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Tax is likely to be the killer in this case.
Irish and European domilciled ETFs are suboptimal.
You need to go for a US domiciled ETF which will attract CGT treatment rather than "fund tax" treatment.
Hi,
I just got my first job and I am going to invest 1000 euro a month into a fund which tracks the S&P 500.
So far my best bet seems to be going with investing into an ETF which hedges USD back into EUR each month to minimize the effect of currency movements since I am living in Ireland. An example of an ETF I am looking into is "iShares S&P 500 EUR Hefged UCITS ETF", which has an expense ration of 0.45%:
So far everything seems to check out for me that it would be a good way to invest my money apart from the broker fee which I would have to pay each month since its an ETF.
So basically my question is how do I go about finding information on Mutual Funds rather than an ETF?
I got advice where I was told since I am living outside the US I should try Barclays who offer a similar fund to Vanguards Mutual Fund for tracking the S&P 500 but I can find out information on other places which could offer a Mutual Fund like I can when I google ETF's.
Should I contact places like Barclays and RaboDirect directly and ask them for information? They do not seem to have it all displayed on their websites or maybe there is another way to go about getting information? Maybe some of you might be able to recommend some good institutions to start with?
Any help would be appreciated and thanks for reading.
Hi,
I just got my first job and I am going to invest 1000 euro a month into a fund which tracks the S&P 500.
So far my best bet seems to be going with investing into an ETF which hedges USD back into EUR each month to minimize the effect of currency movements since I am living in Ireland. An example of an ETF I am looking into is "iShares S&P 500 EUR Hefged UCITS ETF", which has an expense ration of 0.45%:
So far everything seems to check out for me that it would be a good way to invest my money apart from the broker fee which I would have to pay each month since its an ETF.
So basically my question is how do I go about finding information on Mutual Funds rather than an ETF?
I got advice where I was told since I am living outside the US I should try Barclays who offer a similar fund to Vanguards Mutual Fund for tracking the S&P 500 but I can find out information on other places which could offer a Mutual Fund like I can when I google ETF's.
Should I contact places like Barclays and RaboDirect directly and ask them for information? They do not seem to have it all displayed on their websites or maybe there is another way to go about getting information? Maybe some of you might be able to recommend some good institutions to start with?
Any help would be appreciated and thanks for reading.
I am no expert on this but I would query why you want to "minimise the effects of currency movements". These movements are as likely to work in your favour as against you, and it will undoubtedly cost you money to hedge.
I would not be so overly concerned over changes in currency assuming your time window is more than 10 years. Yes if the euro strengthens over that time and you have invested in funds in which the underlying companies trade exclusively in dollars you will suffer somewhat, but in reality your fund will probably have more currency diversification than you think and of course the euro could weaken further too. Either way hopefully over a 10 year period the profit made would greatly exceed the currency risk.
You could invest some of your money in a European based ETF eg. a EU STOXX 50 tracking index denominated in euros if you are worried about currency fluctuations.
If the S&P 500 continued to perform at around 10% over a 22 year period I would reach my target
Do you understand that this is a really big IF.
Like winning the lottery big.
A plan based on the S&P doing 10% a year for 22 years is for the birds.
The annualised return of the S&P500 (with all dividends reinvested) was less than 9% over the last 22 years and that ignores the effects of taxes, investment costs and inflation.
At current valuations, a 22-year projection based on a 10% annualised return is wholly unrealistic IMO.
Not to suggest you cannot afford it or discourage you from trying to invest (or if you choose, save, or a combination of the two) but €1000 pm would be an unusually large amount to have available to invest or save from your first job. I would wonder how sustainable it would be over the long term, or even over the next two years.I just got my first job and I am going to invest 1000 euro a month into a fund which tracks the S&P 500
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