Belgium - low vol bond funds as alternative to bank account

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Topic Author
riskless
Posts: 33
Joined: Wed Jun 20, 2018 2:03 pm

Belgium - low vol bond funds as alternative to bank account

Post by riskless »

Hi,


I am located in Belgium.
I have a roughly 50-50 equity-bonds allocation in my portfolio.

Separately from the above, I am looking at parking my "spare cash" in low volatility, short maturity, investment grade funds that earn more than a EUR-denominated bank account. By spare cash, I mean to be able to deposit and withdraw from it just as I would from a bank account.

Filtering justetf.com by asset class (bonds), currency (EUR), bond rating (investment grade), maturity (0-3years), and then excluding government bonds, I get this list:
Image

The only option with a positive return over 3 years appears to be the last one iShares Euro Corporate Bond 0-3yr ESG UCITS ETF EUR (Dist), which
(i) is subject to 30% tax on capital gains and dividends
(ii) is Irish domiciled
(iii) will attract transactions tax in Belgium of 0.12%, hence 0.24% round trip
(iv) returned 0.84% cumulative over the last 3 years.

Would Belgian bogleheads please confirm or correct the points above in bold font?

So the transaction taxes alone would more or less wipe out returns.

Is this idea therefore a non-starter?

Any other very-low-risk alternatives to a bank account?

Thanks!
Laurizas
Posts: 515
Joined: Mon Dec 31, 2018 3:44 am
Location: Lithuania

Re: Belgium - low vol bond funds as alternative to bank account

Post by Laurizas »

riskless wrote: Tue Apr 13, 2021 12:05 pm Is this idea therefore a non-starter?
I think - yes. Too much hustle for nothing.
Topic Author
riskless
Posts: 33
Joined: Wed Jun 20, 2018 2:03 pm

Re: Belgium - low vol bond funds as alternative to bank account

Post by riskless »

Thanks, Laurizas...

Was just wondering if there was an innovative Belgian solution to the problem of low interest rates. Good to know I'm not missing anything.
User avatar
zarci
Posts: 197
Joined: Sat Jun 10, 2017 11:02 am

Re: Belgium - low vol bond funds as alternative to bank account

Post by zarci »

i’m a Belgian resident too and I’m coughing up 1.32% transaction taxes on my bond funds. i was expecting a lower bracket but double checked with my bank and 1.32% is right on the money.

as a more general point; you could try to build a long-term savings account (not liquid) ladder. but that won’t fetch you any decent return.
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