Bond ETFs for Europeans ?

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Topic Author
Astones
Posts: 322
Joined: Mon Apr 12, 2021 12:48 pm

Bond ETFs for Europeans ?

Post by Astones »

What are your choices ?

I was looking for something like BND in US but I've been disappointed by what I have found so far.

More generally, what are are some low cost bond ETFs that left you satisfied ?
DJN
Posts: 996
Joined: Sun Nov 19, 2017 11:30 pm

Re: Bond ETFs for Europeans ?

Post by DJN »

Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
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tre3sori
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Joined: Wed Jul 24, 2019 3:13 am

Re: Bond ETFs for Europeans ?

Post by tre3sori »

Astones wrote: Fri May 07, 2021 10:09 am what are are some low cost bond ETFs that left you satisfied ?
I'm totally satisfied with my 15% allocation to VAGE, Vanguard Global Aggregate Bond UCITS ETF (EUR Hedged Distributing, TER 0.10%).
I came from a much more diverse bond portfolio with government bonds, corporate bonds, TIPS, even High Yield and EM debt (local and USD).
It was a pain in the a... to manage and it was not tax efficient here in Germany because of rather large distributions.
Moving away from risky bonds to VAGE and scaling up stock allocation (Vanguard FTSE All-World UCITS ETF) by about 5% enhanced the risk profile of my investment portfolio while saving taxes at the same time.
Works for me so far.

This would also be a place to look for more information: https://www.bogleheads.org/wiki/EU_investing
The information provided is intended to be entertaining. It is not to be construed as professional advice. Use it at your own risk.
Topic Author
Astones
Posts: 322
Joined: Mon Apr 12, 2021 12:48 pm

Re: Bond ETFs for Europeans ?

Post by Astones »

tre3sori wrote: Fri May 07, 2021 3:18 pm
I'm totally satisfied with my 15% allocation to VAGE, Vanguard Global Aggregate Bond UCITS ETF (EUR Hedged Distributing, TER 0.10%).
I came from a much more diverse bond portfolio with government bonds, corporate bonds, TIPS, even High Yield and EM debt (local and USD).
It was a pain in the a... to manage and it was not tax efficient here in Germany because of rather large distributions.
Moving away from risky bonds to VAGE and scaling up stock allocation (Vanguard FTSE All-World UCITS ETF) by about 5% enhanced the risk profile of my investment portfolio while saving taxes at the same time.
Works for me so far.

This would also be a place to look for more information: https://www.bogleheads.org/wiki/EU_investing
I'm worried by its low fund size, and the fact that it's so new, so that I can't really check the tracking error over a long period of time.
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tre3sori
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Re: Bond ETFs for Europeans ?

Post by tre3sori »

Astones wrote: Fri May 07, 2021 3:37 pm I'm worried by its low fund size, and the fact that it's so new, so that I can't really check the tracking error over a long period of time.
VAGE (VAGF for accumulation) is only a share class of a much larger fund (USD 2954M). It is also a core holding of the €-Versions of the Vanguard LifeStrategy fund family. I'm not worried about low fund size. Given the low cost of the fund and its passive nature I'm not worried about a large tracking error either.
The index has about 21K components, the fund only about 7K. So my guess is that the fund samples the index mainly using more liquid bonds and leaving out the more illiquid (and higher yielding?) bonds in the index. This may result in a tracking error. The distribution yield of the index is about 1%, that of the fund about 0.7%. So the fund may track its price index pretty well while lagging its performance index.
For me the question is less about how well the fund tracks its index but more: what other indices are there that are broadly diversified and investible with a decent low cost fund?
The information provided is intended to be entertaining. It is not to be construed as professional advice. Use it at your own risk.
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