EU investing

This article contains details specific to investors in the European Union (EU). However, it is not intended for residents of the EU who are also United States (US) citizens or US permanent residents.

EU investing shows how you can apply the Bogleheads investment philosophy if you live in the European Union (EU). As well as the topics described in the Bogleheads® investing start-up kit for non-US investors and Index funds and ETFs outside of the US, there is some additional information below.

Your domicile is usually the determining factor for many legal aspects, including investing and taxation. Investment funds also have a domicile, and here this too determines the applicable legislation, including taxation.

Introduction

European MiFID II and PRIIPs regulations make it difficult or even impossible for residents of the EU community to purchase funds domiciled outside of the EU. See below for more.

There are few low-cost index mutual funds available in the EU, but there are a lot of index exchange-traded funds (ETFs) available. You can find all the ETFs available in the EU at etfinfo.com. These ETFs are usually domiciled in Ireland or Luxembourg. You should consult with your tax advisor before investing in ETFs. You must carefully read the Key Investor Information Document (KIID) and the prospectus of each ETF you choose. Look for important tax-related information such as registration and reporting in these documents.

The same ETF can have different share classes, and can be listed on several different stock exchanges in different currencies. Look for the ISIN code as unique identifier together with the name. Funds with different trading currencies will have a different ticker if traded on the same exchange. If the fund trades on different exchanges then it may or may not have the same ticker.

Some of the country pages in the Non-US domiciles wiki category contain sample portfolios or suggestions for (ETF) funds. While you can use these to draft a first portfolio it is good to post a question on the forum as every country is different and the recommendation might change over time.

Non-EU domiciled funds

If you plan on using non-EU domiciled funds, you need to be careful to understand the full implications.

For example, US domiciled funds distribute their income periodically, and you must pay withholding tax to the US government. US domiciled funds can also distribute capital gains to holders, something that does not happen with EU domiciled funds.

And depending on your country of residence, there may be other tax-related problems with US domiciled funds, for example US estate tax on holdings above just $60,000.

In short, US tax policy can make US domiciled funds unattractive to EU investors.

EU domiciled ETF providers

Fig.1.Brussels Euronext Exchange

The following are the major companies that provide EU domiciled ETFs. This list is not exhaustive.

• Amundi ETF
• BlackRock iShares
• Deutsche Bank db X-trackers
• HSBC ETFs
• Amundi
• SPDR ETFs Europe
• Vanguard

EU domiciled ETF exchanges

The following European stock exchanges are the primary ones for trading EU domiciled ETFs. This list is not exhaustive.

• London (LSE, London Stock Exchange)
• Xetra (Deutsche Börse, Frankfurt)
• Euronext (Amsterdam, Brussels, Lisbon, Paris)
• Milan Stock Exchange (Borsa Italiana)
• SIX Swiss
• Chi-X
• Börse Stuttgart

EU legislation : UCITS, MiFID II and PRIIPs

While every EU country has its own legislation there are a number of EU guidelines that most EU countries implement:

• UCITS
• MiFID II
• PRIIPs

UCITS (Undertakings for Collective Investment in Transferable Securities Directive) is an EU directive that allows mutual funds and ETFs to operate freely throughout the EU on authorisation from a single member state.

In 2018 the European MiFID II (Markets in Financial Instruments Directive) and PRIIPs (Packaged Retail and Insurance-based Investment Products) took effect. The goal of this legislation is to protect the individual investor. The UK left the EU in January 2020, but created its own 'UK PRIIPs' regime that is fully aligned with the EU PRIIPs, so PRIIPs restrictions continue to apply in the UK.

PRIIPs requires a retail investment product such as an ETF to provide a Key Information Document in a clear and relatively tightly specified format. US domiciled funds and ETFs do not currently produce such documents, and because the EU is not a primary market for them, few if any have indicated that they will do so. Products lacking these documents cannot be offered to EU investors.

As a result, it is now difficult or even impossible for EU and UK residents to purchase US domiciled funds. Shares purchased before the regulation came into effect can be kept and sold, but EU residents can generally no longer buy new shares of these funds or ETFs.

Index funds and ETFs outside of the US

Main article: Index funds and ETFs outside of the US

Index funds and ETFs were first created in the US and are now widely available outside of the US.

A fund's domicile can affect its returns. Some notable topics covered in Index funds and ETFs outside of the US are:

• Differences between accumulating (or capitalizing) and distributing ETF share classes
• Differences between base currency of the fund, trading currency of the fund, and currency of the underlying assets. The same ETF can have different share classes, and can be listed on several different stock exchanges in different currencies. Look for the ISIN code as unique identifier together with the name.
• Securities lending
• Index tracking strategies: replication or synthetic
• Net total return and gross total return index
• Cost and expenses related to UCITS index funds and ETFs
• Investors that hold funds that hold securities are taxed at multiple levels: level of the asset, level of the fund, level of the investor. Depending on your situation you can perhaps optimize the taxation.

Sample portfolios

There are many Boglehead inspired portfolios that you can use. Below are some EU investor fund examples that are suitable for both accumulating and for distributing portfolios. Where available, the tables show funds from both iShares and Vanguard. And there are multiple choices for bond funds, both in the accumulating and the distributing lists.

Simple portfolios

Main article: Simple non-US portfolios

The simplest portfolios use index funds (that is, mutual funds where these are easily available, otherwise the corresponding ETFs) to build a low-cost portfolio with a small number of funds that are easy to re-balance and follow the spirit and principles of the Bogleheads approach.

Complex portfolios

Main article: Complex non-US portfolios

If you want to move beyond simple three, four or five-component portfolios you can include additional components, slice and dice existing components, or use individual stocks and bonds.

Lists of ETF funds

You need to assess your risk appetite, among other criteria, to decide which particular global bond fund ETF suits their purposes. If you are a cautious investor you might choose to invest in one of the government ETFs, or alternatively invest in an aggregate version.

The Xtrackers global bond ETF (DBZB) is domiciled in Luxembourg, so you need to check your tax situation for this ETF.

Please also review the country specific pages.

Finally, please check before you invest that the information shown for these suggested ETFs is not out of date.

Selection of suggested funds for accumulating portfolios

Name ISIN, base currency and tracking indices	Description and comments	TER	Exchanges	Trading currency	Ticker
Global government bonds
Xtrackers Global Government Bond UCITS ETF 5C Acc ISIN LU0908508731 EUR Tracking FTSE World Government Bond Developed Market Index	World developed government bond unhedged	0.20%	Xetra	EUR	XG7S
			London	GBP	XG7S
				USD	XGGB
			Swiss	EUR	XG7S
			Italian	EUR	XG7S
iShares Global Government Bond UCITS USD ETF Acc ISIN IE00BYZ28V50 USD Tracking an index composed of local currency bonds issued by governments of developed countries	World developed government bond unhedged	0.20%	London	USD	IGLA
			Swiss	USD	IGLA
Xtrackers II Global Government Bond ETF EUR Hedged Acc ISIN LU0378818131 EUR Tracking FTSE World Government Bond Index – Developed Markets	World developed government bond hedged (€)	0.25%	Xetra	EUR	DBZB
iShares Global Government Bond UCITS ETF $ Hedged Acc ISIN IE00BK7Y2P34 USD Tracking FTSE G7 Government Bond Index	World developed government bond hedged ($)	0.25%	Euronext	USD	SGLU
Global aggregate bonds
iShares Global Aggregate Bond ETF USD Hedged Acc ISIN IE00BZ043R46 USD Tracking the Bloomberg Barclays Global Aggregate Bond Index	Global aggregate hedged (US$)	0.10%	London	USD	AGGU
iShares Global Aggregate Bond ETF EUR Hedged Acc ISIN IE00BDBRDM35 EUR Tracking the Bloomberg Barclays Global Aggregate Bond Index	Global aggregate hedged (€)	0.10%	Euronext	EUR	AGGH
			Swiss	EUR	AGGH
			Xetra	EUR	EUNA
Vanguard Global Aggregate Bond ETF USD Hedged Acc ISIN IE00BG47KJ78 USD Tracking the Bloomberg Barclays Global Aggregate Float Adjusted and Scaled Index Hedged in USD	Global aggregate hedged (US$)	0.10%	London	USD	VAGU
Vanguard Global Aggregate Bond ETF EUR Hedged Acc ISIN IE00BG47KH54 EUR Tracking the Bloomberg Barclays Global Aggregate Float Adjusted and Scaled Index Hedged in Euro	Global aggregate hedged (€)	0.10%	Xetra	EUR	VAGF
Stocks
iShares Core MSCI World ETF USD Acc ISIN IE00B4L5Y983 USD Tracking the MSCI World Index	Global, developed markets Large cap and mid cap	0.20%	London	GBP	SWDA
				USD	IWDA
			Xetra	EUR	EUNL
			Milan	EUR	SWDA
			Euronext	EUR	IWDA
			Swiss	USD	SWDA
SPDR MSCI World UCITS ETF USD Acc ISIN IE00BFY0GT14 USD Tracking the MSCI World index	Global, developed markets Large cap and mid cap	0.12%	Deutsche Börse	EUR	SPPW
			Borsa Italiana	EUR	SWRD
			Euronext	EUR	SWRD
			London	GBP	SWLD
				USD	SWRD
Vanguard FTSE All-World UCITS ETF USD Acc ISIN IE00BK5BQT80 USD Tracking the FTSE All-World Index	Global, developed and emerging markets Large cap and mid cap	0.22%	Deutsche Börse	EUR	VWCE
			London	GBP	VWRP
				USD	VWRA
iShares MSCI ACWI UCITS ETF USD Acc ISIN IE00B6R52259 USD Tracking the MSCI ACWI Index	Global, developed and emerging markets Large cap	0.20%	Mexico	MXN	ISAC
			Deutsche Börse	EUR	IUSQ
			London	GBP	SSAC
				USD	ISAC
			Swiss	USD	SSAC
			Tel Aviv	ILS	iSFF505
Emerging markets
iShares Core MSCI EM IMI ETF USD Acc ISIN IE00BKM4GZ66 USD Tracking the MSCI Emerging Markets Investable Market Index	Emerging markets Large cap, mid cap, and small cap	0.18%	London	GBP	EMIM
				USD	EIMI
			Swiss	USD	EIMI
			Xetra	EUR	IS3N
			Milan	EUR	EIMI
			Euronext	EUR	EMIM
Optional (world small cap)
iShares MSCI World Small Cap ETF USD Acc ISIN IE00BF4RFH31 USD Tracking the MSCI World Small Cap Index	MSCI World developed markets Small cap	0.35%	London	GBP	WLDS
				USD	WSML
			Xetra	EUR	IUSN
Multi-asset (single fund portfolio options)
Vanguard LifeStrategy 20% Equity ETF Acc ISIN IE00BMVB5K07 EUR	20% by value of equity securities and 80% by value of fixed income securities hedged (€) (bonds only)	0.25%	Euronext	EUR	V20A
			Deutsche Börse	EUR	V20A
			Milan	EUR	VNGA20
Vanguard LifeStrategy 40% Equity ETF Acc ISIN IE00BMVB5M21 EUR	40% by value of equity securities and 60% by value of fixed income securities hedged (€) (bonds only)	0.25%	Euronext	EUR	V40A
			Deutsche Börse	EUR	V40A
			Milan	EUR	VNGA40
Vanguard LifeStrategy 60% Equity ETF Acc ISIN IE00BMVB5P51 EUR	60% by value of equity securities and 40% by value of fixed income securities hedged (€) (bonds only)	0.25%	Euronext	EUR	V60A
			Deutsche Börse	EUR	V60A
			Milan	EUR	VNGA60
Vanguard LifeStrategy 80% Equity ETF Acc ISIN IE00BMVB5R75 EUR	80% by value of equity securities and 20% by value of fixed income securities hedged (€) (bonds only)	0.25%	Euronext	EUR	V80A
			Deutsche Börse	EUR	V80A
			Milan	EUR	VNGA80

Selection of suggested funds for distributing portfolios

Name ISIN, base currency and tracking indices	Description and comments	TER	Exchanges	Trading currency	Ticker
Global aggregate bonds
iShares Core Global Aggregate Bond UCITS ETF Dist ISIN IE00B3F81409 USD Tracking an index composed of global investment grade bonds	Global aggregate unhedged	0.10%	London	GBP	SAGG
				USD	AGGG
			Swiss	USD	AGGG
			Xetra	EUR	EUNU
Vanguard Global Aggregate Bond ETF EUR Hedged Dist ISIN IE00BG47KB92 USD Tracking the Bloomberg Barclays Global Aggregate Float Adjusted and Scaled Index Hedged	Global aggregate hedged (€)	0.10%	Xetra	EUR	VAGE
Global government bonds
iShares Global Government Bond UCITS USD ETF Dist ISIN IE00B3F81K65 USD Tracking an index composed of local currency bonds issued by governments of developed countries	World developed government bond unhedged	0.20%	Deutsche Börse	EUR	EUN3
			London	GBP	SGLO
				USD	IGLO
			Swiss	CHF	IGLO
iShares Global Government Bond UCITS ETF GBP Hedged ISIN IE00BDFK3H31 USD Tracking the FTSE G7 Government Bond Index	World developed government bond hedged (£)	0.20%	London	GBP	IGLH
Stocks
Vanguard FTSE All-World UCITS ETF ISIN IE00B3RBWM25 USD Tracking the FTSE All-World Index	World developed and emerging markets Large cap and mid cap	0.22%	London	GBP	VWRL
				USD	VWRD
			Euronext	EUR	VWRL
			Xetra	EUR	VWRL
			Swiss	CHF	VWRL
			Chi-X	CHF	VWRLz
Multi-asset (single fund portfolio options)
Vanguard LifeStrategy 20% Equity ETF Dist ISIN IE00BMVB5L14 EUR	20% by value of equity securities and 80% by value of fixed income securities hedged (€) (bonds only)	0.25%	Euronext	EUR	V20D
			Deutsche Börse	EUR	V20D
			Milan	EUR	VNGD20
Vanguard LifeStrategy 40% Equity ETF Dist ISIN IE00BMVB5N38 EUR	40% by value of equity securities and 60% by value of fixed income securities hedged (€) (bonds only)	0.25%	Euronext	EUR	V40D
			Deutsche Börse	EUR	V40D
			Milan	EUR	VNGD40
Vanguard LifeStrategy 60% Equity ETF Dist ISIN IE00BMVB5Q68 EUR	60% by value of equity securities and 40% by value of fixed income securities hedged (€) (bonds only)	0.25%	Euronext	EUR	V60D
			Deutsche Börse	EUR	V60D
			Milan	EUR	VNGD60
Vanguard LifeStrategy 80% Equity ETF Dist ISIN IE00BMVB5S82 EUR	80% by value of equity securities and 20% by value of fixed income securities hedged (€) (bonds only)	0.25%	Euronext	EUR	V80D
			Deutsche Börse	EUR	V80D
			Milan	EUR	VNGD80

See also

• EU non-habitual residence
• Investing from outside of the US
• Nonresident alien taxation
• Nonresident alien investors and Ireland domiciled ETFs

Further reading

• From the European Securities and Markets Authority
  • Get ready to invest
  • Is the firm regulated?
• UCITS IV: Key Investor Information Document-KIID, from PwC Luxembourg

External links

• UCITS (Undertakings for Collective Investment in Transferable Securities Directives), from Wikipedia.
• Key information documents for packaged retail and insurance-based investment products (PRIIPs), European Commission.
• MiFID II, European Securities and Markets Association.
• etfinfo.com
• SPDR® ETFs Tax Reference Guide, 2013, by SPDR ETFs Europe. Archived by DocPlayer.net from the original. This guide explains how distributing and accumulating (offshore) funds are taxed in Austria, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Switzerland, and in the UK in 2013. Reference: Bogleheads forum post: "Re: NON-US (Ireland) ETFs - Simplified Ultimate Buy and Hold Portfolio", by forum member hafius500.

Non-US domiciles
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European Union countries Belgium Investing from Belgium European Union Cash equivalents for EU investors EU investing EU non-habitual residence Germany Investing from Germany Ireland Investing from Ireland Pensions in Ireland Italy Investing from Italy Netherlands Investing from the Netherlands Spain Investing from Spain European Union countries Belgium Investing from Belgium European Union Cash equivalents for EU investors EU investing EU non-habitual residence Germany Investing from Germany Ireland Investing from Ireland Pensions in Ireland Italy Investing from Italy Netherlands Investing from the Netherlands Spain Investing from Spain
Non-European Union countries Australia Investing from Australia Brazil Investing from Brazil Canada Canada (finiki) India Investing from India Japan Investing from Japan Investing from Japan for US citizens and US permanent residents TOPIX indices Singapore Investing from Singapore Taiwan List of Taiwan exchange traded funds Taiwan Bogleheads 2013 conference Taiwan Bogleheads 2015 conference Taiwan bond indexes Taiwan stock indexes Taiwan treasury bill rates United Kingdom FTSE UK indexes Investing from the UK Investing from the UK for US citizens and US permanent residents UK abbreviations and acronyms UK Individual Savings Accounts UK personal pensions US domiciled ETFs that are UK HMRC reporting funds United States US person abroad Investing from Japan for US citizens and US permanent residents Investing from the UK for US citizens and US permanent residents Passive foreign investment company Taxation as a US person living abroad US tax pitfalls for a US person living abroad US domiciled ETFs that are UK HMRC reporting funds United States New US resident US tax pitfalls for a non-US person moving to the US Non-European Union countries Australia Investing from Australia Brazil Investing from Brazil Canada Canada (finiki) India Investing from India Japan Investing from Japan Investing from Japan for US citizens and US permanent residents TOPIX indices Singapore Investing from Singapore Taiwan List of Taiwan exchange traded funds Taiwan Bogleheads 2013 conference Taiwan Bogleheads 2015 conference Taiwan bond indexes Taiwan stock indexes Taiwan treasury bill rates United Kingdom FTSE UK indexes Investing from the UK Investing from the UK for US citizens and US permanent residents UK abbreviations and acronyms UK Individual Savings Accounts UK personal pensions US domiciled ETFs that are UK HMRC reporting funds United States US person abroad Investing from Japan for US citizens and US permanent residents Investing from the UK for US citizens and US permanent residents Passive foreign investment company Taxation as a US person living abroad US tax pitfalls for a US person living abroad US domiciled ETFs that are UK HMRC reporting funds United States New US resident US tax pitfalls for a non-US person moving to the US