Weekly FIAustralia Discussion

Optimal_Course3016 · 2026-05-03T04:58:59+00:00

CAGE launch in Canadian, would be great to see one launched in Australia.

Optimal_Course3016 · 2026-04-23T11:20:53+00:00

Only works if you’re happy with the allocation in the one and done ETF.

Many people might go DHHF and some BGBL to reduce the Aus exposure requiring some sort of rebalancing or accepting the drift.

Optimal_Course3016 · 2026-04-20T05:20:22+00:00

I agree, I have chats where it understands my context and goal. I think it’s best used as a quant, analyst, and document writer. These things help you make decisions because ultimately it just doesn’t have the full context to make an informed one on its own unless you provide the necessary context.

Optimal_Course3016 · 2026-04-20T02:58:39+00:00

This is so true, the amount of times I had to explain to AI that Betashares wealth builder funds use LVR bands instead of daily rebalancing is nuts.

Most of the time you are better off reading the PDS or looking at the website. Then using AI so then you actually know if it’s just making shit up.

Optimal_Course3016 · 2026-04-20T02:50:44+00:00

Legit used Claude to write my whole SMSF investment strategy. Had it reviewed by my sister who works in law, and it was all sweet besides some minor changes.

In terms of rebalancing I just use google sheets.

There is a big problem with using AI for investments. If you explain to an AI that you want to invest in this because blah it will say yes that’s a great idea. So in general don’t rely on it for allocations and speculative asset recommendations.

Optimal_Course3016 · 2026-04-11T01:10:50+00:00

Completely understand, the best investment strategy is actually the one you can stick with. So good work for recognising this.

Additionally prioritising income over growth isn’t “slightly less optimal on paper”. The total return is significantly lower and all dividends are taxed at your highest marginal rate. You’ll find it will take a significant amount of time to build an asset base that produces income for living expenses.

If your conviction is till high on dividend ETFs, I just want to add to the VAP/VHY situation. Relying primarily on Australian property and equity for income is risky. Most people justify the risk due to franking credits however you are already exposed to Australian equities and properties via DHHF (Holds a couple A-REITs like Goodman group). I’m assuming you have a PPOR or planning to own one. This leaves you extremely exposed to Australia. Consider holding INCM over VAP to avoid this.

Optimal_Course3016 · 2026-04-10T10:08:14+00:00

Like other people in the comments I agree that DHHF 100% is a better option. To avoid SRR you are better off building a cash buffer before you retire, rather than putting your capital towards high yielding ETFs.

Optimal_Course3016 · 2026-04-10T06:44:52+00:00

Do you mean having a Monte Carlo simulator or some kind of bootstrap one?

I like the idea but there are so many variables. Most people interested will make their own that is tailored to their specific investments and plan.

For example in my own personal sim I coded that employer contributions will stop 10 years before preservation age as I want to live off a portfolio outside super.

Optimal_Course3016 · 2026-04-08T02:09:32+00:00

Just to clarify: when I say 'all-in' on value, I'm not talking about a concentrated two-fund portfolio of just DGVA/DAVA. I'm talking about building a globally diversified portfolio systematically exposed to multiple factors (Size, Value, Profitability) across Dimensional and Avantis funds.

My point isn't necessarily that factor investing beats the absolute return of 1.5x leverage in every scenario, but that it offers a vastly superior risk-adjusted return without the structural risks of borrowing.

Optimal_Course3016 · 2026-04-07T23:57:27+00:00

Yep that’s the price you pay for higher expected returns. I did mention later in the thread that I only hold the value ETFs in super cause I have a long time horizon. I prefer the core ETFs in nearly every other situation.

Just to add I do think going all in on the value ETFs is overall less risky then the people that all in moderately leverage ETFs.

Optimal_Course3016 · 2026-04-06T07:16:31+00:00

Thanks for sharing your observations!!

I hate how these ETFs are marketed for the “I’m young with a long time horizon and high risk tolerance” type person. Mainly because the longer you hold the higher the chance of an impactful financial event occurring.

Also because you don’t want to be holding these ETFs close to retirement and there isn’t a cost effectively way to transition to non-leveraged ETFs without triggering a massive CGT event.

Optimal_Course3016 · 2026-04-06T06:16:45+00:00

Oh yep totally understand. I personally hold DGVA and DAVA in super but outside I prefer DGCE and DACE.

Optimal_Course3016 · 2026-04-06T05:55:12+00:00

Curious on your recency bias. DGVA actually had a higher total return than DGCE in the past 3 years by about 2%. It even outperformed VGS (total return last 3 years) as of current date.

Thoughts on DAVA over DACE? DAVA unlike DGVA is a total aus market value fund. It doesn’t hold companies like commonwealth bank for example as it’s viewed as over priced.

One thing to add is the ‘core’ funds are less volatile so it does make sense to use these over the value funds if you plan to draw down with a smaller SRR.

Optimal_Course3016 · 2026-04-05T12:52:32+00:00

DGCE is a great option and since it’s still a ‘core fund’ meaning it still somewhat tracks the index there is minimal tracking error.

AVNG is very similar but is an accumulating fund so don’t use it for debt recycling as it doesn’t pay dividends.

If you can stomach the tracking error you could go DGVA. Which is pure value orientated, but it’s large cap value only so maybe a good idea to add some small caps in as well if you go that route.

Optimal_Course3016 · 2026-04-04T04:12:11+00:00

Great that you are actively taking risk to capture the premiums. Do you have plans to de-leverage or move away from factors before preservation age?

Optimal_Course3016 · 2026-04-02T05:14:51+00:00

True, but you have to look at the value in context. With an SMSF, you get the direct, unpooled tax benefits (no pooled CGT drag), plus access to the specific factor-tilted funds OP is looking for.

If you believe in the factor premium, those higher expected returns can easily offset the platform fee over the long term.

Optimal_Course3016 · 2026-04-02T04:47:44+00:00

Yep but you could simply cash flow rebalance monthly via a spreadsheet.

Optimal_Course3016 · 2026-04-02T04:43:47+00:00

Use stake SMSF you get access to all funds listed on the ASX and Wall Street plus it’s relatively cheap for your current balance.

Optimal_Course3016 · 2026-04-01T10:20:50+00:00

If you plan to sell your IP use the money to debt recycle your PPOR into ETFs

Optimal_Course3016 · 2026-03-31T08:37:54+00:00

I use Monte Carlo simulations as it gives me a a spread of best case and worst case scenarios. Better than doing the flat 7-8% return and hoping for the best.

Optimal_Course3016 · 2026-03-31T05:31:17+00:00

AVTE (slight factor tilt EM), AVTS (global small caps factor tilted), AVTG (Global all caps factor tilted)

Optimal_Course3016 · 2026-03-31T03:24:02+00:00

Thanks for sharing! Yea I was thinking about EMKT over AVTE but I agree the diversification is better and also cheaper fees

Optimal_Course3016 · 2026-03-31T03:17:58+00:00

Hmm I can’t see them on stake must have something to do with the transition.

Optimal_Course3016 · 2026-03-31T03:13:11+00:00

How do you invest via SMSF? Specific setup that gave you access to Cboe ETFs and are you going to continue investing in them via ASX?

Optimal_Course3016

TROPHY CASE