Best ETF (or stock/strategy) to passively invest long term

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Topic Author
d0tafr33d0m
Posts: 2
Joined: Sun Mar 31, 2024 6:08 pm

Best ETF (or stock/strategy) to passively invest long term

Post by d0tafr33d0m »

I am from Europe in my late 20s and I am new to investing overall. I have about 50k to invest. My job is well paid and I have saved quite a lot of money which I want to invest somehow as they are currently sitting in my bank without any interests.

I started doing a lot of research and in my country, I found out that only Trading212 and Interactive Brokers work. I created an account on both, although Trading212 seems easier to navigate for me.

I haven't purchased anything on either website yet, just made an account and it's been approved on both sites.

Now about my strategy and goals. Ideally, I want to invest a large portion of my money passively, without too much thinking. My plan is to invest for at least 20-30 years. This is long term, I am thinking about retiring from these investments, as I have no other backup (my only source of income is my job atm). I want to leave a small percentage (maybe ~10%) for some risky investments, like crypto, or individual stocks (like tesla, nvidia) etc.

Now about investing the rest of the 90%, from what I understood the best choice is to go with ETFs. Invest and forget for several years. Obviously the 50k I have right now are not the only money I'll be investing, in the future when I get paid monthly, I'll continue to invest portions of my income there as well.

So I started doing research on which ETFs to buy. I read a lot about US vs World vs other things, then different markets but at the end I concluded that it's best to be as diverse as possible, because betting all on one country or market isn't always the safest choice.

I came to these ETFs:

https://www.justetf.com/en/etf-profile. ... 00B4L5Y983 (SWDA) (IWDA)
https://www.justetf.com/en/etf-profile. ... 00BJ0KDQ92 (XWLD)
https://www.justetf.com/en/etf-profile. ... 00BK5BQT80 (VWRP) (VWCE)
https://www.justetf.com/en/etf-profile. ... 00B3YLTY66 (IMID) (SPYI) - has small caps
https://www.justetf.com/en/etf-profile. ... 00BKM4GZ66 (EMIM) - has small caps too, which I am not sure if it's better or worse in my case
https://www.justetf.com/en/etf-profile. ... 00B6R52259 (SSAC)
https://www.justetf.com/en/etf-profile. ... 000716YHJ7 (FWRG) (FWRA) - apparently still young, but nothing terrible can happen to make me lose all my money, maybe they just close the fund. lower fees than vwce

Additionally, I am aware of S&P 500 as well, but not sure if I want to bet on the US market solely.

What ETF would you recommend for someone like me? Or maybe another strategy?

My main candidates right now are VWCE and FWRA, but people saying FWRA might have tracking error higher than VWCE so the TER is not as important in such cases. But some other people say FWRA is equal to VWCE and a better choice due to lower TER. I did some math and the 0.07% different isn't that small when you put a lot of money over the years.
Additionally to this, I am thinking if I should also do S&P500 (some kind of split between SP500 and vwce/fwra), but unsure if that is a wise strategy.

Thanks in advance.
daviddem
Posts: 303
Joined: Wed Jul 06, 2016 12:53 pm

Re: Best ETF (or stock/strategy) to passively invest long term

Post by daviddem »

Which European country are you from?

As far as broker choice, I would take IBKR hands down over Trading212.

Great piece by Banker on Wheels about what to look for when choosing a broker:

How To Choose The Best Stock Broker?

There is a bit of a learning curve with IBKR, but nothing insurmountable for basic ETF / stocks trading. There are many resources and videos out there about how to get things done with IBKR.

We generally recommend world ETFs over S&P500 only. World ETFs already hold 60 to 65% US equities, so adding a S&P 500 fund to the mix only overweighs the US and tech giants even further. US stocks have outperformed the rest of the world in recent decades, but that may not remain the case forever... Watch Ben Felix videos about international diversification. He makes quite a compelling case.

There are also synthetic (swap based) world ETFs you might consider. They have an edge over physical ETFs in that they do not have to pay any withholding tax on dividends of US stocks.

https://www.justetf.com/en/etf-profile. ... 00B60SX394
https://www.etfstream.com/articles/blac ... global-etf
Last edited by daviddem on Tue Apr 02, 2024 7:48 am, edited 1 time in total.
earlgrey1
Posts: 1
Joined: Fri Mar 29, 2024 2:17 pm

Re: Best ETF (or stock/strategy) to passively invest long term

Post by earlgrey1 »

I think for simplicity purposes, it may be best to just go with VWCE - it's probably the most popular choice among European investors, and one of the largest funds. It's not a coincidence a lot of investors go for the "VWCE & chill" strategy. It's diversified across the world, and even has emerging markets, so you don't have to add those separately. No point adding S&P, as US equities already make up a large portion of the funds.
Topic Author
d0tafr33d0m
Posts: 2
Joined: Sun Mar 31, 2024 6:08 pm

Re: Best ETF (or stock/strategy) to passively invest long term

Post by d0tafr33d0m »

earlgrey1 wrote: Tue Apr 02, 2024 5:36 am I think for simplicity purposes, it may be best to just go with VWCE - it's probably the most popular choice among European investors, and one of the largest funds. It's not a coincidence a lot of investors go for the "VWCE & chill" strategy. It's diversified across the world, and even has emerging markets, so you don't have to add those separately. No point adding S&P, as US equities already make up a large portion of the funds.
Yes, I've seen "VWCE & chill" being suggested everywhere, but isn't FWRA technically the same thing as VWCE except it has lower fees? From what I understand, they both track the same index (all world) and have a similar graph for gains over the last few months. Do you see any potential issues with that ETF?
Siaigi
Posts: 143
Joined: Sun May 17, 2020 4:24 am
Location: Italy

Re: Best ETF (or stock/strategy) to passively invest long term

Post by Siaigi »

d0tafr33d0m wrote: Wed Apr 03, 2024 3:06 am
Yes, I've seen "VWCE & chill" being suggested everywhere, but isn't FWRA technically the same thing as VWCE except it has lower fees?
Actually Invesco FWRA has 2039 participations while VWCE has 3643 ones. I think you should see less volatility as a result but wait for more expert reply
michoco911
Posts: 227
Joined: Sun Jul 14, 2019 4:13 am

Re: Best ETF (or stock/strategy) to passively invest long term

Post by michoco911 »

FWRA AUM is 158M$
VWCE AUM is 9.98B$

Liquidity matters
60% VWRD 40% AGGG until further notice
vencat
Posts: 279
Joined: Thu Sep 10, 2009 6:30 pm

Re: Best ETF (or stock/strategy) to passively invest long term

Post by vencat »

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