Index Investing For Europeans

On this page I will publish the findings of my research towards index investing (with Vanguard) for Europeans and The Dutch in particular.

Disclaimer: I am not a professional investor nor do I claim to be one. You are solely responsible for your own financial and investment choices. I am not responsible for inaccurate information in any of my blog posts. I am merely sharing ideas and findings of my very amateurish investigation on index investing.

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20 thoughts on “Index Investing For Europeans

  1. Tim

    I am very interested to read your findings. Been reading up on a lot of ERE, MMM, Jcol and the likes lately and am very curious as to how I can implement investing in Vanguard in the Netherlands. Will keep a close eye on your blog.

    Reply
  2. Ruben de Miguel

    Hi Mrs Econowiser!

    This is Ruben from Spain. I´m also very interested in index investing from Europe, particulary from Spain. So far i have some Vaguard VI shares, but the cost of keeping the account plus tax leaking is prohibitive!!!
    Regards and congs for your blog!

    Reply
    1. econowiser Post author

      Hi Ruben, welcome!
      Yeah, the tax leakage is a pain in the butt! The EU has been trying to do something about this since 2004…but they haven’t managed to convice member states just yet…
      Index investing is becoming more and more popular in Europe, so there have got to be brokers who will pick up on this and start offering index investing opportunities at lower costs.

      Reply
  3. Anonymous

    It’s too much of a hassle. And we also pay more (0,50%) if we buy in Euronext market.
    Plus, if we go for Vanguard, on the American market, there is a serious EUR/USD exchange risk. And lots of dividend leaks.

    So, I opt for Think ETFs. Think Global Eq. (0,18%) is were 2/3 of my investments go. The other 1/6 is in Think Total Market UCITS, (0,40%) mainly looks at western European countries. The other 1/6th is in Think AMX UCITS ETF. (0,35%) Invests in Dutch AMX market, with quite high dividents. Yes, I go quite offensive.

    Greets from the Netherlads.

    Reply
  4. ian

    Why do you only invest in Vanguard ETFs? I recently moved to the Netherlands and the first thing I needed to do was figure out the best way to invest efficiently. I currently invest using Interactive brokers (2-3 euro per trade, total cost) ,and invest monthly, but i preferred the European based ishares products over the vanguard.

    my monthly portfolio investments are as follows:

    25% World Exposure iShares MSCI World Core UCITS ETFs IWDA.AS
    25% World Dividend iShares STOXX Global Select Dividend 100 UCITS ETF (DE) ISPA
    20% Emerging Markets Core iShares MSCI Emerging Markets IMI UCITS ETFs EMIM.AS
    10% Real Estate iShares Developed Markets Property Yield UCITS ETFs IWDP.AS
    20% Fixed Income Core iShares Euro Corporate Bond UCITS ETF IEAC.AS

    The MERs are low, (often slightly lower than vanguard, but we’re splitting hairs on that one), but vanguard does not provide options for real estate for fixed income. also, the world exposure and emerging markets reinvest dividends automatically, so saves me the hassle and cost of doing that.

    would love your thoughts on why the vanguard etfs are better (VWRL, VHYL, VFEM).

    Reply
    1. Anonymous

      Hi Ian,
      I know this post is from last year, but I’m new here and would love to know the answer to this myself. I’m just getting started in the investment world and trying to figure out the best way to invest for myself. I’ve read lots of info about Vanguard and Meesman here, but am curious to hear Econowiser’s opinion on iShares ETF’s.
      Thanks for all the info everyone. I’m learning a lot.

      Reply
  5. Anonymous

    Coming back to the idea of index investing for Europeans, I have an experience that may be relevant here. As an European expat, living in a few countries, I had to deal with taxes a few times. And it is amazing how each country work hard to make things difficult.
    – In Spain you pay per dividends, and capital gains when you sell the ETF.
    – In Germany the government dislikes accumulation ETFs and they are almost banned. You must own only ETFs that distribute dividends, otherwise taxes are a bureaucratic hell. You must document the dividends already reinvested, and pay taxes for them (although they are **potential gains**, you did not sell anything yet!).
    – In The Netherlands the government assumes a 4% benefit and you have to pay 1/4 of it each year. In other words, you pay 1% of your investment due to taxes, even if the value of your fund decreased.
    Imaging moving from country to country, explaining to tax officers that the accumulation fund already paid a fraction of the capital gains in Germany…
    Econowiser, bedankt voor deze blog.

    Reply
  6. Pingback: Off we go! | from East to West

  7. Financial Freedom Explorer

    I’m interested in this topic as well, and hope more updates are coming soon. I’d be very happy to connect with you and others from the Netherlands interested in this topic.

    Greetings,
    Financial Freedom Explorer

    Reply
  8. Pascal

    Hello, my name is Pascal and I found this blog through JCollins or MMM, I’m not sure anymore. There have not been many posts here lately, hopefully this blog is still alive because it is very interesting.

    It seems to me that at the moment (especially after the upcoming Binck Funcoach fee change) it is the cheapest option in the Netherlands to buy a Vanguard global index fund is through ING. They offer IE00BFPM911 with TER of 0,15%. ING charges 0,24% until 75k and after that 0,12%. No transaction fees in and out. They do charge 16 euro a year for the account (which may not make it the cheapest for the first 11k), plus you need to have an account which is not free.

    Am I correct? Does anybody have any experience with ING on this kind of investing (buy and hold long term).

    Kind regards,
    Pascal
    PS I hate that it is so difficult to find good and transparant information about all this in the Netherlands. I called ING with a few general questions about investing through the app (don’t like that, seems unsafe) and they needed to know my postal code, address and date of birth before answering.

    Reply
  9. Anonymous

    Hi Pascal,

    I also bank with ING and have opened an investment account with them “zelf op de beurs”. Mostly all information with ING is in Dutch especially when it comes to investment products, so that is a bit annoying.

    They offer a service for index funds known as “Bankgiro” or BG. If you buy a BG fund, you can set up an automated monthly deduction from your bank account and directly into the fund. With this fund there are no transaction costs. Keep in mind though that these funds are not as liquid as ETF’s and if you want to sell them it takes looong. Like 3-5 days!!! Ofocurse that is also the point.

    Good luck.

    Reply
    1. Pascal

      Thanks for your reply. I already opened my own account with ING and starting buying IE00BFPM9N11, much to my satisfaction.

      Reply
      1. Guido

        Please be aware of the ‘servicefees’ that ING charges for doing _absolutly nothing_:

        Variabele servicefee per Beleggingsrekening
        Belegd bedrag Percentage over het belegde bedrag
        Tot en met € 75.000 0,24%
        Over het meerdere t/m € 500.000 0,12%
        Over het meerdere t/m € 2.500.000 0,06%

        I invest via DeGiro as they charge nothing for investing in Index funds (trackers)

  10. 5 'o clock shade

    I’m with Guido on this one: De Giro does not charge any money for investing, with two exceptions: Dividend payments handling and trading more than once per month in a core selection (kernselectie) ETF.

    Reply
  11. pierrickpons

    Hi,
    Thanks for your blog.
    I can see many people I follow advising only to get the Vanguard Total US Stocks , for the stock part of your portfolio.
    It would be the ETF VTI if I am correct .

    I’ve started my investments with VWRL (in Euros) which the Vanguard Total World ETF .
    What is your point of view on this please ?
    – Should I add some VTI ? Maybe to be a little bit more aggressive as VTI is having better results during the last years .
    – Should I continue with VWRL ?

    Thanks a lot

    Reply

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