What are the best ETFs to invest in for a diversified long term portfolio?

As a new user, I want to take this chance to invest, while the stock market is low due to pandemic.

  1. Could anyone provide any advice on which ETFs to select for a diversified long term portfolio? (10 years plus)

  2. Also, from your knowledge of other platforms. How is the number and variety of ETFs on Freetrade? Do other platforms have many more and am I missing out on a number of them by solely being on Freetrade?

Thanks

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Freetrade lacks diversified bond ETFs but does have the VWRL (Vanguard FTSE All World) which is unhedged and the IWDG (MSCI World) which is hedged.

Contrary to the title the MSCI World is not the whole world but only developed countries.

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If you only want ETFs you may be better off opening an account with Vanguard and using the equity and bond funds to build a portfolio.

@sampoullain Thanks to the team for the Zoom call last night it was very informative. Adam mentioned with regards to ETFs, that the UCITS ETF Universe that are available on the LSE will be added. Can I push you to provide a time scale for this arrival as you have done for US stocks etc? I personally would like to see a more diverse selection from ETF issuers on this list:

https://www.lseg.com/markets-products-and-services/our-markets/london-stock-exchange/exchange-traded-funds/issuers

I feel this will become more important for EU expansion and also for SIPPs when they arrive. It would be great for everybody to have the choice to broadly diversify with ETFs or to target specific areas of the market. Thanks :smiley:

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cough (non covid)

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Hi Adam. I’m currently invested in a few of the iShares and Vanguard ETFs you offer which are great and I feel I’m as diversified as I can be at the moment, but I’d love to see some more options from some other competitive issuers. Also some interesting factor funds missing at the moment. I’m glad you mentioned on the Zoom meeting you are planning to include them but didn’t indicate a rough ETA :sob: . Cheers

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Great to meet another ETF fan!

You’re right, we could do much better in our coverage of ETFs. I think we have the basics covered so anyone could create a balanced diversified portfolio for free.

More fixed income ETFs is super relevant right now for sure. We’ll be expanding and rejigging the stock universe in the next few weeks, and will continue to do so afterwards.

One thing we’ve noticed in the past few weeks is that ETFs with relatively low liquidity are showing unusually large spreads due to the volatility, so we’ll probably be adding the higher volume securities first.

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I already had a Vanguard ISA (which I would like to transfer to FT when fees get to £3/mo equivalent).

In FT, I invest 20% of total monthly in 2 ETFs, for medium/long term:
IITU - US Tech Sector
INRG - Global Clean Energy

I’m fairly new to this, and not sure if this is the most effective plan (i.e. don’t take it as advice), but it works for me with limited time to devote to research. I feel that as long as you are intentional with your investments, over the long term you should be ok.

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There are some on the platform yes but not enough to be able to build a balanced portfolio, I believe. We are missing:

  • A fair number of Vanguard ETFs (in particular Global Aggregate Bond and FTSE Developed World).
  • Hedged versions of everything bar the MSCI World ETF.
  • Long-term US government debt because 7-10 year debt is medium not long term as stated in the Freetrade description (and all other US debt but hedged).
  • Individual country ETFs (especially all of the MSCI country ETFs).
  • Hedged commodity ETFs alongside more commodity ETFs.
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Vanguard FTSE Developed World ETF with an expense ratio of 0.12% is a must.

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Just curious as to why you choose the IITU over the EQQQ ETF?

Simply because the % of monthly spend going to that ETF is less than EQQQ price. Waiting patiently for fractional shares :slightly_smiling_face:

@brightluke no-one can predict what the best ETF will be (annoyingly!). You might start with a stock tracker that is as global and low cost as possible like VWRL and a gov bond tracker like VGOV, bought in a ratio to suit your attitude to risk, goals, age etc.

You can modify the plan in future, but it would be a solid start in my not-a-financial-advisor opinion. Good luck!

Just make sure you are comfortable with the allocations in the IITU. It only contains companies labelled ‘Information Technology’ in the S&P500 so misses out many big names that feature in the NASDAQ100 (i.e. Amazon and Google).

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IITU has Microsoft and Apple but it’s missing a lot of the other big tech companies

But I agree with you on EQQQ. Just a a small issue with the price making it less accessible but hopefully we get fractional ETFs this year to help with that.

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Good point I wrote out the list and meant to remove them before posting… have edited now.

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Hi Matt, great to hear you enjoyed the call - thanks for taking part!

As Adam mentioned, there’ll stock additions over the next few weeks, which will be a batch of US stocks first, then we’ll be in a position to look in more detail at more additions.

We don’t have any more timescales on more ETFs right now, but we’ll share more information on these additions when we have it.

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On Freetrade I personally like Scottish Mortgage Investment Trust, iShares S&P500 Health Care ETF, and Finsbury Growth & Income Trust.

Give me exposure globally, US health care, and the UK.

I like funds with a good past performance, which is why I have a mix of ETFs and Trusts. If you don’t mind higher fees the trusts could be interesting.

I am trying to invest for the next 10-15 years. Let me know what you end up buying, I always like to compare notes!