Simple index investing in Holland

[kristof]

My girlfriend recently asked me about what to invest in and I figured I'd try to give her some solid advice. What would you guys recommend for someone who is:

1. Living in the Netherlands
2. Has little to no investing experience
3. Somewhat understands/favors the ideas behind index investing
4. Would prefer something relatively logistically simple

My initial thought was to suggest she go with the 'self-directed' offering of her bank, ABN Amro, as this would make things as simple as possible. But from what I can tell from the fee schedule it's a little bit expensive (0.18% per year base cost, plus at least 0.15% transaction fees on any international funds). Then again, I'm not really familiar with fees of their competitors so maybe it doesn't get much better. Anyone have better ideas, or is this the best way to go?

[bigchrisb]

I don't know the answer, but I am keen to see what others say, as I'll be moving to the Netherlands in May. I have lots of experience in the Australian market, but little in Europe.

[Dagobert]

Personally use Meesman (www.meesman.nl). A 0,5% annual fee (inc costs of underlaying funds) and 0,25% transaction fee. Minimum of 100 euro a month (above that any ammount for single transactions is possible) or 10.000 euro in one payment upfront. Little foreign dividendtaxwitholdings
Only a few indexoptions (world, Europe, emerging country's). Very simple and basic. 

Other banks still have other fees for management or costs of the funds it invest in, or lend out the stock to other parties (like The Giro does).

Edit: there is also a Dutch thread here:
https://forum.mrmoneymustache.com/meetups-and-social-events/any-dutch-mustachians-here/

[kristof]

Thanks for the pointer to the Dutch thread! It looks like Meesman is the closest thing to Vanguard in Holland.

However I'm confused because ABN Amro's fees seem to add up to less than Meesman's 0.5%. According to the fee schedule here

 https://www.abnamro.nl/en/images/Content/010_Prive/020_Producten_l_diensten/020_Beleggen/0_NIEUWE_STRUCTUUR/000_Documenten/pdf_Tarievenkaart_Zelf_Beleggen_plus.pdf

they charge an 0.18% per year management fee, and an 0.15% transaction fee for US equities. If I bought VTI which has an expense ratio of 0.04% wouldn't that end up being cheaper than investing in Meesman's index funds? Or is it not possible to buy ETF's via ABN Amro's platform? I assume I must be missing something but I'm not sure what.

[kaetana]

Hi Kristof. The cheapest I have found is De Giro: https://www.degiro.nl/. They are just a broker and seem to have the lowest fees. You can then buy whatever ETF you would like. Meesman is a good alternative. It's a bit more expensive but also more user-friendly especially since your girlfriend is new to investing.

I don't know the answer, but I am keen to see what others say, as I'll be moving to the Netherlands in May. I have lots of experience in the Australian market, but little in Europe.

Hi Chris! Australian here living in the Netherlands. Happy to have another Aussie here soon!

[UncleX]

I buy Vanguard through ING bank. I was already a customer there, so for me it was the easiest option. At the time when I started, it was also the cheapest option for me, as I already had an account there. This may have changed, but I still think it's pretty cheap. They charge 0,24% on invested capital up to 500.000 75.000 euro (less above that), plus 16 euro per year. No transaction fees for mutual funds, index funds and index trackers.

https://www.ing.nl/particulier/beleggen/beginnen-met-beleggen/tarieven/index.html

Edit: Corrected my mistake, thanks @kaetana!

[bigchrisb]

Hi Kristof. The cheapest I have found is De Giro: https://www.degiro.nl/. They are just a broker and seem to have the lowest fees. You can then buy whatever ETF you would like. Meesman is a good alternative. It's a bit more expensive but also more user-friendly especially since your girlfriend is new to investing.

I don't know the answer, but I am keen to see what others say, as I'll be moving to the Netherlands in May. I have lots of experience in the Australian market, but little in Europe.

Hi Chris! Australian here living in the Netherlands. Happy to have another Aussie here soon!

Sorry to hijack the thread!  I'll be in Den Haag from May - which part of the country are you in?  Would be great to catch up once there (and seek some tips on the country!)

[Dagobert]

Thanks for the pointer to the Dutch thread! It looks like Meesman is the closest thing to Vanguard in Holland.

However I'm confused because ABN Amro's fees seem to add up to less than Meesman's 0.5%. According to the fee schedule here

 https://www.abnamro.nl/en/images/Content/010_Prive/020_Producten_l_diensten/020_Beleggen/0_NIEUWE_STRUCTUUR/000_Documenten/pdf_Tarievenkaart_Zelf_Beleggen_plus.pdf

they charge an 0.18% per year management fee, and an 0.15% transaction fee for US equities. If I bought VTI which has an expense ratio of 0.04% wouldn't that end up being cheaper than investing in Meesman's index funds? Or is it not possible to buy ETF's via ABN Amro's platform? I assume I must be missing something but I'm not sure what.

Looks like the're some minimum fee's via ABN Amro, but monthly payment is an exeception. To be honest, for someone with little experience and a, i assume, small amount of investments, cost aren't that important. With 10.000 euro 0,5% vs 1% cost is only 50 euro's a year difference.
Getting in the habit of investing a few hunderd a month every month is worth more now. Keep it simple. Meesman is simple (few options to choose for example) and explains it well on there website. Indeed closest to a Dutch Vanguard here.
The problem with investing through my own bank (ING) was that every time a log in to my bankaccount the investmentresults where a mouseclick away. So i looked almost daily. Very hard for a buy and hold strategy.
With Meesman it's a separate login. To much work, i only check a few times a year (and see the payments monthly from my regular bankaccount ofcourse). It just grows a bit in the background.
Not seeing a ammount daily is also good for not feeling rich (and therefore convincing myself i can easly afford <insert luxury meal/item>.

[UncleX]

The problem with investing through my own bank (ING) was that every time a log in to my bankaccount the investmentresults where a mouseclick away. So i looked almost daily. Very hard for a buy and hold strategy.
With Meesman it's a separate login. To much work, i only check a few times a year (and see the payments monthly from my regular bankaccount ofcourse). It just grows a bit in the background.
Not seeing a ammount daily is also good for not feeling rich (and therefore convincing myself i can easly afford <insert luxury meal/item>.

Well, this is really a very personal issue. And off course your own choice. If this works for you, great! But we don't have any problem with knowing exactly how much we have invested and own. To be honest we like it and check everything on a daily basis. We like to have things as simple as possible, so our own bank also being the cheapest solution for investing directly into Vanguard is great for us.

[kaetana]

Sorry to hijack the thread!  I'll be in Den Haag from May - which part of the country are you in?  Would be great to catch up once there (and seek some tips on the country!)

PM sent. :)

They charge 0,24% on invested capital up to 500.000 euro (less above that), plus 16 euro per year. No transaction fees for mutual funds, index funds and index trackers.

https://www.ing.nl/particulier/beleggen/beginnen-met-beleggen/tarieven/index.html

According to that link it's actually 0,24% up to 75.000, isn't it? And 0,12% up to 500.000. In any case, assuming a 1.000 euro deposit every month:
Annual fee = 16
Invested capital fee = 28,80
TOTAL ING COST = 44,80 euro

According to https://www.degiro.nl/tarieven/kosten-calculator.html, De Giro would cost 30 euro for the same amount. After doing some more calculations on different amounts invested per month, it looks like if you invest 400 euro a month or more, De Giro is the better deal (26,40 vs 27,52). However, for amounts of 300 or less, ING is the better deal (24,64 vs 25,80).

I still think Meesman would be better for a beginner, though.

[UncleX]

They charge 0,24% on invested capital up to 500.000 euro (less above that), plus 16 euro per year. No transaction fees for mutual funds, index funds and index trackers.

https://www.ing.nl/particulier/beleggen/beginnen-met-beleggen/tarieven/index.html

According to that link it's actually 0,24% up to 75.000, isn't it? And 0,12% up to 500.000.

You are absolutely right.

But your calculation for ING is wrong(ish):
   
Base fee: 16
Invested capital fee: 180 (assuming 75.000 already invested)
Invested capital fee: 510 (assuming another 425.000 invested)
Transaction fees: 0

Total 706 euro for half a million euro invested.

[kaetana]

They charge 0,24% on invested capital up to 500.000 euro (less above that), plus 16 euro per year. No transaction fees for mutual funds, index funds and index trackers.

https://www.ing.nl/particulier/beleggen/beginnen-met-beleggen/tarieven/index.html

According to that link it's actually 0,24% up to 75.000, isn't it? And 0,12% up to 500.000.

You are absolutely right.

But your calculation for ING is wrong(ish):
   
Base fee: 16
Invested capital fee: 180 (assuming 75.000 already invested)
Invested capital fee: 510 (assuming another 425.000 invested)
Transaction fees: 0

Total 706 euro for half a million euro invested.

I should have been clearer - the calculations I was doing was based on someone starting out from nothing (like the OP's girlfriend). So she wouldn't have anything else invested other than what she intends to invest this year.

[UncleX]

They charge 0,24% on invested capital up to 500.000 euro (less above that), plus 16 euro per year. No transaction fees for mutual funds, index funds and index trackers.

https://www.ing.nl/particulier/beleggen/beginnen-met-beleggen/tarieven/index.html

According to that link it's actually 0,24% up to 75.000, isn't it? And 0,12% up to 500.000.

You are absolutely right.

But your calculation for ING is wrong(ish):
   
Base fee: 16
Invested capital fee: 180 (assuming 75.000 already invested)
Invested capital fee: 510 (assuming another 425.000 invested)
Transaction fees: 0

Total 706 euro for half a million euro invested.

I should have been clearer - the calculations I was doing was based on someone starting out from nothing (like the OP's girlfriend). So she wouldn't have anything else invested other than what she intends to invest this year.

Okay, I didn't realise that and indeed that was the question. Still, with the risk of being called a nitpicker, I would like to point out that in the first year, starting with 0 and ending with 12.000 euro, the fee would be lower. To make it easy you should calculate with an average investement in that year, say 6.000 or 6.500 euro. The investment fee would be about 15 or 16 euro.

[kaetana]

Okay, I didn't realise that and indeed that was the question. Still, with the risk of being called a nitpicker, I would like to point out that in the first year, starting with 0 and ending with 12.000 euro, the fee would be lower. To make it easy you should calculate with an average investement in that year, say 6.000 or 6.500 euro. The investment fee would be about 15 or 16 euro.

No problem, no offense taken - I am also interested in the outcome because I've only recently moved to the Netherlands and have not transferred over my Australian investments, so I'm also effectively starting from 0. As for the fee, I could not understand what you meant at first but now I think I do. I assumed that the service fee was calculated yearly at the end of the year but upon closer inspection it does seem that it is calculated monthly as per the fine print in https://www.ing.nl/particulier/beleggen/beginnen-met-beleggen/tarieven/index.html:

Servicefee

De hierboven vermelde tarieven zijn op jaarbasis. De servicefee wordt per kwartaal geïncasseerd, van het gelddeel van uw beleggingsrekening.
De bovenstaande tarieven worden per beleggingsrekening berekend, over het gemiddelde belegde vermogen. Dit gemiddelde wordt bepaald op basis van de waarde van het belegd vermogen per beleggingsrekening aan het eind van elke maand.
De bovenstaande tarieven zijn exclusief de beheervergoeding die fondsbeheerders in rekening brengen. Deze vergoeding is verrekend in de koers van het betreffende fonds.

This actually makes a big difference. By my reckoning this would make ING cheaper for amounts of 900 euro per month or less (28,96 vs 29,40) and De Giro would be cheaper for 1000 or more (30.00 vs. 30,40).

Hmmm... as I already bank with ING, it seems I should transfer my De Giro holdings to ING. Thanks for the tip!

Another question is what to invest in. I currently hold VTI and VXUS via De Giro, but as of this month they are no longer available for sale in the Netherlands. I am considering VWRL or just going the Meesman route for simplicity.

[UncleX]

Another question is what to invest in. I currently hold VTI and VXUS via De Giro, but as of this month they are no longer available for sale in the Netherlands. I am considering VWRL or just going the Meesman route for simplicity.

You could have a look at Vanguard Global Stock Index Fund Institutional Plus EUR Accumulation fund. This is available through ING and the only thing I'm buying. Just a suggestion.

http://www.morningstar.nl/nl/funds/snapshot/snapshot.aspx?id=F00000S7J6

[Hirondelle]

Another question is what to invest in. I currently hold VTI and VXUS via De Giro, but as of this month they are no longer available for sale in the Netherlands. I am considering VWRL or just going the Meesman route for simplicity.

I do hold VTI and VXUS through DeGiro as well, but as I understood it these fonds might become available again later on, once they do have the required documents in the Dutch language.

(Still I do think this new rule is very annoying. So now they want every fund to translate all their documents in the language of all those other countries to make them able to invest in it at all?! Who ever came up with that?!)

[Hirondelle]

Thanks for the pointer to the Dutch thread! It looks like Meesman is the closest thing to Vanguard in Holland.

However I'm confused because ABN Amro's fees seem to add up to less than Meesman's 0.5%. According to the fee schedule here

 https://www.abnamro.nl/en/images/Content/010_Prive/020_Producten_l_diensten/020_Beleggen/0_NIEUWE_STRUCTUUR/000_Documenten/pdf_Tarievenkaart_Zelf_Beleggen_plus.pdf

they charge an 0.18% per year management fee, and an 0.15% transaction fee for US equities. If I bought VTI which has an expense ratio of 0.04% wouldn't that end up being cheaper than investing in Meesman's index funds? Or is it not possible to buy ETF's via ABN Amro's platform? I assume I must be missing something but I'm not sure what.

Looks like the're some minimum fee's via ABN Amro, but monthly payment is an exeception. To be honest, for someone with little experience and a, i assume, small amount of investments, cost aren't that important. With 10.000 euro 0,5% vs 1% cost is only 50 euro's a year difference.
Getting in the habit of investing a few hunderd a month every month is worth more now. Keep it simple. Meesman is simple (few options to choose for example) and explains it well on there website. Indeed closest to a Dutch Vanguard here.
The problem with investing through my own bank (ING) was that every time a log in to my bankaccount the investmentresults where a mouseclick away. So i looked almost daily. Very hard for a buy and hold strategy.
With Meesman it's a separate login. To much work, i only check a few times a year (and see the payments monthly from my regular bankaccount ofcourse). It just grows a bit in the background.
Not seeing a ammount daily is also good for not feeling rich (and therefore convincing myself i can easly afford <insert luxury meal/item>.

Just leaving this here: https://www.financieelonafhankelijkblog.nl/indexfondsen/

0.1% kosten bij beleggen geeft niet 3% maar 21% minder rendement na 30 jaar

[UncleX]

Just leaving this here: https://www.financieelonafhankelijkblog.nl/indexfondsen/

0.1% kosten bij beleggen geeft niet 3% maar 21% minder rendement na 30 jaar

Although in this example the math is correct, this is a very dramatic way of putting it into words. So after 47 years you would have over 100% less return, which I would understand as no return at all. Still you would have gained 2.2 million (which would have been 2.3 million at 0.1 less cost).

[Hirondelle]

Just leaving this here: https://www.financieelonafhankelijkblog.nl/indexfondsen/

0.1% kosten bij beleggen geeft niet 3% maar 21% minder rendement na 30 jaar

Although in this example the math is correct, this is a very dramatic way of putting it into words. So after 47 years you would have over 100% less return, which I would understand as no return at all. Still you would have gained 2.2 million (which would have been 2.3 milion at 0.1 less cost).

True. I wouldn't necessarily call it 21% less either as I'd call the "rendement" the total amount accumulated over the 30 years rather than the difference divided by the initial amount. But I mainly left it here to show that even something as small as 0.1% can be a huge difference if you consider the compounding effect of it. Therefore, an amount like 0.5% will basically be cutting away 7% of your gains (assuming a yearly return of 7%, so 0.5/7*100, that's the way I'd prefer to do the math).

[UncleX]

Just leaving this here: https://www.financieelonafhankelijkblog.nl/indexfondsen/

0.1% kosten bij beleggen geeft niet 3% maar 21% minder rendement na 30 jaar

Although in this example the math is correct, this is a very dramatic way of putting it into words. So after 47 years you would have over 100% less return, which I would understand as no return at all. Still you would have gained 2.2 million (which would have been 2.3 milion at 0.1 less cost).

True. I wouldn't necessarily call it 21% less either as I'd call the "rendement" the total amount accumulated over the 30 years rather than the difference divided by the initial amount. But I mainly left it here to show that even something as small as 0.1% can be a huge difference if you consider the compounding effect of it. Therefore, an amount like 0.5% will basically be cutting away 7% of your gains (assuming a yearly return of 7%, so 0.5/7*100, that's the way I'd prefer to do the math).

I totally agree.

[Dagobert]

Just leaving this here: https://www.financieelonafhankelijkblog.nl/indexfondsen/

0.1% kosten bij beleggen geeft niet 3% maar 21% minder rendement na 30 jaar

Although in this example the math is correct, this is a very dramatic way of putting it into words. So after 47 years you would have over 100% less return, which I would understand as no return at all. Still you would have gained 2.2 million (which would have been 2.3 milion at 0.1 less cost).

True. I wouldn't necessarily call it 21% less either as I'd call the "rendement" the total amount accumulated over the 30 years rather than the difference divided by the initial amount. But I mainly left it here to show that even something as small as 0.1% can be a huge difference if you consider the compounding effect of it. Therefore, an amount like 0.5% will basically be cutting away 7% of your gains (assuming a yearly return of 7%, so 0.5/7*100, that's the way I'd prefer to do the math).

Of course low cost has a impact in the long run. My point was that for a new beginner, getting started is more important than a few bucks a year in lower costs. After a year or two, when you feel more comfortable with investing, you've developed the habit of paying yourself first, etc, etc and you have saved up a nice sum of money, investing smarter in something with lower cost is important. I agree.
For now and easy and simple to understand concept is better than something a little bit cheaper but complex that scares someone away (in my opinion at least). Meesman is a good option for that.

[kristof]

OP here -- thanks for all the info everyone!

One quick question -- looking a little more at the ABN Amro costs again ( https://www.abnamro.nl/nl/images/Content/010_Prive/020_Producten_l_diensten/020_Beleggen/0_NIEUWE_STRUCTUUR/000_Documenten/pdf_Tarievenkaart_-_Zelf_Beleggen_(Plus).pdf ) it seems like transaction costs are waived for recurring investments in mutual funds ( 'Periodiek Beleggen in beleggingsfondsen' ) which would mean the only costs is the expense ratio of the funds plus the 0.18% (min 15 EUR/year) service cost.

So that seems like the best option (esp already having an ABN Amro account), and they appear to have a bunch of decent index funds in their 'recommended' list ( https://www.abnamro.nl/nl/images/Generiek/PDFs/050_Private_Banking/Beleggen/Funds_-_Recommended.pdf ).

But -- wanted to see if anyone actually has first-hand experience of using them for investing. If yes, what funds do you invest in? Any other costs that I haven't mentioned?

[UncleX]

One quick question -- looking a little more at the ABN Amro costs again ( https://www.abnamro.nl/nl/images/Content/010_Prive/020_Producten_l_diensten/020_Beleggen/0_NIEUWE_STRUCTUUR/000_Documenten/pdf_Tarievenkaart_-_Zelf_Beleggen_(Plus).pdf ) it seems like transaction costs are waived for recurring investments in mutual funds ( 'Periodiek Beleggen in beleggingsfondsen' ) which would mean the only costs is the expense ratio of the funds plus the 0.18% (min 15 EUR/year) service cost.

What about transaction fees when selling? Having a quick look it seems they charge 0.2% with a minimum of 1 euro. Not expensive, but not free either. Just something you should realise.