I need some second opinions about my portfolio.
I decided on a simple portfolio with one broad ETF per asset class, but I cannot set up automatic investment with my bank for the ETFs I want. Therefore I got creative and found a way to have the portfolio I want and still have automatic investing at a low cost.
However my simple portfolio is now getting rather complex with temporary mutual funds and ETFs.
Am I making things unnecessarily complicated?
My (not so) simple ETF portfolioMy asset allocation is 80% stocks + 20% bonds.
StocksVWRL Vanguard FTSE All-World
(TER: 0.25%; Commission fee: 0.30%)
- Global stock index fund
- Dividends are distributed
- Traded on Euronext Amsterdam in EUR (no stamp duty)
- Requires effort to buy/sell (order over phone)
- Minimum commission fee is 99 SEK (equals buying for 33k SEK)
- Not possible to automate monthly buys
- Amount invested varies from month to month
Current strategy is to manually make a deposit every month to my brokerage account. On the 15th every month any uninvested cash is swept into a stock fund. When it is time to rebalance the portfolio, the shares in the fund is liquidated and used to buy VWRL (and/or bonds).
BondsIEAG iShares Euro Aggregate Bond
(TER: 0.25%; Commission fee: 0.079-0.25%)
- Euro zone bond index fund
- Dividends are distributed
- Traded on Xetra in EUR (no stamp duty)
- Easy to buy/sell over internet
- Not possible to automate monthly buys
- Amount is fixed to a tenth of my normal gross salary
Still have not decided on a strategy. I can set up automatic investing into an expensive bond fund, but my bank offers a commission-free automatic investing plan for certain ETFs traded on Xetra. IEAG is not one of those, but I can get close by using:
60% IEGA iShares Core Euro Government Bond
40% IEAC iShares Core Euro Corporate Bond
I made a spreadsheet comparing the costs of the mutual fund and the ETFs. Note that assume I completely sell all shares of IEGA and IEAC to buy IEAG (and/or stock). Another approach is to only sell enough shares to get back to the above allocation.