New Investor From Greece

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Topic Author
Giorgin07
Posts: 2
Joined: Thu Feb 13, 2020 5:15 pm

New Investor From Greece

Post by Giorgin07 » Thu Feb 13, 2020 6:09 pm

Country of Residence: Greece

International Lifestyle: Living and working in Greece

Currency: EUR
Emergency funds: For more than 2 years
Debt: 25.000Euro Car loan at 8% ending at 06/23
Age: 35
Desired Asset allocation: 80% stocks / 20% bonds
Desired allocation to stocks outside your of country of residence: 100% of stocks


I've 100.000Euro at bank term deposit with a 0.55% interest.
I want to invest half of that amount and hold the other half at the bank.
As stated above i would prefer to take more risk and gradually as i get older i can reduce it.
I've highlighted those ETFs and would appreciate any though or suggestion.


1) iShares Core MSCI World UCITS ETF USD (Acc) (EUR) - 50% or
Vanguard FTSE All-World UCITS ETF (USD) Accumulating

2) iShares Core MSCI Emerging Markets IMI UCITS ETF (Acc) - 30% or
iShares Core S&P 500 UCITS ETF (Acc)

3) iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc) - 20% or
Vanguard Global Aggregate Bond UCITS ETF EUR Hedged Accumulating

assyadh
Posts: 140
Joined: Tue Sep 18, 2018 12:44 pm

Re: New Investor From Greece

Post by assyadh » Thu Feb 13, 2020 10:19 pm

I would get rid of that car loan as soon as possible. 8% is outrageous.

ICH
Posts: 226
Joined: Wed Jun 13, 2018 3:08 am

Re: New Investor From Greece

Post by ICH » Thu Feb 13, 2020 10:38 pm

Vanguard FTSE All-World UCITS ETF (USD) Accumulating and one of the bond funds (they're the same) is enough.

Having a car loan at 8% when you get 0.55% in term deposits, makes no sense. Pay it off. It will be the best investment. Assuming it is fixed rate, there will be some penalty for early settlement, but I guess will still worth it.

Valuethinker
Posts: 39420
Joined: Fri May 11, 2007 11:07 am

Re: New Investor From Greece

Post by Valuethinker » Fri Feb 14, 2020 9:04 am

Giorgin07 wrote:
Thu Feb 13, 2020 6:09 pm
Country of Residence: Greece

International Lifestyle: Living and working in Greece

Currency: EUR
Emergency funds: For more than 2 years
Debt: 25.000Euro Car loan at 8% ending at 06/23
Age: 35
Desired Asset allocation: 80% stocks / 20% bonds
Desired allocation to stocks outside your of country of residence: 100% of stocks


I've 100.000Euro at bank term deposit with a 0.55% interest.
I want to invest half of that amount and hold the other half at the bank.
As stated above i would prefer to take more risk and gradually as i get older i can reduce it.
I've highlighted those ETFs and would appreciate any though or suggestion.


1) iShares Core MSCI World UCITS ETF USD (Acc) (EUR) - 50% or
Vanguard FTSE All-World UCITS ETF (USD) Accumulating
Accumulating funds make taxes complicated in some countries. In the UK we only use them in tax protected accounts.

The 2 funds are pretty similar - which has the lower OCF (expense ratio)?
2) iShares Core MSCI Emerging Markets IMI UCITS ETF (Acc) - 30% or
iShares Core S&P 500 UCITS ETF (Acc)
If you want to hold EM in proportion to the world, it would be about 10% and 70% in the developed world fund (above)-- somewhere between 10-15%. For better or for worse, half the EM index nearly is China + Taiwan.

It is not clear to me why you would want to overweight USA (S&P 500) which is already 60% of world developed markets, nor why you would want an EM weighting which is 2 to 3 times its actual weight in a global index?

In terms of EM exposure lots of developed world companies have huge EM exposure. Think Nestle Unilever P&G just in the food sector. Any German industrial company and China. Ditto Daimler (Mercedes) and BMW. Airbus.
3) iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc) - 20% or
Vanguard Global Aggregate Bond UCITS ETF EUR Hedged Accumulating
Again either would do, depends on the expense ratio.

Again general comment on accumulating funds.

As per other posters, that's a very expensive car loan. Guaranteed return of 8% pa (less early repayment penalties) after tax, if you pay it off.

Mors
Posts: 220
Joined: Wed Aug 16, 2017 10:06 am

Re: New Investor From Greece

Post by Mors » Fri Feb 14, 2020 5:53 pm

Fellow Greek here.

Pay the car loan first, it trumps any investment returns on a risk adjusted basis.

Since you keep half your portfolio in fixed term deposit, I suggest investing only in a world index fund, like the Vanguard one. Accumulating ones are the best for our tax regime, but it makes little difference anyway.

Maybe consider moving another 10k in a global aggregate bond fund as soon as they mature for liquidity reasons (being able to rebalance in a downturn).

bogle_man
Posts: 18
Joined: Tue Apr 21, 2015 3:38 pm
Contact:

Re: New Investor From Greece

Post by bogle_man » Sat Feb 15, 2020 7:46 am

Let me also suggest a more radical approach to your car loan -- pay off the loan asap, sell the car and get another used, cheaper car instead. Invest the difference.

Topic Author
Giorgin07
Posts: 2
Joined: Thu Feb 13, 2020 5:15 pm

Re: New Investor From Greece

Post by Giorgin07 » Sat Feb 15, 2020 3:01 pm

Valuethinker wrote:
Fri Feb 14, 2020 9:04 am

1) iShares Core MSCI World UCITS ETF USD (Acc) (EUR) - 50% or
Vanguard FTSE All-World UCITS ETF (USD) Accumulating

Accumulating funds make taxes complicated in some countries. In the UK we only use them in tax protected accounts.

The 2 funds are pretty similar - which has the lower OCF (expense ratio)?
ishares MSCI has lower ER (0.20% instead of 0.22%) and is also free to buy from DeGiro,so i'll go with this one.
As Mors stated above,accumulating funds are better for our tax regime.
2) iShares Core MSCI Emerging Markets IMI UCITS ETF (Acc) - 30% or
iShares Core S&P 500 UCITS ETF (Acc)
3) iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc) - 20% or
Vanguard Global Aggregate Bond UCITS ETF EUR Hedged Accumulating
Would you suggest to stay with just 2 etfs,world and bond at an 80/20 ratio?
Or with the emerging market at an 90/10 ratio?
My first thing to do would be to repay the car loan,of course.. :D

Mors
Posts: 220
Joined: Wed Aug 16, 2017 10:06 am

Re: New Investor From Greece

Post by Mors » Sun Feb 16, 2020 6:26 am

Giorgin07 wrote:
Sat Feb 15, 2020 3:01 pm
Valuethinker wrote:
Fri Feb 14, 2020 9:04 am

1) iShares Core MSCI World UCITS ETF USD (Acc) (EUR) - 50% or
Vanguard FTSE All-World UCITS ETF (USD) Accumulating

Accumulating funds make taxes complicated in some countries. In the UK we only use them in tax protected accounts.

The 2 funds are pretty similar - which has the lower OCF (expense ratio)?
ishares MSCI has lower ER (0.20% instead of 0.22%) and is also free to buy from DeGiro,so i'll go with this one.
As Mors stated above,accumulating funds are better for our tax regime.
2) iShares Core MSCI Emerging Markets IMI UCITS ETF (Acc) - 30% or
iShares Core S&P 500 UCITS ETF (Acc)
3) iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc) - 20% or
Vanguard Global Aggregate Bond UCITS ETF EUR Hedged Accumulating
Would you suggest to stay with just 2 etfs,world and bond at an 80/20 ratio?
Or with the emerging market at an 90/10 ratio?
My first thing to do would be to repay the car loan,of course.. :D
Careful with the Vanguard vs iShares choice, the Vanguard FTSE All World includes emerging markets (and more mid cap), while the iShares Core MSCI world does not. If you want to hold only one etf, the Vanguard one is the best choice. The iShares one should be combined with a separate em etf, like the iShares core MSCI EM IMI. The bogleheads wiki has a sample portfolio page at the "eu investing" page.

Since you want to keep a large allocation in fixed term deposits, a simple but effective allocation is 50k in the Vanguard FTSE All World etf, 10k in the iShares Global Aggregate Bond etf and 40k in term deposit. You can substitute the vangurad fund with the iShares world (or the equivalent SPDR)+EM combo and you can eliminate the bond fund too, if you can withdraw relatively penalty free your fixed term deposit in case of the need for rebalacing.

Finally keep in mind that if you open a custody account with Degiro in order to avoid shares lending, you are getting heavily punished for receiving dividends, definitely go with accumulating funds in this case.

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