I will start with I am aware that everything I am asking is speculative and very opinion based, I have looked into this my self. I can’t really come up with many satisfying answers myself, at this point in time. I know that this is a lot of questions to ask.
I’m already invested in these ETFS, 50/50 split:
WDIV (SPDR S&P Global Dividend Fund)
VHY (VANGUARD AUSTRALIAN SHARE HIGH ETF)
I am looking at adding a third fund ETF or LIC, this would be for the following purposes:
- Income generation.
- Portfolio diversification.
- Having part of my portfolio negatively correlated to the ASX share market, I would prefer if the fund rises in value when stock falls, stays the same value, or only drops marginally. I do not want to sacrifice too much income to achieve this.
These are the two funds I am considering:
AYF (Australian Enhanced Income Fund) http://www.etfwatch.com.au/data-analysis/AYF
- Is this fund likely to loose capital overall in the long term, not counting inflation?
- Is this fund very likely to mirror ASX shares in volatility?
- How badly do you think it would do in a GFC style environment?
- What are the odds of some the holdings being converted to regular shares?
- Are the higher fees worth it?
- Franking credits, I’m hesitant to pick an investment based of Franking credits, but at the same time I can’t ignore them completely.
PLUS (VanEck Vectors Australian Corporate Bond Plus ETF) http://www.etfwatch.com.au/data-analysis/PLUS
- Do you think despite having some junk grade bonds in the fund, that this will still be a defensiveness asset, is it likely show stability when share prices fall? At least 80% of this fund is made up of investment grade bonds.
- Is this fund likely to loose capital overall in the long term, not counting inflation?
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