UAE - UE expat seeking advice

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Topic Author
Methuselah
Posts: 6
Joined: Wed Oct 13, 2021 6:52 am

UAE - UE expat seeking advice

Post by Methuselah »

Country of Residence: United Arab Emirates

Nationality: France

International Lifestyle: Likely to gravitate part time in the medium term (5 years plus) between UAE, France and Mauritius

Currency: EUR/USD/AED

Emergency funds: about a years worth and growing

Debt:No loans, no debts, credit card is cleared immediately on a weekly basis.

Age: 35- married - no kids (none wanted) - wife bought a home here - fully paid off

Desired Asset allocation: 80% stocks / 20% bonds (not fully set on this)
Desired allocation to stocks outside your of country of residence: Open to suggestion. UAE stock market is rather tiny and the french one could leave me open to some nasty taxation.

I have been working overseas my entire career and have no state pension, stocks, bonds or any other plans. My current employer provides full health care coverage and life insurance. I've put some of my early career savings in businesses which could pay off in 5-8 years from now. I want to diversify myself with some long term strategy now that my career is on a comfortable growth path (unless I turn into a lazy person).

My salary has been affected by covid but I have been able to save around 35% of my salary - it is forecasted to get back to normal (and some) by end of 2022. I for one don't like to go the enron way (mark to market bs) and want to build on current foundations rather than focus on future savings. Wife is self employed - use to pull serious cash before covid but very little since. I'm basically carrying the household.

I have around 90.000 USD in cash that i'd like to commit to a portfolio of ETF's for 30 years. i can comfortably commit 2.000USD a month at the moment and more should the cuts end in 2022.

I have slowly educated myself for the past couple of months with a serious breakthrough a couple of days ago via the local bogleheads chapter. Before that I spent countless evenings trying to understand why and how the markets go up and down. I can still say today I have no clue how it will perform tomorrow.

I would consider myself to be a rather risk taking individual by trade and career but yet like to plan and strategize to not take high risk gamble. I apply the K.I.S.S principles to my everyday life (keep it simple and stupid) and find the Vanguard way to be exactly that. Ergo es here I am humbly stepping here for advice.
_______________________________________________________________


General investment account, taxable
100% cash (for investing – do not include emergency funds)
00% fund or ETF name (ticker symbol) (expense ratio)
00% stock company name


___________________________________________
Questions:
1. I'm looking for a simple non US ETF's bonds and stock portfolio with a global span. I take some Irish based ETF would be the first choice?

2. Being a EU citizen would going with Saxo make more sense than IB in terms of protection ? I understand from research that Saxo has higher fees.

Voila.

Looking forward to read from you ladies and gents.
000
Posts: 5452
Joined: Thu Jul 23, 2020 12:04 am
Location: Wake me up at the next crash

Re: UAE - UE expat seeking advice

Post by 000 »

Bump.
Dude2
Posts: 1526
Joined: Fri Jun 08, 2007 3:40 pm

Re: UAE - UE expat seeking advice

Post by Dude2 »

There are some back articles that you might search for using the search box, but specific advice for French investors does not appear to be something with a cut and dried response. My take is that things are complicated.

viewtopic.php?t=314380

https://www.bogleheads.org/wiki/EU_investing

https://www.bogleheads.org/wiki/Nonresi ... ciled_ETFs
Then ’tis like the breath of an unfee’d lawyer.
jg12345
Posts: 158
Joined: Fri Dec 11, 2020 1:03 pm

Re: UAE - UE expat seeking advice

Post by jg12345 »

1) Yes on Irish domiciled ETF

2) I have no comment regarding Saxo and IB. I know that many people here use IB, me included.

In the international lifestyle you do not say about retirement location intentions, but judging from what you've said it is hard to tell at the moment, so it's possible that AGGG (USD unhedged) would work for you. If you were certainly or most likely retiring in France then the EUR hedged version of AGGG would be better for you.

One note: for your 80% stocks, get an acc fund, not a dist fund (unless there are some tax implications that I am not aware of that would make dist preferable)
Topic Author
Methuselah
Posts: 6
Joined: Wed Oct 13, 2021 6:52 am

Re: UAE - UE expat seeking advice

Post by Methuselah »

It is highly unlikely I would retire or reside in France full time. Aside from what I will (maybe) inherit from my relatives everything I own is outside France and the EU.

I don't know if that changes anything.

Potential retirement drop-zone would be Mauritius as most of my family is living there. While I enjoy my home country I would avoid it like the plague due to its rather punitive taxation system. I didn't move to UAE to feed back to the ogre.
jg12345
Posts: 158
Joined: Fri Dec 11, 2020 1:03 pm

Re: UAE - UE expat seeking advice

Post by jg12345 »

Hi OP,

OK.

Then your choice for the bonds part ETF is either AGGU (USD hedged) or AGGG (USD unhedged).

Given that you are not a US-investor, one may suggest unhedged... but for your bonds you want lesser volatility, which you'd get with USD-hedged. I'd probably go for USD-hedged. Here is a paper that talks about it, but more relevant for US-based (or in economies highly tied to US) investors:
https://personal.vanguard.com/pdf/inter ... income.pdf

In case you are still undecided, you may want to
- open another post asking specifically for that question, and see whether you get answers, or
- go for 50% hedged and 50% unhedged.

Sorry I am not being so very helpful on this.
Topic Author
Methuselah
Posts: 6
Joined: Wed Oct 13, 2021 6:52 am

Re: UAE - UE expat seeking advice

Post by Methuselah »

Thanks for coming back on this.

Noted for the bond ETF

For stock ETF's I'm divided between 100% Vanguard FTSE All-World UCITS ETF


Or 70% Vanguard S&P 500 UCITS ETF and 30% iShares Core MSCI EM IMI ETF USD

I have scoured the forum and unless I have missed it I didn't find a compelling argument for one or the other. Am I in the right direction?
assyadh
Posts: 407
Joined: Tue Sep 18, 2018 12:44 pm

Re: UAE - UE expat seeking advice

Post by assyadh »

Methuselah wrote: Tue Oct 26, 2021 1:00 am Thanks for coming back on this.

Noted for the bond ETF

For stock ETF's I'm divided between 100% Vanguard FTSE All-World UCITS ETF


Or 70% Vanguard S&P 500 UCITS ETF and 30% iShares Core MSCI EM IMI ETF USD

I have scoured the forum and unless I have missed it I didn't find a compelling argument for one or the other. Am I in the right direction?
Why would you want 70% of your portfolio to be in 500 companies when you can get 8k+ different companies?

Plus, the top Holdings of the sp500 are just a few companies.

In Moliere's language: "L'option 1 est meilleure, plus flexible et plus diversifiée."
Topic Author
Methuselah
Posts: 6
Joined: Wed Oct 13, 2021 6:52 am

Re: UAE - UE expat seeking advice

Post by Methuselah »

So what do you recommend ? I understand diversification and am willing to hear you out.

I still believe that the S&P500 is an incubator for growth in my timeline of 10-20 years so its reasonable of me to put weight behind that. I do believe emerging has more room to grow but with more volatility.
jg12345
Posts: 158
Joined: Fri Dec 11, 2020 1:03 pm

Re: UAE - UE expat seeking advice

Post by jg12345 »

The recommendation was in French unfortunately :), and was for Vanguard FTSE all world ETF

I agree with the recommendation, FTSE all world much better than SP500.

Remember that judgments like "I believe SP500 is incubator for growth..." and similar ... they are only useful if you (believe you) know better than the market. If the market knows, they are priced in.

Unfortunately, I doubt that you have better information than the market. Financial analysts have expensive degrees, lots of data, and spend their extremely well-paid working lives looking at markets. I doubt you know better than them. So i'd suggest you go for FTSE all-world for maximum diversification and exposure.
Topic Author
Methuselah
Posts: 6
Joined: Wed Oct 13, 2021 6:52 am

Re: UAE - UE expat seeking advice

Post by Methuselah »

I don't deny the fact I know less than the market - It was more on a "balance" point. Having one ETF weighted on the US and one weighted ROW can be manually balanced while I'm unsure how the global one rebalances itself. :beer

Anyway i'm all signed up on IB - should be doing my first deposit on the 1st. Long may we prosper.
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