Which core ETF should I pick?

Many people like to have a core+satellite approach with their portfolio.

For the past 5 years, the S&P 500 has shown much better returns than the MSCI global index (SWDA) however.

A popular choice for a core ETF is either:

1. MSCI global index ETF (SWDA)
2. MSCI global Quality index ETF (XDEQ)
3. S&P 500 index ETF (VUAA or VNRA)

If we look at the performance over the last 5 years, the S&P 500 ETF VUAA has consistently performed better than the first two ETFs however.

But a global core holding would have less dependency on the USA.

XDEQ is a quality world ETF with a similar USA weighting to SWDA, but the Vanguard FTSE All-World ETF (VWRA) has 10% less USA exposure than SWDA.

So perhaps a good core ETF would be SWDA and then you could buy satellite ETFs within the S&P 500 such as IITU, IUCM and IUFS.

SWDA has beaten the Vanguard FTSE All World over 1, 3 and 5 years.

Four example portfolios might be:

1. 50% XDEQ + 50% VUAA (MSCI global + S&P500)
2. 50% XDEQ + 50% EQQQ (MSCI global + NASDAQ)
3. 50% VWRA + 50% VUAA (FTSE All World + S&P500)
4. 40% SWDA + 20% IITU + 20% IUCM + 20% IUFS (global + S&P500 tech, comms, finance)

I prefer no. 4 in this list because I can add funds into one or more ETFs each month depending on market trends and price at the time.

A higher risk S&P500 portfolio might be VUAA+IITU+IUCM+IUFS. This would have shown amazing returns over the last 5 years (+130%), but would also be volatile and very risky.

What are your main core ETFs and main satellite ETFs?

Note: This is not financial advice. Please do your own research.