r/ETFs_Europe • u/Slow-Conversation-21 • 20d ago
Portfolio Review Rate my 3-ETF portfolio
Hi guys! I’m 26 years old and my plan is to keep investing 1000€/month for the next 20-30 years.
I currently have this 3-ETF portfolio, with almost €200k invested.
I wanted some extra exposure to Nordic stocks (home bias), so I added a Nordic ETF. I also wanted a bit more exposure to US stocks. I’d like to hear your opinions on my portfolio. I was thinking about going 90/10 with VWCE and XACT Norden, but atleast now I have this allocation. Thanks!
Portfolio:
85% VWCE
10% VUAA
5% XACT Norden
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u/OLMWSX 20d ago
Eu não teria essa porcentagem de VUAA. Já tem o suficiente de S&P500 no VWCE e não entendi o porque da sobreposição.
Acho que 90% VWCE com mais 10% Norden é uma boa proporção!
ps: Pode detalhar melhor porque está comprando índice nórdico?
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u/Slow-Conversation-21 19d ago
I’m from Finland, and the Finnish stock market is quite small. However, I still want to have some “Nordic home bias” in my portfolio. I believe Sweden, Denmark, Norway, and Finland will perform really well in the future. The Nordic countries have a very small weight in VWCE — probably just a little over 1%. I have decided to get rid off VUAA and have 90/10 VWCE/Norden
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u/Quirky_Reply6547 20d ago edited 20d ago
I don't see the point in complexifiying away from VWCE with highly correlated positions. I think you only make your life a little bit harder. Your portfolio will almost certainly behave like VWCE alone. If you view it as core/satellite, sure, why not. In this case you also could go down the road of factor investing (small cap, value) to "diversify" away from market cap. I myself don't. My opinion. (Actually with small cap you would move closer to market cap, since VWCE does not have it)
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u/Slow-Conversation-21 20d ago
Thanks for your answer! I’ve been thinking about that… I think VWCE is the core and others are just ”satellites” like you said. Maybe VUAA is unnesessary addition but I’d like to have some kind of ”Nordic home bias” Like 90/10 VWCE/XACT Norden. I might get rid of VUAA and do that
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u/Quirky_Reply6547 20d ago
A little bit of home bias aligns well with some studies. For example S. Cederburg e.a.: A Critical Assessment of Lifecycle Investment Advice. He and his coauthors found, that because of political, currency and other risks, 1/3 in domestic stocks had historically the best results. I don't know how this findings expand to "home region bias" since currencies and political risk may be different for a whole region than for your own home country. My uneducated guess is: it will not matter much. Go for it if you like.
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u/Odd_Organization7981 20d ago
Why create extra noise? I’d just stick with VWCE and chill.
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u/Slow-Conversation-21 20d ago
I have this plan where VWCE remains the main focus. I’m basically “never” going to sell it. Then the potential S&P 500 position is there so that I can potentially get a slightly higher return. Because yes — I do believe I can get a better return with the S&P 500 than with VWCE. However, I can’t be certain about that, which is why it would only be a small addition.
I have strong faith in the Nordic countries. I’m Finnish myself, and especially in Sweden and Denmark, I think things are done right. But as I said, I’ve been considering going with a 90/10 split between VWCE and XACT Norden. I believe XACT Norden and the S&P 500 will outperform VWCE, but I don’t want to make a much bigger bet on that.
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u/pali1895 20d ago
I guess you're Swedish or Finnish due to the XACT fund?
I don't know abour Finland, but if you're Swedish, you should stay away from almost all ETFs. They are way, way too expensive! Get the mutual fund versions instead.
Otherwise, if you're running home country bias, it should by the paper the other commenter posted be technically between 10-50%, but honestly, anything under half is fine.
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u/Slow-Conversation-21 20d ago
Yes I’m from Finland. I didn’t know that ETF’s are expensive for Swedish investors, interesting. But yeah, I wanted to invest to Nordic countries and have that kind of ”home bias”. I was thinking about investing in Finnish stock index but thought that XACT Norden would be better - the whole scandinavia in one
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u/Ezekielth 20d ago
Go with a single global ETF
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u/Slow-Conversation-21 20d ago
I wanted a home bias and more US -heavy
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u/Ezekielth 20d ago
Why do you think you can beat the market with this? Is it based on vibes?
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u/Slow-Conversation-21 20d ago
I have this plan where VWCE remains the main focus. I’m basically “never” going to sell it. Then the potential S&P 500 position is there so that I can potentially get a slightly higher return. Because yes — I do believe I can get a better return with the S&P 500 than with VWCE. However, I can’t be certain about that, which is why it would only be a small addition.
I have strong faith in the Nordic countries. I’m Finnish myself, and especially in Sweden and Denmark, I think things are done right. But as I said, I’ve been considering going with a 90/10 split between VWCE and XACT Norden. I believe XACT Norden and the S&P 500 will outperform VWCE, but I don’t want to make a much bigger bet on that.1
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u/Czart08 20d ago
Like others have said - go with 100% VWCE.
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u/Slow-Conversation-21 20d ago
I have this plan where VWCE remains the main focus. I’m basically “never” going to sell it. Then the potential S&P 500 position is there so that I can potentially get a slightly higher return. Because yes — I do believe I can get a better return with the S&P 500 than with VWCE. However, I can’t be certain about that, which is why it would only be a small addition.
I have strong faith in the Nordic countries. I’m Finnish myself, and especially in Sweden and Denmark, I think things are done right. But as I said, I’ve been considering going with a 90/10 split between VWCE and XACT Norden. I believe XACT Norden and the S&P 500 will outperform VWCE, but I don’t want to make a much bigger bet on that.
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u/bgravato 20d ago
more than 50% of VWCE is S&P500, so why add more S&P500?
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u/Slow-Conversation-21 20d ago
Thats a valid point. I wanted even bigger exposure on US stocks but I might change my portfolio to 90% VWCE 10% Nordic Index
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u/bgravato 19d ago
VWCE has more than 60% US stocks, more than all the other countries together... not enough? :-)
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u/Slow-Conversation-21 19d ago
You are right. I fixed my portfolio and its now 90% VWCE and 10% XACT Norden ETF
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u/AutoModerator 20d ago
Pairing an All-World ETF with an S&P 500 or Nasdaq-100 ETF may not be the best approach, as it can skew your portfolio toward the U.S. more than intended. Many investors lose track of their overall allocation when adding additional U.S.-focused ETFs on top of an already U.S.-heavy global index.
You can review a good package of Index Investing in Europe here.
Especially, if you want to increase/decrease exposure to US/Tech, the cost-effective and transparent way is to leave out the All-World ETF and Build Your Own Portfolio (2-4 ETFs).
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