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