The Rational Reminder Podcast · Thursday, July 2, 2026
The discussion explores whether it's worthwhile for investors to buy individual component ETFs instead of a single asset allocation ETF like VEQT, primarily for lower fees. Ben Felix calculates that a 14 basis point difference could amount to $300,000 over 30 years on a $1 million portfolio, but acknowledges the trade-offs in simplicity and potential for investor error.
“Is there a point at which you think it would be worthwhile buying the individual component ETFs of an asset allocation ETF instead of the single ETF? For example, the four ETFs within V E Q T. Specifically for the lower fees. By my calculation today, that would save 14 basis points.”
“Simplicity to me is huge. It's like one of the most important things in investing, especially if you're DIY-ing it. So I was just thinking about like how big of a deal is 14 basis points?”
“So I just did some quick modeling. I started with a $1 million portfolio today, and I invested $10,000 per year for 30 years, and I had the baseline portfolio earning 7% per year. And I found at the end of 30 years, you've got $8.6 million, ignoring taxes, just a very basic model. If you were instead earned 7.14% per year, so we're getting those extra 14 basis points, you'd have $8.9 million at the end. So around $300,000 in ending wealth or if we discounted back to today's dollars at 7%, it's just over $40,000 in present value terms.”
“The mental overhead here is a big one. The amount of time that you have to think about it. Depends how much you value your time, but compounded over many years, and in this scenario, your 30-year horizon, you're looking at.”