facebookPlanning to DCA into CSPX. Would it be recommended to also DCA into another ETF like IWDA /VWRA for diversification? Which one of the two would you recommend and why? - Seedly

Anonymous

30 Sep 2020

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General Investing

Planning to DCA into CSPX. Would it be recommended to also DCA into another ETF like IWDA /VWRA for diversification? Which one of the two would you recommend and why?

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Both IWDA/VWRA are fine. Their performance are very similar, only difference is VWRA is more diversified by including a slice of emerging markets(China, India etc)

I wouldn’t recommend buying both IWDA/VWRA and CSPX together.

Over 50% of IWDA/VWRA are made out of the stocks in CSPX. If you buy both you end up overweighting US stocks.

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Nicholas Beh

30 Sep 2020

Student Ambassador 2020/21 at Seedly

If you plan on investing into CSPX, which tracks the S&P 500, there will be significant overlap if you invest in IWDA and VWRA as well, as these two track the MSCI World and FTSE All-World indexes respectively. Both have more than 50% exposure to US markets.

For diversification, VWRA on its own is a good option because it includes both developed and emerging markets. IWDA covers only developed markets. Should you still plan on investing into CSPX (perhaps due to strong growth prospects), you can additionally invest in EIMI for emerging markets exposure.

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