Hello all,

First post here after reading up the forum and other resources. I am a EU fiscal resident currently working in SE Asia, with a 75% SR. I plan to invest 1k euros per month and pay the minimum on my loans. I intend to live in the Eurozone long term.

Emergency fund: 6 months of expenses Debt: 10k student loans (1,9%) and 25k personal loan (0%) Tax rate: <5% for the next two years Age: 28, single Other investments: 12k in a 3%, tax-exempt savings account (though returns have been declining) + an incoming windfall which I would rather invest in an apartment than stocks/bonds at the moment.

The portfolio I have put together reflects my desired asset allocation, perhaps disproportionately tilted towards the EU market, which I find less volatile than the US market. I am relatively new at this so I would appreciate your help and criticism!

In a tax-exempt account (which only allows EU-based stocks or ETFs)

1. Vanguard FTSE Developed Europe UCITS ETF - 50% allocation - 0,12% TER

I chose this ETF due to Vanguard’s stellar reputation and lowest TER in its category. I am however a little bothered by the large exposure (20%) to the UK market because of the currency risk it creates. A possible alternative could be Vanguard FTSE Developed Europe ex UK UCITS ETF, though I would still hold CHF assets.

In a taxable account (note: the following ETFs all accumulate dividends, which I understand is better for tax purposes. My broker also charges zero transaction costs for them.)

2. iShares MSCI World EUR Hedged UCITS ETF – 20% allocation – 0,55% TER

I have read up on currency hedging and sources tend to be split on whether or not it is a good idea. I’m OK with losing out on returns, to some extent, in order to decrease volatility (which this hedged ETF should accomplish). However, I also understand that stocks are more volatile than currency in the long term, and that yearly dividends issued in foreign currency should be a natural hedge. I have also never been in a bear market so I cannot predict how I will react. The alternative would then be the considerably cheaper (0,20% TER) iShares Core MSCI World UCITS ETF. Which one should I go for?

3. iShares Core MSCI Emerging Markets UCITS ETF – 10% allocation – 0,25% TER

I am not a big fan of the large exposure to the Chinese market but the ETF seems to have a good reputation and I want some exposure to emerging markets. An alternative could have been a REIT ETF but I haven’t found an accumulating one yet.

4. Lyxor UCITS ETF EuroMTS All-Maturity Investment Grade (DR) EUR – 20% allocation – 0,16% TER

Lyxor has a less stellar reputation and iShares and Vanguard but I like the 100% Eurozone exposure and the relatively low TER. A potential alternative could be iShares Euro Inflation Linked Government Bond UCITS ETF (0,25%) but I am already invested in the Eurozone bond market. I would be more comfortable with an exposure to other markets but I haven’t found accumulating ETFs that offer it.

I look forward to your critiques of choice of ETFs, % allocation and underlying assumptions, especially regarding with currency risk. Thank you!