Advice Needed - Portfolio has serious home bias (Poland)

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Topic Author
Amangeldy
Posts: 2
Joined: Mon May 10, 2021 11:47 am

Advice Needed - Portfolio has serious home bias (Poland)

Post by Amangeldy »

Hello the Bogleheads community,

I'm very new to investing and need an advice. First for all, HUGE thanks to the bogleheads community. I learned a lot reading and listening to the Bogleheads Podcast and reading the books suggested by the Bogleheads.

I now need an advice on portfolio. I work and live in Poland and more than half of my savings go to two different mutual funds I have through my employer. The good thing is that I get an employer match on both of them. The bad thing is that they are very home biased (Poland).
- One is a Target Date Fund where 1/2 of equities are in Polish stocks (the other half are equally distributed in Total World Stocks) and 100% of bonds are in Polish Bonds.
- 2nd is an Equity fund where 100% of equities are in Polish stocks.

Now the dilemma is what to do with my other other savings I do on my own without the employer.

Ideally I would want to invest in Global Aggregate Bond and Total World Stock either via an MSCI ACWI etf or FTSE All World etf.
But I'm afraid if I do that my overall savings ill be extremely heavily biased towards Poland and underweighting US stocks.

Any advise, guys, what should I do?
I was thinking of investing my non-employer money into S&P 500. But once again, quite afraid of investing everything in one country stocks.

Anyone has the same issues here?

Huge thanks in advance,
Aman
User avatar
tre3sori
Posts: 258
Joined: Wed Jul 24, 2019 3:13 am

Re: Advice Needed - Portfolio has serious home bias (Poland)

Post by tre3sori »

Amangeldy wrote: Mon May 10, 2021 12:04 pm Now the dilemma is what to do with my other other savings I do on my own without the employer.
I don't have the same issues but here is my take on it:
Is there really a dilemma? As I understand you, you say that you don't have a choice regarding funds with employer match.
So you don't have a choice that your portfolio is home biased. You cannot mitigate your home bias by a bias towards another country. Poland has less than 0.05% weight in MSCI ACWI index and 0.32% in Bloomberg Barclays Global Aggregate Bond index. So you are not doubling up your home bias by investing in FTSE/MSCI ACWI/Bloomberg Barclays Global Aggregate Bond. My advise: invest the money where you have a choice the way you mentioned and go with for example iShares MSCI ACWI ETF/iShares Global Aggregate Bond ETF or the Vanguard combo (it won't matter). Just make sure that the overall percentages of bonds/equities in the whole portfolio are what you want them to be.
Over time and as you contribute relatively more to the funds of your own choice and less to the employer matched funds the home bias will decrease.
Let every man divide his money into three parts, and invest a third in land, a third in business, a third let him keep by him in reserve. Talmud | 35% Real Estate, 45% Stocks, 15% Bonds, 4% Gold, 1% Cash
Laurizas
Posts: 257
Joined: Mon Dec 31, 2018 4:44 am
Location: Lithuania

Re: Advice Needed - Portfolio has serious home bias (Poland)

Post by Laurizas »

Amangeldy wrote: Mon May 10, 2021 12:04 pm Ideally I would want to invest in Global Aggregate Bond and Total World Stock either via an MSCI ACWI etf or FTSE All World etf.
But I'm afraid if I do that my overall savings ill be extremely heavily biased towards Poland and underweighting US stocks.
Aman
How do you reach this conclusion? Because if you invest in MSCI ACWI you are decreasing Poland's share in you portfolio.
Topic Author
Amangeldy
Posts: 2
Joined: Mon May 10, 2021 11:47 am

Re: Advice Needed - Portfolio has serious home bias (Poland)

Post by Amangeldy »

@tre3sori,

Thank you. I guess I was overthinking. Indeed better not to complicate and just invest whatever I can control into a total world stock.

@Laurizas,

What I meant is that I cannot control the allocation of the money I invest via employer. They will go primarily into Polish stocks.
I was thinking if I should counter it with the money I have left and invest on my own without the employer offered mutual funds or not.

Indeed, whatever I can control, I will invest in the MSCI ACWI index.

Thank you!
Aman
Laurizas
Posts: 257
Joined: Mon Dec 31, 2018 4:44 am
Location: Lithuania

Re: Advice Needed - Portfolio has serious home bias (Poland)

Post by Laurizas »

Amangeldy wrote: Tue May 11, 2021 7:51 am I was thinking if I should counter it with the money I have left and invest on my own without the employer offered mutual funds or not.
You should and even more - you must. You already have enough exposure to Poland (job, real estate, future pension).
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