Christopher Ong asked 2 years ago
In the section on portfolio management we are taught that in order to have a diversified dividend portfolio we should aim to have approx 20-30 dividend stocks consisting of about 3-5% of the portfolio each. I know this applies if we pick individual dividend stocks, but does this still apply if we include an ETF as part of the portfolio?
For example, if I decide to invest in the NikkoAM STC Ex-Japan REIT ETF (CFA / COI) rather than individual REITs, should that ETF make up 3-5% of my portfolio or make up the total percentage i would have originally decided to allocate to REITS?
E.g. if say i was going to buy 5 different REITs (which would make up that 3-5% each), but bought the ETF instead does that mean the ETF should make up 15-25% of the portfolio?
1 Answers
Rusmin Ang Staff answered 2 years ago
Hi Christopher,
For pure play ETF portfolio, I think one can afford to be more concentrated and keep it less than ten. ETF is already a diversified fund by itself and one can simply pick and choose the type of exposure, i.e. strategy, geography, sector, etc. If you decided that REIT ETF is better than individual ETF, then you can definitely allocate up to 10-20% in that one REIT ETF, depending on your risk preference.
Please login or Register to submit your answer