Sweden | Investment advice for simple portfolio

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Topic Author
Fisksaas
Posts: 6
Joined: Mon Apr 26, 2021 10:27 am

Sweden | Investment advice for simple portfolio

Post by Fisksaas »

Hi all,

I'm kind of a boglehead when it comes to investment strategy, but on the other side, I'm not looking after early retirement and the purpose of my investment is to simply let my money grow for any personal purpose in the future...

Little bit about myself:
My partner and I are in the mid-twenties, yet, going really slow ... we are both work part-time job (75%) in a very solid sectors that yields medium income. However, we still manage to save up to 80%, since we are humble and having very minimalistic lifestyle.
I'm having an IRA in another country that follows SP500, which accounts for about a third of my capital. Because of tax reasons and due to low ER (for now at least) I would like to keep it there. No loans, no debts, no credit nor the need of it.

I am new to this country but already noticed that it is pretty hard to find here wide ETF's...
First, it is expensive for us to use brokerage services that offers Irish domiciled ETF's as we wish...
Unless anybody here knows a cheap and simple way to do so?
Second, we do save around 80% each month but since our salaries are not so high, we think that handling a foreign currency can be little bit heavy... that its why a Swedish fund is what we are looking for.
The third "problem" I found here in Sweden is related to the diversity of the funds up here - All are just seems to me pretty narrow when comparing them to Vanguard / iShares alternative...

We never did any investment in Sweden but we would like to start soon.
We are thinking about having 85% in stocks, preferably for single ETF / Mutual fund that has a broad cover, something that equivalent or similar to VTI
and the rest 15% in bonds or just in deposit.
We found a good offer for a deposit with guaranteed 2.25% for locking down the money for 7 years - time range that fits our plans.
Otherwise, for the solid part we think of buying this bonds fund - "AMF Räntefond Lång" - https://www.nordnet.se/marknaden/fondli ... efond-lang

The questions are simple:
Which ETF / Mutual fund meets our requirement?
Is there any reason to prefer bonds fund to the solid part over a deposit?

Any suggestion is welcome
Astones
Posts: 322
Joined: Mon Apr 12, 2021 12:48 pm

Re: Sweden | Investment advice for simple portfolio

Post by Astones »

I was also looking for a US total market ETF for Europeans.

So far I haven't found anything that's precisely just that.

The closest alternatives are tracking either the S&P500 or the FTSE North America.

I'd recommend to use JustETF to search for the solution that works best for you.

Concerning the platform, people tend to be happy with Degiro, for what I've seen.

But let's wait for the opinion of someone with more experience than myself.
Topic Author
Fisksaas
Posts: 6
Joined: Mon Apr 26, 2021 10:27 am

Re: Sweden | Investment advice for simple portfolio

Post by Fisksaas »

Astones wrote: Mon Apr 26, 2021 12:58 pm Concerning the platform, people tend to be happy with Degiro, for what I've seen.
It is indeed seems to me as a very good platform... I like their transparency and the very clear pricing.
Their free ETFs deal is very attractive and under that list falls many ETF that fits our will.

But, as a Swede we must convert the money. Doing so with the autoFX that Degiro offers makes any transaction 0.1% more expensive.

I was digging the net since yesterday and notice that Avanza may offer a good alternative, as they offer ETF in local currency, and very low ER.
It seems that most if not all the Swedish funds that attempts to mimic the American market, tries to avoid environmentally/socially "bad" companies, and excluding them.
However, I compared 2 different Swedish ETFs to 2 classic one (Vanguard and iShares) and their previous performance was quite similar.
Another thing is that all the Swedish funds that i found are accumulating...

When it comes to global ETFs, the Swedish one (of Avanza) underperform against those of Vanguard and Blackrock...
The only question for me regarding Avanza is how much does it cost, since their pricing was not clear to me at all... I will contact them and see whether is better to stay local and avoiding converting money or, Degiro, with their attractive deals and very simple pricing will be the cheaper after all...

Does anybody here can explain a bit what is an ISK (investeringssparkonto)?
To make long thing short - for a investor who wants to hold equity for many years - is it better to open such account or shall avoid?
wineandplaya
Posts: 306
Joined: Fri Sep 14, 2018 9:42 am

Re: Sweden | Investment advice for simple portfolio

Post by wineandplaya »

Fisksaas wrote: Tue Apr 27, 2021 10:58 am Does anybody here can explain a bit what is an ISK (investeringssparkonto)?
To make long thing short - for a investor who wants to hold equity for many years - is it better to open such account or shall avoid?
Normally, capital gains (anywhere in the world) are taxed at 30 % for Swedish residents. If your money is held in an ISK, your capital gains rate drops to 0 %. On the other hand, you have to pay an annual tax based on the total value of your holdings. This rate is coupled to the borrowing rate for Swedish national debt, which is very low. For 2021, your tax rate for ISK holdings is 0.375 %. It should be a very good deal for most Swedish residents.
Topic Author
Fisksaas
Posts: 6
Joined: Mon Apr 26, 2021 10:27 am

Re: Sweden | Investment advice for simple portfolio

Post by Fisksaas »

Thank you wineandplaya!

So it is tricky but easy to understand after all, and good that skatteverket let us know one year in advance.
Henri111
Posts: 20
Joined: Thu Apr 22, 2021 6:45 am

Re: Sweden | Investment advice for simple portfolio

Post by Henri111 »

When reading your post I had to think of Vanguard life strategy
https://www.vanguardinvestor.co.uk/inve ... s/overview
Topic Author
Fisksaas
Posts: 6
Joined: Mon Apr 26, 2021 10:27 am

Re: Sweden | Investment advice for simple portfolio

Post by Fisksaas »

Henri111 wrote: Tue Apr 27, 2021 1:46 pm When reading your post I had to think of Vanguard life strategy
https://www.vanguardinvestor.co.uk/inve ... s/overview
And why is that?

Note that 25% of this fund are invested in UK. I am looking for something way wider than that...
Also, may be not that simple/cheap for me to buy units in this fund...
Henri111
Posts: 20
Joined: Thu Apr 22, 2021 6:45 am

Re: Sweden | Investment advice for simple portfolio

Post by Henri111 »

I didn't go into detail of the fund but the fact that you were talking about this relation stocks/bonds made me suggest it to you:
no rebalancing cost
lower purchasing cost as only 1 product needs to be bought
TER 0.22%
Topic Author
Fisksaas
Posts: 6
Joined: Mon Apr 26, 2021 10:27 am

Re: Sweden | Investment advice for simple portfolio

Post by Fisksaas »

Henri111 wrote: Wed Apr 28, 2021 12:59 am no rebalancing cost
lower purchasing cost as only 1 product needs to be bought
TER 0.22%
You can get that either way using Degiro....
Henri111
Posts: 20
Joined: Thu Apr 22, 2021 6:45 am

Re: Sweden | Investment advice for simple portfolio

Post by Henri111 »

I didn't know that. I wanted to help out but got gifted by learning myself. Thank you. I'm sure you'll be fine :beer
Topic Author
Fisksaas
Posts: 6
Joined: Mon Apr 26, 2021 10:27 am

Re: Sweden | Investment advice for simple portfolio

Post by Fisksaas »

So now the only question is whether isk is good or not for long-term investment?
Does anybody tried to calculate the benefits of this taxation in a time line of 10 or more years?
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