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What is a Vanguard, Betterment, WealthFront equivalent for EU-residents? Local banks usually offer a very small selection of funds and the fees are usually 2%,
by orestis 10y ago
What is a Vanguard, Betterment, WealthFront equivalent for EU-residents?
Local banks usually offer a very small selection of funds and the fees are usually 2%, which has a huge impact.
- Ecio78 10y agoVanguard is available in Europe as well, event though with a subset of products. In general, take a look at etf funds with low commissions. Search on bogleheads the wiki pages for Europe (there are also few for specific countries)
- orestis 10y agoTheir products might be available, but not the company. You are responsible for finding a broker that has reasonable fees.
- Ecio78 10y agoYou are probably right and it's not so easy to find broker proposing them. But I've read few days ago they are growing and thinking about improving their presence in Europe so this may change. Still, if you want to build a simple portfolio a-la Bogleheads I think it's easier to use big étf funds (they may not be at the same fee level of vanguard but the competition pushed then low enough to be ok)
- azatris 10y agohttps://www.bogleheads.org/wiki/EU_investing https://www.bogleheads.org/wiki/EU_investing
- FabHK 10y agoJust to emphasise that (a point Noah Smith @Noahpinion has been hammering home recently): The fees look small, but are absolutely astounding. If you put in some fixed amount regularly over, say, 35 years, and the asset manager charges 2% p.a., they easily take a third of your savings overall, or more. It is imperative (particularly in this low yield environment) that you keep your fees down.
- avar 10y agoWhat would you consider reasonable? 1%?
- FabHK 10y agoLess. 1% they still take a quarter of your money over 30+ years. At most 50 bips = 0.5%, but aim for 10 bips or less, like good old Vanguard.
- avar 10y agoDoes that assume some given rate of growth? 4%? What's the formula to calculate this?
- FabHK 10y agoI've put it into Excel a while ago with growth rates between 0% and 6%, the gist of it is fairly robust with respect to growth assumptions. A way to think about it is maybe this: remove 1% pa, and to first order you're down about a third after 35+ years. Now, in the scenario where you're saving regularly, there's much less to take away at the beginning, so the effect is somewhat ameliorated. But it's really this relentless pounding, shaving off a "small" fraction every year, that's so devious. As a consumer, it's hard to see. But the industry knows exactly what they're doing, which is why (for some products) they're paying these fat commissions, which is why you have all these friendly financial advisors calling.
- tonyedgecombe 10y agoYes, 0.99^35 ~= 0.70
- cpach 10y agoWhen I choose index funds I aim for ≤0.4%
- cpach 10y agoI think it's hard to give general advice for all EU countries. E.g. in Sweden you'd want to avoid the big old banks and choose a ”niche bank” such as Avanza or Nordnet. Then you’d put your savings into a ”kapitalförsäkring” or ”investeringssparkonto”, which are favorably taxed. However, this option is only available for Swedish citizens. So what’s best for you in terms of fees and taxes will probably depend highly on which specific country you live in.
- davidnge 10y agoSorry for hijacking your comment, I would like to know if there's Vanguard, Betterment, WealthFront equivalent for Asia as well, if anyone knows.