1st portfolio build

Aido29

New Member
Messages
4
Hi,
I am new to investing and have been learning and researching for a while now. I have come up with the below allocations for my investment which will initially be 10k and then I will be adding to them quarterly. I am investing for long term(15+ years) and have purposely selected accumulating dividend ETF's. My goal is diversification for protection and I intend to have bond allocation equal to my age as I age....I'm currently 30. I will be investing with DeGiro and am I'm in Ireland.
I'd love to hear any opinions or thoughts from more learned experienced investors :)
30% in a bonds ETF (Thoughts on any are welcome)
30% S&P Index tracker (CSPX)
25% Euro STOXX 50 (CSX5)
5% Xtrackers small cap Europe (XXSC)
5% Mid cap U.S (SPY4)
5% emerging markets(?) or Global IT tracker (XDWT)

Thanks in advance!
 

username123

Frequent Poster
Messages
1,415
There are many threads about DIY investment on this forum, such as


The ones on taxation issues of ETFs for Irish investors being the most interesting. Have you read these?

Cutting a very long story short, general consensus is that UCIT ETFs are terrible from a tax and reporting to revenue perspective, especially if buying regularly like you propose. If you have another other debts, suggest to pay them off rather than doing this. General one is mortgage - overpay it rather than investing gives you guaranteed circa 3% return tax free, assuming you are not on a tracker. If you don't own a house, consider building a large deposit for one instead of investing. Finally, ensure you max your pension contributions (assuming 41% tax payer) before investing with net pay.
 

Aido29

New Member
Messages
4
Thanks for the reply user! To be perfectly honest, I have read lots of conflicting articles and posts around taxation in ireland and it blew my mind up. Ya I actually have a house deposit I should keep building up but I will be coming into a lump some of 30k early next year and wanted to invest some for my future. Any sign of them changing the silly taxation on us?
Thanks again
 

EmmDee

Registered User
Messages
145
Putting aside the alternatives (which may be better options - I don't know), the below is an ETF portfolio with a 70/30 split which has come out of a Roboadvisor platform (so the allocations are system generated - the specific ETF's can probably be inter-changed with others);

Euro Gov Bonds : 24% (VETY)
Euro Inflation linked Bonds : 6% (IBCI)
Equity US : 39.5% (VUSA)
Equity Europe ex UK : 11.25% (VERX)
Equity Emerging Markets : 7.35% (VFEM)
Equity Japan : 5.3% (MJP)
Equity UK : 3.9% (ISFA)
Equity Asia ex Japan : 3.2% (VAPX)

Take it for what it is - a sample portfolio
 

Aido29

New Member
Messages
4
Ah thanks for that! Must look through some.

It's awful frustrating dealing with the whole Irish tax issues. Wish things were just simple straightforward ha! Invest, ride it out, withdraw and pay x% reasonable tax on gains and move on.
 

PMU

Frequent Poster
Messages
955
30% in a bonds ETF (Thoughts on any are welcome)
30% S&P Index tracker (CSPX)
25% Euro STOXX 50 (CSX5)
5% Xtrackers small cap Europe (XXSC)
5% Mid cap U.S (SPY4)
5% emerging markets(?) or Global IT tracker (XDWT)
You're 30% fixed income; 35% foreign developed markets; 30% domestic (i.e. eurozone) equities and 5% emerging markets.

You've no exposure to the UK. It's a foreign developed market and is the world's 7th largest by market cap. I think it would be prudent to allocate some of your foreign developed market equities (i.e. the US) to the UK, or, better still, switch some of your bond allocation to the UK, i.e. sterling denominated equities. Then you are investing in two foreign developed markets (i.e. USA and UK).

Do you really need to make a significant investment in fixed income at this stage of your investment strategy, i.e. 30% to bonds? Why are you investing in fixed income if you are 30 and investing for the long term?

To me it seems you've a low allocation to emerging markets and a high one to bonds. So why are you doing this? When you look at these two allocations together, essentially you are betting or saying the returns on emerging market equities will be lower than experienced in the past with no risk reduction benefits, i.e. it's better to get risk reduction from bonds. You may well be correct. But growth comes from equities so again you could consider increasing your allocation to emerging markets from your bond allocation.

I also echo all the points made by previous posters on the taxation treatment of ETFs in Ireland.

[[Disclaimer: The above is comment / observation and is not a recommendation to follow any particular investment strategy or to buy / not buy any particular fund or stock.]
 

Aido29

New Member
Messages
4
Much appreciate the comments, thanks!
I'm worried about the UK tbh but I agree I should probably still have it included for sure. My bond allocation I should probably loosen alright especially as I'm young, thanks.
The main thing annoying me now is the whole tax ETF mess :( what are the odds that Revenue will change this in the near future?
I just really want to set up a portfolio and feed into it for my life 20+ years time...and not get slaughtered with tax and fees haha!
 

username123

Frequent Poster
Messages
1,415
I mentioned it, but you clarify any pension in above posts. Are you maxing your contributions? If not, you can use the 30K to make a single lump sum contribute for this year, I believe.
 
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