[BE] What do you think of this LT ETFs-only portfolio

[compassionateone]

Goodafternoon everyone !

I'm reading around for a while now about ETFs, FIRE, long-terms investing, etc. Therefore, I created my first portfolio based on the advices I've read around and I'd like you to challenge it and get your feedback on it. Few informations about my choices:

• I'm a 25 y.o. belgian guy. Stable job and profile that can easily find new opportunities (CS engineer working around data/analytics). I composed this portfolio with a long-term view (basically the basis of pension savings). Time-window of 10-20-30 years.
• As of now, I plan to invest ~500+€ every month and thus adopt a dollar cost average approach. The amount I will invest every month will evolve accordingly to my salary.
• I splitted the portfolio between three categories :
  • World : World UCITS and EM UCITS ETFs
  • Bonds and commodities : Global aggregate bonds and Gold to smooth a bit volatility
  • Thematics i like : Techno, robotics and automation, small cap and video games/esport
• Those thematics has been chosen mainly because I can track the sector easily since I'm part of it. Video games because giving a good exposure to actors like NVIDIA or Tencent and others. Small Cap because I wanted to balance with my other ETFs large-cap oriented.
• Using tech-oriented ETFs is for strengthen tech-positions from the World index
• I privileged the accumulating ETFs based in Ireland for Belgium tax reasons (30% tax on divi)

Below you'll find the exact allocation and portfolio composition :

ETF
ISIN
Alloc

iShares Core MSCI World UCITS ETF USD (Acc) (EUR)
IE00B4L5Y983
36%

iShares MSCI EM UCITS ETF (Acc)
IE00B4L5YC18
16%

Shares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc)
IE00BDBRDM35
10%

Invesco Physical Gold ETC (EUR)
IE00B579F325
10%

L&G ROBO Global Robotics and Automation UCITS ETF (EUR)
IE00BMW3QX54
7%

SPDR® MSCI World Small Cap UCITS ETF (EUR)
IE00BCBJG560
7%

SPDR® MSCI World Technology UCITS ETF USD Acc (EUR)
IE00BYTRRD19
7%

VanEck Vectors Video Gaming and eSports UCITS ETF A USD (EUR)
IE00BYWQWR46
7%

Multiple questions on my side about this allocation :

• What do you think about it ?
• Are the commodities/bonds still required for a LT portfolio seeking for growth ?
• Are the small caps really "a think" to have ? What does it imply ?
• Any way to simplify it ? ETFs to recommend ?

Thanks a lot for your view and also all the topics that already upskilled me

 

[jude77778]

@compassionateone Highly complex to be honest and not really that good.

This quote:

Those thematics has been chosen mainly because I can track the sector easily since I'm part of it.

Yeah no, iam sorry but you don't really understand it. If you want to follow an index fund and be passive about it makes no sense overinvesting in these areas. Because 1) the ishares MSCI world already invests in those companies based on their market cap and 2) you are making an active bet that these sectors will outperform the rest - they might or might not. who knows?

About gold I won't make any remark. You decide for youself.

I would only buy 3 of these ETF's (4 if u want gold):

- iShares Core MSCI World UCITS ETF USD (Acc) (EUR)

- iShares MSCI EM UCITS ETF (Acc)

- Shares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc)

If you want to make it even more easy (and still buy emerging markets - which I dont think is really necessary but still, a good choice)

- Vanguard FTSE All-World UCITS ETF (USD) Accumulating

- Shares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc)

 

[compassionateone]

@jude77778 Top feedback thanks a lot ! Will definitely simplify it and try to get rid of my industry bias

 

[lavenderfields]

@compassionateone Some tips:

• I would drop the thematic ETFs. If you really want to do some active investing, take 5% of your total and 'play with it', but go for individual companies, not ETFs.
• You seem to reason that tech is underrepresented in world indices but I think that's a wrong assumption?
• If you don't own any real estate, you might consider adding a real estate ETF, e.g. LU0489337690. Real estate is actually underrepresented in world indices (since the overwhelming majority of real estate is not listed).
• Gold: if you want it, I would put 2-3% into it. Definitely not 10%.
• For EM you can pick IE00BKM4GZ66 (the Investible Market Index version) instead of IE00B4L5YC18. It's also accumulating and has a lower TER.

 

[compassionateone]

@lavenderfields Thanks a lot ! Will check for real-estate. Most of the funds are Lux domiciled but still really interesting to include !

 

[levicoleman]

@compassionateone Small changes dont make a difference, so dont bother with anything less than 20%-30%. Stick with world and emmerging, drop the gold.
Allocate 10% to active trading individual stocks that you know best (hopefully better than the market, but most studies doubt it)
You dont need more than 3 ETFs. Its supposed to be set it and forget it kinda thing, you re gonna be doing this for a long time

 

[compassionateone]

@levicoleman Good one thanks !

 

[oranges]

@compassionateone Hey there - question for your question, unfortunately. Fellow Belgian new to investing here.

Who are you using as a broker? I've been having a lot of trouble finding one that's good for BE. This sub loves Degiro, which isn't available here.

Any help is welcome! Sorry I can't help you with your allocation, but other peoples' advice here of "maybe make it simpler" seems like a good idea.

 

[compassionateone]

@oranges DEGIRO is actually available in Belgium. You just need to declare your foreign trading account to Belgian gov. Sadly DEGIRO has now started a waiting queue and i’m personally 3696e for 3 weeks now. While waiting I’m using Boléro but it’s really really expensive so it’s a temporary solution. Lynx is often recommended as well (but you need to open your account with 10k min).I can only recommend you the BelgiumFIRE reddit which is full of nice information for personal investment in Belgium.

 

[compassionateone]

r/BEFire

 

[oranges]

@compassionateone Alright I'll take a look, thanks.

How do you register for Degiro though? Step #1 is asking you to choose your country of residence....and BE isn't an option.

 

[markymatt]

@oranges This also threw me off at first, you have to select the Netherlands option and then you'll get a follow up question asking you if you are a resident of the Netherlands or Belgium.

Currently there is a waiting list, but they have announced that they are going to be working on the list starting from next monday.

As a temporary/permanent alternative i'm using Trading212, and have had a great experience so far. But beware, you'll have to take care of your own taxes (TOB, etc.).

 

[oranges]

@markymatt

This also threw me off at first, you have to select the Netherlands option and then you'll get a follow up question asking you if you are a resident of the Netherlands or Belgium.

A-ha - ya, I didn't bother to go past that first step. What an odd interface design choice.

As a temporary/permanent alternative i'm using Trading212, and have had a great experience so far. But beware, you'll have to take care of your own taxes (TOB, etc.).

Are they able to transfer portfolios if/when you get approved by another broker?

 

[levicoleman]

@compassionateone 10k for lynx? Jesus

 

[hugh999]

@compassionateone I would also drop the Sector ETFs. Take some fixed sum and do active trading with it to scratch your itch. Most probably you will see that you can't outperform the market.

You are also young, if you can stomach the swings I guess you don't need Bonds / Gold.

If you are doing a small cap tilt, you might also look into value tilt (MSCI World Value Factor).

 

[compassionateone]

@hugh999 Thanks a lot for the feedback ! Could you elaborate a bit around using a couple small cap / value. I do know a bit about smart beta ETFs but that’s where my understanding stops

 

[hugh999]

@compassionateone Look up Ben Felix on YouTube ( small cap and value factor etfs videos).
But basically those two factors have a proven risk premium outside of the market risk, so overweighting them more than just market cap ( they are part of the bigger index as well) adds more diversification and boosts historical results.

 

[fishergirlusmc]

@compassionateone I would go for MSCI World, EM, Global Aggregate Bond + ROBO and Gaming as a gamble.

If you want to invest in Gold then buy gold. Technology is already covered through MSCI World. Small Cap would be kind of an over-investment if you choose ROBO + Gaming. Diversity is good but sometimes less is more.

 

[revbob4him]

@compassionateone Hi! I would not invest in the Invesco Gold ETC in a long term strategy. Compared to histroical data, gold is always underperforming the stock exchange. The only moment it really grows is when there is a crisis. Thus I would not buy it for a long term strategy.