Hi SWS team. I’m doing some thinking around a core satellite set up with my available funds to balance growth through the Investor strategy and a large position in 1-3 max Aussie currency ETF, following the signals exactly to have a simple low risk equity position that hopefully will deliver that 10%+ growth whilst negating the downside risk of large drawdown once in retirement.
My question is could we not have NDQ in the SWS universe? The Nasdaq usually outperforms the other index but we don’t have a signal for it, is there any reason? I would prefer it over IVV or IJH which I would otherwise use probably with some STW as well.I’m also slightly concerned about the lack of liquid in these ETF, they have large gaps between prices from when I’ve trade them in the past and low volume.
thanks guys, love the systems, you do a great job.
Hi Tim,
You can run a number of simulations using the 8 listed ETF’s in the SWS ASX ETF watchlist. I’ve gone through this exercise and produced a lesson on it here in case you’re interested in exploring things a little further.
Liquidity of ETF’s is created on a supply and demand basis by market makers who monitor orders and work in conjunction with other market participants to create or redeem ETF “units” as needed.
There are basically multiple pools of liquidity, one of which you can see as market depth and another that you wont see that is monitored and managed by the other market participants (market makers & ETF providers).
Here’s a link that discusses liquidity of ETF’s in more detail, from Blackrock.
NDQ, the ASX listed ETF that mirrors QQQ (NASDAQ Tech 100) started trading in 2015 and has much less data than the others in the SWS ASX ETF watchlist. The minimum historical data set that we’d require is 10 years, so it is getting closer. It’s one that we can place on the list for investigation a little further down the track.
When trading ETF’s on the ASX you’ll typically find that liquidity is best in the middle of the day and this is the best time to place any orders. The use of limit orders is preferred to reduce the potential slippage that you might experience outside these hours.
thanks David. I won’t need it for another 2-3 years so it would be great if you could keep NDQ on your potential watch list, I’d love to have that alternative to QQQ and I’m sure I’m not alone.
I’ll take a look at those links but must confess I’m not really up to speed with the software capabilities. One of those things I’m deferring to when I have ‘more time’. In the meantime thanks for everything the team does, my investing life is so much easier and stress less with SWS.
Tim, Feel free to book a coaching call at any time that suits you. You can use the links on the right hand side of any of the lessons in the Education Centre.
Regards,
David.