[Germany] Advice for my first Portfolio

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Topic Author
CaMKII
Posts: 5
Joined: Wed Jun 16, 2021 12:28 pm

[Germany] Advice for my first Portfolio

Post by CaMKII »

Hello, I'm in Germany as an expat, single. I am an absolute beginner in investing and Bogleheads, and thus I am a bit nervous.
I have created an account in a broker called Scalable Capital, and plan to monthly invest soon. My income is in EUR and I will not immediately need the money I invest.
I have read articles including those on justETF and Investopedia, and created a preliminary portfolio using justETF.
  • EUNL: iShares Core MSCI World UCITS ETF USD (Acc), USD, 20%
  • SXR8: iShares Core S&P 500 UCITS ETF (Acc), USD, 10%
  • SXR7: iShares Core MSCI EMU UCITS ETF EUR (Acc), EUR, 10%
  • XDJP: Xtrackers Nikkei 225 UCITS ETF 1D, JPY, 10%
  • IS3N: iShares Core MSCI Emerging Markets IMI UCITS ETF (Acc), USD, 10%
  • EUNA: iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc), EUR, 25%
  • PPFB: iShares Physical Gold ETC, USD, 15%
Since Scalable Capital offers fee-free purchase for ETFs by Xtrackers, iShares Core, and Invesco, I chose ETFs exclusively from the three companies.
I attempted to diversify the portfolio in terms of geolocation, currency and correlation coefficient. I also focused on lower TER, and larger fund size. I included XDJP, because there is a possibility for me to live in Japan, and I thought investing in JPY may be a good idea.
I am concerned with EUNL and SXR8 overlap and correlation, but I could not really find a "world ex-US" ETF listed in Stuttgart in justETF.

I would appreciate any advice or opinions.
glorat
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Joined: Thu Apr 18, 2019 2:17 am

Re: [Germany] Advice for my first Portfolio

Post by glorat »

EUNL+ IS3N already includes SXR8, SXR7, XDJP, as well as other locations/currencies that will have greater diversification than having all 5 ETFs

So you could consolidate to

EUNL: iShares Core MSCI World UCITS ETF USD (Acc), USD, 50%
IS3N: iShares Core MSCI Emerging Markets IMI UCITS ETF (Acc), USD, 10%
EUNA: iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc), EUR, 25%
PPFB: iShares Physical Gold ETC, USD, 15%

or even just
ACWI: iShares MSCI ACWI UCITS ETF (Acc), USD, 60%
EUNA: iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc), EUR, 25%
PPFB: iShares Physical Gold ETC, USD, 15%
which is even simpler and low cost
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tre3sori
Posts: 267
Joined: Wed Jul 24, 2019 3:13 am

Re: [Germany] Advice for my first Portfolio

Post by tre3sori »

My opinion: don't mess with country/region ETFs.

Since you seem to like iShares, go with
iShares MSCI ACWI UCITS ETF USD Acc
iShares Global Aggregate Bd ETF EUR Hedged Acc

If you are taxable in Germany and you want to invest in gold you should use a Gold ETC with the option to have that gold delivered to you. Because than it is tax free after a holding period of 1 year. The usual suspects are EUWAX Gold or XETRA Gold. Well, at least it used to be that way. I don't know if recent court judgements have done away with the option to have that gold delivered to you. JustETF says, that the ETF has to only hold gold physically to be exempt of taxes after holding period of 1 year. I don't know about that. Better check yourself before investing!

15% Gold seems to be a lot.

Given your ideas I would go with:
65% iShares MSCI ACWI UCITS ETF USD Acc
25% iShares Global Aggregate Bd ETF EUR Hedged Acc
10% Xetra-Gold

...that all under the premise that you are still be able to invest in/sell the above funds after returning to your home country!
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
CaMKII
Posts: 5
Joined: Wed Jun 16, 2021 12:28 pm

Re: [Germany] Advice for my first Portfolio

Post by CaMKII »

Thank you very much for fruitful opinions. I agree that ACWI or World cover regional ETFs and they are much easier/safer to manage especially for beginners like me.

I was not aware of the gold tax, which I should look up.

Scalable Capital allows customers to keep accounts as long as I have a bank account in Germany. I can keep my German bank account even if I leave Germany.
XtremePWN
Posts: 34
Joined: Fri Aug 23, 2019 3:01 am

Re: [Germany] Advice for my first Portfolio

Post by XtremePWN »

Or even better, 100% VWCE
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tre3sori
Posts: 267
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Re: [Germany] Advice for my first Portfolio

Post by tre3sori »

XtremePWN wrote: Thu Jun 17, 2021 3:31 pm Or even better, 100% VWCE
You are really an XtremePWN! :wink:
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
CaMKII
Posts: 5
Joined: Wed Jun 16, 2021 12:28 pm

Re: [Germany] Advice for my first Portfolio

Post by CaMKII »

Thank you people for various opinions. I digested your opinions, and adjusted as the following:
  • IUSQ: iShares MSCI ACWI UCITS ETF (Acc), 65%
  • EUNA: iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc), 25%
  • GZUR: WisdomTree Physical Swiss Gold, 10%
Xetra-Gold and EUWAX-Gold are not available in Scalable Capital, but GZUR is available and it's tax-free.
I'll see.
Soulforged
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Joined: Sun Jun 06, 2021 6:41 am

Re: [Germany] Advice for my first Portfolio

Post by Soulforged »

I also have Scalable Capital but I would consider Vanguard due to the much lower TER, even if you need to pay 1€ per transaction. Remember that you have one free saving plan you could use with Vanguard without paying anything.
Topic Author
CaMKII
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Joined: Wed Jun 16, 2021 12:28 pm

Re: [Germany] Advice for my first Portfolio

Post by CaMKII »

Oh really? justETF says TER of VWCE is 0.22%, while TER of IUSQ is 0.20%. Do I misunderstand anything?
Topic Author
CaMKII
Posts: 5
Joined: Wed Jun 16, 2021 12:28 pm

Re: [Germany] Advice for my first Portfolio

Post by CaMKII »

Maybe you meant Vanguard S&P 500, which has 0.07% TER. Of course it's attractive, but I'd rather diversify the region, not only the US.
XtremePWN
Posts: 34
Joined: Fri Aug 23, 2019 3:01 am

Re: [Germany] Advice for my first Portfolio

Post by XtremePWN »

tre3sori wrote: Fri Jun 18, 2021 9:21 am
XtremePWN wrote: Thu Jun 17, 2021 3:31 pm Or even better, 100% VWCE
You are really an XtremePWN! :wink:
For the stocks portion I mean, not the entire portfolio!
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