Permanent Portfolio in Europe (follow-up)

[D.J.]

Hi everyone, here's my portfolio I'm looking to implement in the coming weeks. I'm in EU, so it's focused on Eurozone, however with 20% of assets in/related to US.

I added symbols since I lost a ton of time looking for the right ones.

Stocks
- xTrackers MSCI EMU, EUR (XD5E) - 20%
- Vanguard US Total Stock, USD (VTI) - 5%

Bonds
- xTrackers Government Bonds 25+, EUR (DBXG) - 20%
- iShares Treasury 20+, USD (TLT) - 5% [Changed from Vanguard LT Bonds]

Gold
- xTrackers Physical Gold, EUR (XAD5) - 10%
- SPDR GLD, USD (GLD) - 5%
- Physical gold - 10%

Cash
- Amundi ETF 3m, EUR (C3M) - 20%
- iShares Short Treasury, USD (SHV) - 5%
+ cash for liquidity

Let me know your thoughts. I'm slowly losing my mind with all the options.

[frugal]

Hi everyone, here's my portfolio I'm looking to implement in the coming weeks. I'm in EU, so it's focused on Eurozone, however with 20% of assets in/related to US.

I added symbols since I lost a ton of time looking for the right ones.

Stocks
- xTrackers MSCI EMU, EUR (XD5E) - 20%
- Vanguard US Total Stock, USD (VTI) - 5%

Bonds
- xTrackers Government Bonds 25+, EUR (DBXG) - 20%
- Vanguard LT Bonds, USD (BLV) - 5%
5
Gold
- xTrackers Physical Gold, EUR (XAD5) - 10%
- SPDR GLD, USD (GLD) - 5%
- Physical gold - 10%

Cash
- for now in two bank accounts for liquidity

Let me know your thoughts. I'm slowly losing my mind with all the options.

hi

why 20% in US?

Isnt is a Variable portfolio?

[frugal]

Hi everyone, here's my portfolio I'm looking to implement in the coming weeks. I'm in EU, so it's focused on Eurozone, however with 20% of assets in/related to US.

I added symbols since I lost a ton of time looking for the right ones.

Stocks
- xTrackers MSCI EMU, EUR (XD5E) - 20%
- Vanguard US Total Stock, USD (VTI) - 5%

Bonds
- xTrackers Government Bonds 25+, EUR (DBXG) - 20%
- Vanguard LT Bonds, USD (BLV) - 5%
5
Gold
- xTrackers Physical Gold, EUR (XAD5) - 10%
- SPDR GLD, USD (GLD) - 5%
- Physical gold - 10%

Cash
- for now in two bank accounts for liquidity

Let me know your thoughts. I'm slowly losing my mind with all the options.

hi

why 20% in US?

Isn't it a Variable portfolio?

Currency risk is not good...

[WhiteElephant]

That seems like a very reasonable portfolio to me. Certainly ‘good enough’.
One thing you have to keep in mind is that taxation of US-based etf’s can be very different from EU-based ETF’s, especially regarding withholding taxes and estate taxes.
I didn’t want to worry about stuff like that so I decided to just use euro-based etf’s

[stuper1]

Vanguard LT Bonds (BLV) has a lot of non-US Treasury bonds such as corporate bonds. If you are trying to use the PP philosophy, those don't fit. For safety, a US PP only uses US Treasury bonds.

[D.J.]

@frugal: I am comfortable with currency risk at 20% in USD, for the benefit of having exposure to US economy.

@WhiteElephant: If that's concerning local taxes, we have a fixed capital gains tax on everything so that does not affect me.

@stuper1: Thanks, good catch! I've changed that to iShares Treasure 20+ (TLT).

I've also added C3M (Amundi short-term bonds EUR) and SHV (iShares short treasury bonds USD) for cash allocation.

[WhiteElephant]

I believe the US withholding tax is 30% of the dividend yield. This happens before you pay your local taxes. Depending on the treaties between your country and the US you might be able to get some of the 30% back.
Irish domiciled ETF’s only pay 15% withholding tax on US assets so that could be a better deal.

This article contains more information about US withholding taxes en estate taxes for non-US investors, see section ‘Domicile of funds’:
https://www.bogleheads.org/wiki/Investi ... etherlands

[D.J.]

Great info, I'll read that in detail. Thanks!

[frugal]

@frugal: I am comfortable with currency risk at 20% in USD, for the benefit of having exposure to US economy.

@WhiteElephant: If that's concerning local taxes, we have a fixed capital gains tax on everything so that does not affect me.

@stuper1: Thanks, good catch! I've changed that to iShares Treasure 20+ (TLT).

I've also added C3M (Amundi short-term bonds EUR) and SHV (iShares short treasury bonds USD) for cash allocation.

hi

what if one day 1 USD = 3 EUR ?

Do you think USPP will do better than EUPP ? Why?

Regards

[D.J.]

This is exactly done for the case if one day $1=3€.

As far as I saw, the long-term gains are a lot higher on USPP than on EUPP.

[frugal]

@frugal: I am comfortable with currency risk at 20% in USD, for the benefit of having exposure to US economy.

@WhiteElephant: If that's concerning local taxes, we have a fixed capital gains tax on everything so that does not affect me.

@stuper1: Thanks, good catch! I've changed that to iShares Treasure 20+ (TLT).

I've also added C3M (Amundi short-term bonds EUR) and SHV (iShares short treasury bonds USD) for cash allocation.

hi

what if one day 3 USD = 1 EUR ? (changed)

Do you think USPP will do better than EUPP ? Why?

Regards

[D.J.]

In that highly unlikely event, I would lose ~14% of the portfolio (but I'm sure the EU part would grow that much more as a consequence). I don't see any of those two extremes happening. That said, if I would have to bet on likelihood, I'd say it's far higher for the EUR to get devalued against the USD than vice-versa.

[frugal]

In that highly unlikely event, I would lose ~14% of the portfolio (but I'm sure the EU part would grow that much more as a consequence). I don't see any of those two extremes happening. That said, if I would have to bet on likelihood, I'd say it's far higher for the EUR to get devalued against the USD than vice-versa.

I agree

do you have it in the same broker?

or one in US broker and another in EU broker?

Regards

[D.J.]

Same broker. Haven't looked into other options yet. Need to start investing, then when the portfolio grows so will the diversification for all elements.

[frugal]

Hello EU-PEERS,

Any news regarding your EU-PP portfolio?

I would like to know if you found new and better ETF's ?

Regards!

[D.J.]

I've been happy with CSEMU for stocks and DBXG for bonds plus cash and physical gold.

I also added a large portion of variable portfolio to just VWCE/VWRA for global stocks.

[Vil]

For the European PP using SXR7 and SXRJ for the stock piece . Piece of DBXG and (mostly) DBZB for the bonds. There are evidences that global bonds (as DBZB) may benefit EU investor for various reasons. See for example nice article from Vanguard.