Dutch: seeking investment advice

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Topic Author
EnduroDon
Posts: 3
Joined: Thu Nov 24, 2022 4:28 am

Dutch: seeking investment advice

Post by EnduroDon »

Hi all,

Country of Residence: The Netherlands.
International Lifestyle: No, nothing special.
Currency: EUR.
Emergency funds: Yes, this is taken care of.
Debt: None.
Age: 30s
Desired Asset allocation: 100% stocks.
Current portfolio is rather limited. Invested in crypto, got lucky and managed to get out in time. Before crypto, I used to invest in ETFs (and actually spend quite some time on this forum). This is what I used to invest in:
VTI 60%
VXUS 40%

Questions:
Question 1. My usual investment (VTI/VXUS) is no longer possible. I still want to keep it as simple, diversified and low cost as possible. Since the platform that I use has a selection of ETFs that be traded without trading costs, I prefer those (see the list here: https://www.degiro.nl/tarieven/etf-kern ... RkQAvD_BwE).

I think a US + World (ex-US) is still a viable option. Therefore, I wanted to check with you guys whether the following combination is similar to what I used to do, and whether this is considered a wise choice. Again, I don't want anything special: simple, diversified and low cost, for the years to come.

Option 1:
ISHARES S&P 500 (IE0031442068) exp ratio of 0.07%
ISHARES MSCI WOR A (IE00B4L5Y983) exp ratio of 0.2%

Option 2:
VANGUARD S&P500 (IE00B3XXRP09) exp ratio of 0.07%
VANGUARD FTSE AW (IE00B3RBWM25) exp ratio of 0.22%

A combination of the above is also possible, but that doesn't really bring any significant gains, I guess.

Question 2. It is not possible to buy partial ETFs. Lets say I want to invest €500,- every month, and in general, I buy 3x US, 2x World for a total of €480, what do I do with the leftover €20? Accumulate that every month, until it is sufficient to buy another US or World ETF?


What do you guys think?

Thanks in advance,
ED
User avatar
tre3sori
Posts: 305
Joined: Wed Jul 24, 2019 3:13 am

Re: Dutch: seeking investment advice

Post by tre3sori »

This: VANGUARD FTSE AW (IE00B3RBWM25) exp ratio of 0.22%
and done!
With about 60% weight US equity is already heavy in all global equity etfs. So why overweight?

And yes, with 500€/month buy all the ETFs you can and save the rest until you can buy another ETF.
The price of most ETFs is sufficiently small. The opportunity costs are minimal.
With Berkshire Hathaway Inc. Class A shares (about 450000€/share) it would be a different story :)
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
pennywiser
Posts: 67
Joined: Sat Jul 16, 2022 1:54 pm
Location: UK

Re: Dutch: seeking investment advice

Post by pennywiser »

EnduroDon wrote: Thu Nov 24, 2022 4:40 am I think a US + World (ex-US) is still a viable option. Therefore, I wanted to check with you guys whether the following combination is similar to what I used to do, and whether this is considered a wise choice. Again, I don't want anything special: simple, diversified and low cost, for the years to come.
US + World (ex-US) = World
So you want a world fund.
EnduroDon wrote: Thu Nov 24, 2022 4:40 am Option 1:
ISHARES S&P 500 (IE0031442068) exp ratio of 0.07%
ISHARES MSCI WOR A (IE00B4L5Y983) exp ratio of 0.2%

Option 2:
VANGUARD S&P500 (IE00B3XXRP09) exp ratio of 0.07%
VANGUARD FTSE AW (IE00B3RBWM25) exp ratio of 0.22%
If you do any of these you'll end up with more than 80% of your porfolio concentrated in US stocks. Why do you think you want that?
jg12345
Posts: 317
Joined: Fri Dec 11, 2020 1:03 pm

Re: Dutch: seeking investment advice

Post by jg12345 »

EnduroDon wrote: Thu Nov 24, 2022 4:40 am Hi all,

Country of Residence: The Netherlands.
International Lifestyle: No, nothing special.
Currency: EUR.
Emergency funds: Yes, this is taken care of.
Debt: None.
Age: 30s
Desired Asset allocation: 100% stocks.
Current portfolio is rather limited. Invested in crypto, got lucky and managed to get out in time. Before crypto, I used to invest in ETFs (and actually spend quite some time on this forum). This is what I used to invest in:
VTI 60%
VXUS 40%

Questions:
Question 1. My usual investment (VTI/VXUS) is no longer possible. I still want to keep it as simple, diversified and low cost as possible. Since the platform that I use has a selection of ETFs that be traded without trading costs, I prefer those (see the list here: https://www.degiro.nl/tarieven/etf-kern ... RkQAvD_BwE).

I think a US + World (ex-US) is still a viable option. Therefore, I wanted to check with you guys whether the following combination is similar to what I used to do, and whether this is considered a wise choice. Again, I don't want anything special: simple, diversified and low cost, for the years to come.

Option 1:
ISHARES S&P 500 (IE0031442068) exp ratio of 0.07%
ISHARES MSCI WOR A (IE00B4L5Y983) exp ratio of 0.2%

Option 2:
VANGUARD S&P500 (IE00B3XXRP09) exp ratio of 0.07%
VANGUARD FTSE AW (IE00B3RBWM25) exp ratio of 0.22%

A combination of the above is also possible, but that doesn't really bring any significant gains, I guess.

Question 2. It is not possible to buy partial ETFs. Lets say I want to invest €500,- every month, and in general, I buy 3x US, 2x World for a total of €480, what do I do with the leftover €20? Accumulate that every month, until it is sufficient to buy another US or World ETF?


What do you guys think?

Thanks in advance,
ED
What the others said.

One little note: when people say "world ETF" they mean

- MSCI ACWI (all country world) ETFs
- FTSE all world ETFs

These includes developed and emerging markets

This clarification is needed to avoid confusion: MSCI World ETFs (such as the one you suggest, ISHARES MSCI WOR A (IE00B4L5Y983) exp ratio of 0.2%) only include developed markets, and Emerging Markets (EM) are left out. You do not want to leave on the table free diversification, so ACWI and FTSE all world ETFs are the way to go.
Topic Author
EnduroDon
Posts: 3
Joined: Thu Nov 24, 2022 4:28 am

Re: Dutch: seeking investment advice

Post by EnduroDon »

Hi all,

Thank you for the reply, good that I made this post, I see :). So, your advice, when I want to go 100% stocks, is to go 100%:
VANGUARD FTSE AW (IE00B3RBWM25) exp ratio of 0.22%, if I am correct.

Thank you for this. Time to arrange everything and start investing Jan '23.
User avatar
tre3sori
Posts: 305
Joined: Wed Jul 24, 2019 3:13 am

Re: Dutch: seeking investment advice

Post by tre3sori »

EnduroDon wrote: Tue Nov 29, 2022 1:55 am Thank you for the reply, good that I made this post, I see :). So, your advice, when I want to go 100% stocks, is to go 100%:
VANGUARD FTSE AW (IE00B3RBWM25) exp ratio of 0.22%, if I am correct.
Yes, you are correct.
I just want to hint at the existence of the accumulating version:
Vanguard FTSE All-World UCITS ETF - (USD) Accumulating (ticker VWCE, ISIN IE00BK5BQT80).
I don't know what is better (tax- and otherwise) in the Netherlands: accumulating or distributing.
Maybe another point to consider.
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
Topic Author
EnduroDon
Posts: 3
Joined: Thu Nov 24, 2022 4:28 am

Re: Dutch: seeking investment advice

Post by EnduroDon »

Nice, forgot about that one. Couple of years ago it was clear that 1 of the 2 was definitively the better option. Think it had to do with the dividend leak. I'll look into it and report back, for other dutchies also.
id_afstand
Posts: 83
Joined: Sun Nov 14, 2021 6:11 pm
Location: The Hague, NL

Re: Dutch: seeking investment advice

Post by id_afstand »

EnduroDon wrote: Tue Nov 29, 2022 7:50 am Nice, forgot about that one. Couple of years ago it was clear that 1 of the 2 was definitively the better option. Think it had to do with the dividend leak. I'll look into it and report back, for other dutchies also.
Both funds have the same dividend leakage, around 12%. For a Dutch investor it does not matter if you invest in VWRL or VWCE, dividends of Irish funds are not taxed.

You can look at VEVE (FTSE Developed, TER 0,12%) and supplement it with an EM ETF. Would be a few basis points cheaper. VEVE is smaller and has a higher bid-ask spread.
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