The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Hegel on April 30, 2016, 02:38:44 AM
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Hello veteran mustachians!
My name is Marius, i am a young(20) aspiring mustuchian from denmark seeking financial advice from the pro's :)
Since i am leading a barebones lifestyle on my relatively modest income, i will be able to save and invest around $10,000 during the next 9 months, to get my stache going.
The trouble lies in the fact that i cannot invest in vanguard funds. I can invest in vanguard ETF's but they are heavily taxed compared to our national index funds.
All vanguard ETF's are taxed at 42% compared to the 27% tax on national index funds. Unfortunately the national index funds have an MER of 0,5% at the lowest.
My question is which index fund should i invest in since i cannot invest in vanguard.
I have the following options all with a 0,5% MER (all stocks):
INDEX DJSI World: Benchmark: Dow Jones Sustainability World
INDEX Europe Growth: Benchmark: MSCI Europe Growth
INDEX Europe Small Cap: Benchmark: MSCI Europe Small-cap
INDEX Europa Value: Benchmark: MSCI Europe Value
INDEX Global Stocks Minimal Risk: Benchmark: MSCI World Minimum Volatility
INDEX USA Growth: Benchmark: MSCI USA Growth
INDEX USA Small Cap: Benchmark: MSCI USA Small-cap
INDEX USA Value: Benchmark: MSCI USA Value
Thank you for your assistance, it is much appreciated!
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Welcome to the forum, Hegel!
I've not been to Denmark, but I spent six weeks up north in Sweden. Beautiful country!
0.5% expense ratio isn't great, but it's not that bad, either. And you're smart to avoid the higher taxed Vanguard funds.
What you should do is decide on an asset allocation and stick to it (see You Need an IPS in my signature). It doesn't look like you have anything like a total stock market fund. The 3 USA funds would pretty much cover the spectrum for American stocks, and you could do the same with the 3 Europe funds. Decide on a ratio of US : Europe and start investing.
Congrats on getting such an early start at age 20.
Skål!
-PoF
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"All vanguard ETF's are taxed at 42% compared to the 27% tax on national index funds."
You could very well be correct, but I've found something that says it's the level of income that determines this rate, rather than the underlying asset. Thought I'd pass it along.
http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-denmarkguide-2015.pdf
"Capital gains on shares and dividends are taxed at progressive rates as share income at 27% for income up to DKK 49,900 (married couples can receive up to DKK 99,800), and 42% thereafter."