portfolio

Post by senecaaa » Sat Feb 06, 2021 2:25 am

tarentola wrote:
Fri Feb 05, 2021 9:11 am
Thanks Senecaaa. In what relative proportions do you hold the Euro and US ETFs? I am inclined to 50% US and 50% Euro, but that is arbitrary.
Yeah 50/50
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Re: Modified Golden Butterfly Portfolio

Post by tarentola » Sat Feb 06, 2021 3:26 pm

I just found an three-part article by Siamond on the Bogleheads blog on world stock investing for non-US investors:
https://www.bogleheads.org/blog/2020/03 ... ld-part-3/

The article concludes:
World 80%, Domestic Tilt 20%
Let’s cut to the chase a little bit. After playing with historical numbers for a while, the author hypothesized that splitting stocks 80% global world and 20% domestic would have displayed fairly good properties in the past 50 years (1970-2019), a sweet spot of sorts. It would certainly have helped a local investor in countries with the worst track record (e.g. Italy, Spain, Japan) to mitigate various types of risk.
Of the World index, the Eurozone is about 10% and the US is 65%, so the 80-20 split above would result in 52% US and 28% Eurozone, with 20% rest of world. That fits with the 50% US mentioned above.
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