Rate my portfolio ! Etf/Stock [Europe]

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LordMimosa
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Joined: Fri Jul 14, 2017 6:30 am

Rate my portfolio ! Etf/Stock [Europe]

Post by LordMimosa » Fri Jul 14, 2017 6:44 am

Hi All !

I'm a fresh new investor, and I'd like some advice/point of view about my portfolio - I live in Europe (I think it's important).
At the moment I have a portfolio with a value of 11.000€ (around 12.500 $), containing :
8% AMZN
45% VTI (ETF)
38% VXUS
9% BND
--------------------------------------------
So I know, the AMZN part is probably not a good option as VTI already contains that stock, but I really think that their value will increase.
-Is it ok to mix ETF and stocks ?
-I would like to know what I should "buy" next, do you think that the proportions are good ? I can invest 1000€ each month, and I plan to buy mostly VXUS and VTI (with around 10% of BND) ? I know that I should buy more VXUS than VTI but I have the feeling that it's less risky to buy US stock at the moment (especially with the Brexit etc).
Also, do you think it would be a good idea to add some high yield ETFs to that portfolio ? If yes, which one do you suggest ?

Thanks !
LordMimosa :D

TedSwippet
Posts: 1399
Joined: Mon Jun 04, 2007 4:19 pm

Re: Rate my portfolio ! Etf/Stock [Europe]

Post by TedSwippet » Fri Jul 14, 2017 11:18 am

LordMimosa wrote:I'm a fresh new investor, and I'd like some advice/point of view about my portfolio - I live in Europe (I think it's important).
Which country?

If your country lacks a US income tax treaty then you can probably reduce your losses to US taxes by switching from Vanguard's US domiciled ETFs to its Ireland domiciled ones. Residents of non-treaty countries pay 30% in US tax on US dividends, but residents of treaty countries and ETFs that are domiciled in treaty countries (including Ireland) pay 15% or less.

If your country lacks a US estate tax treaty then you will want to avoid holding more than $60k in aggregate in US shares and domiciled ETFs. Again, the solution here is to switch into equivalent (or as close as possible) Ireland domiciled ETFs. Ireland does not make non-Irish residents pay its estate or inheritance taxes.

More in this section of the site's wiki.

LordMimosa
Posts: 5
Joined: Fri Jul 14, 2017 6:30 am

Re: Rate my portfolio ! Etf/Stock [Europe]

Post by LordMimosa » Fri Jul 14, 2017 12:45 pm

Hi,

Thanks for your message ! Actually I live in Ireland :happy

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BeBH65
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Joined: Sat Jul 04, 2015 7:28 am

Re: Rate my portfolio ! Etf/Stock [Europe]

Post by BeBH65 » Fri Jul 14, 2017 1:14 pm

duplicate with next
Last edited by BeBH65 on Fri Jul 14, 2017 1:31 pm, edited 1 time in total.
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence).

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BeBH65
Posts: 856
Joined: Sat Jul 04, 2015 7:28 am

Re: Rate my portfolio ! Etf/Stock [Europe]

Post by BeBH65 » Fri Jul 14, 2017 1:30 pm

Hello LordMimosa,

Welcome to the forum.

One of the first and most important decisions to take is to decide on your asset allocation; i.e. the split between Equity and Bonds.
On this site many hold equity for growth and bonds for protection. Your AA should be determined by your willingness, need and ability to take risk. See Risk_tolerance.
You have an AA of 92/8. This seems low on bonds.

Looking in more detail on the bonds. You have selected USD bonds. As EURO investor this might not give you the protection that you wish. A lot of the performance for you depends on the USD/EUR exchange rate evolution.... as you might have noticed over the last months. Please consider exchanging this for a EURO bonds fund.

LordMimosa wrote:Hi All !

I'm a fresh new investor, and I'd like some advice/point of view about my portfolio - I live in Europe (I think it's important).
At the moment I have a portfolio with a value of 11.000€ (around 12.500 $), containing :
8% AMZN individual stocks are discouraged on this forum. The market has determined the price of this stock. Why do you think you kn ow more then the market? On this forum a "play account" of 5% of the portfolio is "tolerated"
45% VTI (ETF)
38% VXUS
9% BND
As Irish resident, you might be one of the few non-US residents for who holding US funds is better then holding Irish ETFs
--------------------------------------------
So I know, the AMZN part is probably not a good option as VTI already contains that stock, but I really think that their value will increase.
-Is it ok to mix ETF and stocks ?
-I would like to know what I should "buy" next, do you think that the proportions are good ? I can invest 1000€ each month, and I plan to buy mostly VXUS and VTI (with around 10% of BND) ? I know that I should buy more VXUS than VTI but I have the feeling that it's less risky to buy US stock at the moment (especially with the Brexit etc). Your equity AA is ok as it roughly matches the weights of the markets. That is good.
Consider keeping this at the same level with your new contributions. Buy the fund that is below its target allocation, As such you would be buying "low". Of course, first augment your bond allocation with EURO bonds. there is no need to hold any other fund as the ones that you selected basically already hold everything.

Also, do you think it would be a good idea to add some high yield ETFs to that portfolio ? If yes, which one do you suggest ?
Do you mean high-yield bonds? On this forum many consider there is no need for them in your portfolio. When things go well then it is better to hold equity as they have an higher expected return, if the market is bad, then the HY bonds tend to fall in line with your equity. Better to hold real equity and safe bonds

Thanks !
LordMimosa :D
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence).

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whodidntante
Posts: 2204
Joined: Thu Jan 21, 2016 11:11 pm

Re: Rate my portfolio ! Etf/Stock [Europe]

Post by whodidntante » Fri Jul 14, 2017 2:00 pm

I think your portfolio is fine, but you might be better off holding accumulating ETFs in Europe. You are just starting out. Savings rate is much more important than asset allocation in the beginning.

TedSwippet
Posts: 1399
Joined: Mon Jun 04, 2007 4:19 pm

Re: Rate my portfolio ! Etf/Stock [Europe]

Post by TedSwippet » Fri Jul 14, 2017 2:06 pm

LordMimosa wrote:Thanks for your message ! Actually I live in Ireland
Ah. In that case you should apparently entirely avoid Ireland-domiciled ETFs. :-)

LordMimosa
Posts: 5
Joined: Fri Jul 14, 2017 6:30 am

Re: Rate my portfolio ! Etf/Stock [Europe]

Post by LordMimosa » Fri Jul 14, 2017 3:23 pm

BeBH65 wrote:Hello LordMimosa,

Welcome to the forum.

One of the first and most important decisions to take is to decide on your asset allocation; i.e. the split between Equity and Bonds.
On this site many hold equity for growth and bonds for protection. Your AA should be determined by your willingness, need and ability to take risk. See Risk_tolerance.
You have an AA of 92/8. This seems low on bonds.

Looking in more detail on the bonds. You have selected USD bonds. As EURO investor this might not give you the protection that you wish. A lot of the performance for you depends on the USD/EUR exchange rate evolution.... as you might have noticed over the last months. Please consider exchanging this for a EURO bonds fund.

LordMimosa wrote:Hi All !

I'm a fresh new investor, and I'd like some advice/point of view about my portfolio - I live in Europe (I think it's important).
At the moment I have a portfolio with a value of 11.000€ (around 12.500 $), containing :
8% AMZN individual stocks are discouraged on this forum. The market has determined the price of this stock. Why do you think you kn ow more then the market? On this forum a "play account" of 5% of the portfolio is "tolerated"
45% VTI (ETF)
38% VXUS
9% BND
As Irish resident, you might be one of the few non-US residents for who holding US funds is better then holding Irish ETFs
--------------------------------------------
So I know, the AMZN part is probably not a good option as VTI already contains that stock, but I really think that their value will increase.
-Is it ok to mix ETF and stocks ?
-I would like to know what I should "buy" next, do you think that the proportions are good ? I can invest 1000€ each month, and I plan to buy mostly VXUS and VTI (with around 10% of BND) ? I know that I should buy more VXUS than VTI but I have the feeling that it's less risky to buy US stock at the moment (especially with the Brexit etc). Your equity AA is ok as it roughly matches the weights of the markets. That is good.
Consider keeping this at the same level with your new contributions. Buy the fund that is below its target allocation, As such you would be buying "low". Of course, first augment your bond allocation with EURO bonds. there is no need to hold any other fund as the ones that you selected basically already hold everything.

Also, do you think it would be a good idea to add some high yield ETFs to that portfolio ? If yes, which one do you suggest ?
Do you mean high-yield bonds? On this forum many consider there is no need for them in your portfolio. When things go well then it is better to hold equity as they have an higher expected return, if the market is bad, then the HY bonds tend to fall in line with your equity. Better to hold real equity and safe bonds

Thanks !
LordMimosa :D
I think you're right ! I will replace my BND asap with european bonds. And I sold my AMZN earlier today, I'll probably replace it with more VXUS :)

whodidntante wrote:I think your portfolio is fine, but you might be better off holding accumulating ETFs in Europe. You are just starting out. Savings rate is much more important than asset allocation in the beginning.
Okok - I'! At the moment I save between 1/3 and 1/2 of my salary (I earn around 2.4k/month after tax), + 8% before tax that I invest in a pension fund. I'd like to save more but it's really hard at the moment :annoyed .
TedSwippet wrote:LordMimosa wrote:
Thanks for your message ! Actually I live in Ireland

Ah. In that case you should apparently entirely avoid Ireland-domiciled ETFs. :-)
okok perfect then :D

LordMimosa
Posts: 5
Joined: Fri Jul 14, 2017 6:30 am

Re: Rate my portfolio ! Etf/Stock [Europe]

Post by LordMimosa » Sat Jul 15, 2017 4:07 am

Hi again folks !

I checked to replace my BND with something european and I can't find anything...
I just found an Ishare ETF but it's irish, and as you know I need to stick with Vanguard's ETFs because of the tax here in Ireland.
I thought about BNDX but :
-It seems riskier than BND
-It's not just European

Or I could take VECP or VETY :

VECP :
Vanguard EUR Corporate Bond UCITS ETF seeks to track the performance of the Index, a widely recognised benchmark designed to reflect the total universe of publically-traded, fixed-coupon, Euro-denominated investment grade corporate bonds with maturities greater than one year and which have a minimum issue size of EUR 300 million.

VETY :
Vanguard EUR Eurozone Government Bond UCITS ETF seeks to track the performance of the Index, a widely recognised benchmark designed to reflect the total universe of publically-traded, fixed-coupon, Euro-denominated Eurozone treasury securities with maturities greater than one year and which have a minimum issue size of EUR 300 million.

I have the feeling that they are not very "sexy", with "average" performance and an expense ratio of 0.12 :/

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BeBH65
Posts: 856
Joined: Sat Jul 04, 2015 7:28 am

Re: Rate my portfolio ! Etf/Stock [Europe]

Post by BeBH65 » Sat Jul 15, 2017 9:15 am

Hello LordMimosa,
LordMimosa wrote:Hi again folks !

I checked to replace my BND with something european and I can't find anything...good bond funds in
Euro are indeed not easy to fund.

I just found an Ishare ETF but it's irish what you will see is that most european ETFs will be irish, and even other european domiciles will be the same for irish residentschap, like portugues, german, .... and as you know I need to stick with Vanguard's ETFs the Vanguard ETFs that you selected below are also Irish, look at the ISIN number. because of the tax here in Ireland. what you will see is that most european ETFs will be irish, and even other european domiciles will be the same for irish residentschap, like portugues, german, .... , even the Vanguard ETFs that you selected below are also Irish, look at the ISIN number.

I thought about BNDX but :
-It seems riskier than BND
-It's not just European
non US bonds, hedgefunds to the USD....

Or I could take VECP or VETY :

VECP :
Vanguard EUR Corporate Bond UCITS ETF seeks to track the performance of the Index, a widely recognised benchmark designed to reflect the total universe of publically-traded, fixed-coupon, Euro-denominated investment grade corporate bonds with maturities greater than one year and which have a minimum issue size of EUR 300
when equity Goes doen , then corporate bonds tend to follow them. They do not give the protection that you need.

VETY :
Vanguard EUR Eurozone Government Bond UCITS ETF seeks to track the performance of the Index, a widely recognised benchmark designed to reflect the total universe of publically-traded, fixed-coupon, Euro-denominated Eurozone treasury securities with maturities greater than one year and which have a minimum issue size of EUR 300 million.

I have the feeling that they are not very "sexy", with "average" performance and an expense ratio of 0.12 :/
ok fund. Yes not sexy but your protection does not need to be sexy, it needs to give protection. Average is good, certainly if the volatility is low. ER of 0.12 is not bad in for a fund from outside of the US.
Other alternatives could be:
- government protected savings accounts or CD, if the % is decent.
- global bond fund; IGLO comes to mind.
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence).

LordMimosa
Posts: 5
Joined: Fri Jul 14, 2017 6:30 am

Re: Rate my portfolio ! Etf/Stock [Europe]

Post by LordMimosa » Mon Jul 17, 2017 3:31 am

Hi BeBH65,

thanks for your response !
I've found the rates in Ireland, and it seems "ok" - I can either invest in bonds or just saving (with 0.15% of interest, "lol" ).
Those are the rates for the bonds ;
National Solidarity Bond (10 Year) 16% tax free over 10 years, AER 1.50%
National Solidarity Bond (4 Year) 2% tax free over 4 years, AER 0.50%
Savings Certificates Interest 5% after 5 years, AER 0.98% tax free.
Savings Bonds Interest 1% after 3 years, AER 0.33%, tax free.
Instalment Savings Save for 1 year leave for five years, Interest 5.5% , AER 0.98%, tax free.

Obviously I would have to leave the money for a least 5 years (the interest for the other bonds are really not great, 1% after 3 years...).
I'd rather buy an ETF honestly, but I just can't find one - the IGLO is irish so I can't buy this one . I know that it's riskier to keep my BND, but at least I'm not "stuck" with them (like I would be with the CD) and the return seems better than the european ones. :moneybag :moneybag :moneybag

OR I can buy GOV bonds from a decent european country (ex : Germany/France/Netherlands - ofc I would avoid Greece/Spain/Italy..) ?
I've found this ETF :
http://www.morningstar.co.uk/uk/etf/sna ... 0P0000JNSN
The investment seeks to track the price and performance yield, before fees and expenses, of the Deutsche Börse EUROGOV Germany 5-10 index. Only German government bonds with a time to maturity of between 5 and 10 years qualify for the index. The maximum number of bonds in the index is limited to 15. Seems decent ?

There is this ETF as well- might do the trick : Lyxor EuroMTS All-Maturity Investment Grade :
"This passive fund is a highly compelling choice for investors seeking a core holding in the eurozone government debt market. The index tracks an all-maturity index covering both core and peripheral issuers with an investment-grade..."

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