I just finished reading the Bogleheads’ Guide to Investing and checked the EU investing tab on the wiki. I am still left with a lot of questions as to implementing the Boglehead investing strategy in Europe. While I live in the Netherlands, I think Europeans will share some similar problems in finding index funds / ETF's and finding out a suitable asset allocation. I noticed a couple of Dutch bogleheads posting on this forum before, not sure if they are still around, but I would love to discuss our local situation with anyone interested.
Question 1. What funds / ETF's are suitable to the European situation?
The cheapest Vanguard fund access I could find in the Netherlands are with Meesman (NL), an index-investor brokerage firm.
- Meesman Global Stock Index Fund (=Vanguard Global Stock Index Fund (Investor share, EUR)) - 0.50% TER
- Meesman European Stock Index Fund (=Vanguard European Stock Index Fund (Investor share, EUR)) - 0.50% TER
- Vanguard Total International Stock ETF (VXUS) - 0.15% TER
- Vanguard FTSE Europe ETF (VGK) - 0.12% TER
- The Vanguard Brokerage Account allows for free ETF trading, but I do not know whether this is available for non-US investors.
- Opening an account through Today's Brokers (NL) could make transaction cost $5.00 per trade.
- When opened directly with their parent company Interactive Brokers in the US, it could be lower.
- When holding with Meesman, I invest in Euro. However, when holding with Vanguard USD denominated ETF's, I invest in USD. I assume investing in USD would give me currency risk? Should I hedge against that currency risk? The cost of valuta-exchange, transaction commissions and currency risk hedging might not outweigh the cost of higher annual TER with Meesman.
- Vanguard FTSE All-World ETF (VWRL) - 0.25% TER
- Vanguard FTSE Developed Europe UCITS ETF (VEUR) - 0.15% TER
If I understand correctly, the general advice for US investors is to hold ~80% US indices, and ~20% international indices.
This could be home bias (as the US is approximately 50% of global market cap), but could also be vested in currency-risk.
- Should a European investor hold ~80% European indices, and about 20% international indices?
- I'm leaning more towards 100% international indices, invested in EUR, but could this adversely affect currency risk?
Apparently there is a "Vanguard Eurozone Inflation-Linked Bond Index Fund", but the Minimum initial investment would be 100.000 (EUR).
- Are there other options? Did I miss some really suitable Vanguard / other Euro denominated ETF's?
- How would one know how much of total assets should be allocated to Eurozone Inflation-Linked Bonds?
Sorry for any stupid questions on my behalf, I know little, but crave knowledge.