Stocks — Part XXI: Investing with Vanguard for Europeans

Please Note:

If you are outside Europe and the US, please be sure to read thru the comments on this post. They have become a valuable forum for investors from all over the world.


Who knew?

Certainly not I.

This all started when I wrote a series of letters to my daughter about financial stuff I felt was important for her to understand. Stuff she wasn’t yet ready to or interested in hearing. (I’m still waiting, Sweetie.)

I mentioned this to a couple of friends and, at their request, shared the letters. They encouraged me to put them on a “blog” as “posts” so my family and the rest of my friends might read it. And so they could more easily pass it on to theirs. One of them pointed me to WordPress.

I simply never dreamed an audience would develop beyond my little circle of friends and family. That’s not false modesty. I quite literally had no idea blogs could or did have larger readerships.

When I started this one, I barely knew what a blog was. In fact, the first blog post I ever read was my own. Then I began reading James Altucher, one of the first people to encourage me on this path. It was probably six months or so later before I stumbled on ERE. And then MMM. And then, and then, and then…

So as you might imagine, it really rather stunned me to see jlcollinsnh develop an international readership. Boy howdy! Given my love of travel, this remains quite the thrill.  I first noticed it about ten months in and shared my discovery with the post Where in the World are You.

So far this month, there have been 85,706 page views and of those, fully 12,006 are outside the USA. Collectively, the countries of Europe are the second largest market.

But for these readers, the information here tended to come up short. The problem is, the investment tools we have so easily available here in the USA are either very costly or simply unavailable to the rest of the world. And since I know nothing about the specifics of what is available in the rest of the world, other than the core principles of investing described in this Stock Series, there was little here to help.

Not to say I didn’t try. The second half of the post What if you can’t buy Vanguard addresses it a bit. And I am very pleased to see the comments section of that post has become a sort of Forum where my international readers have posted their own experiences and questions.

Fortunately, Mrs. EconoWiser of the Netherlands is here to help. As you might guess from the name of her blog, she writes about living and spending efficiently. But around about March of last year she began reading jlcollinsnh. And she noticed the woeful lack of specific guidance as to how to implement the ideas here. But rather than throw up her hands, she set about figuring it out.

She’s done a brilliant job and, if her name sounds familiar, it might just be because I’ve had the frequent occasion to link to several of her posts in helping my European readers. Her research and insights are that impressive. So much so, in fact, I’ve come to think of EconoWiser as the European division of jlcollinsnh International. Egotistical and presumptuous on my part perhaps, but there you have it.

With all this in mind, about a month ago I asked her to write this guest post summarizing her low-cost index investing strategies for Europeans.

If you live in Europe, this is a must read.

If you live in another part of the world, maybe it will inspire you to follow her lead and figure it out for where you are. (And I’ll have another guest poster!)

If you live here in the USA, read it and appreciate just how easy and inexpensive the options we have here are.

But wherever in the world you are: Enjoy!….


It’s an honour to write a guest post for this wonderful blog. My “uncle J.”, as I like to affectionately call him, has taught me so many things about life and index investing. As a newbie on the index investing topic I decided to check out how this works for Europeans. As I’m a Dutchie myself, I was eager to find out how to make this index investing miracle work for the Dutch and consequently my fellow Europeans. This post will provide a rather general overview of my findings so far.

The Strategy

You should be familiar with J’s strategy if you’ve read the stock series on this magnificent blog. (If you haven’t, you should read the series first and read this blog post afterwards) A summary:

  1. If you can do business with Vanguard, do so as they are the only investment company out there that puts the interests of their customers first
  2. Buy broad-based index funds
  3. Costs matter hugely
  4. Keep it simple

And I’ve got some good news for you: we can apply the jlcollinsnh index investing strategy in Europe as well! Yay!

Investing With Vanguard In Euros

Unfortunately, you can’t open an account with Vanguard in Europe as a private investor. Unless you have €500,000 ready to invest (in which case: well done you!), you’ll have to go through a broker. Yes, let’s envy the American index investors who are able to open an account with Vanguard directly for a moment here and then let it go.

Vanguard Europe currently holds offices in seven European countries. You can contact your Vanguard office in: Denmark, France, Germany, The Netherlands, Sweden, Switzerland and the United Kingdom.  Staff are very friendly and helpful, you can ask all sorts of questions about their products. However, they won’t give you investment advice. If Vanguard doesn’t hold an office in your country I suggest you go to the Vanguard global portal and click on the United Kingdom. Click on individual investors and then exchange-traded funds or mutual funds (I will explain the difference shortly). You will find all the information you’ll need.  I am referring to the British Vanguard website ,even though all European Vanguard website content is in English.

Disclaimer: please bear in mind that when investing with Vanguard Europe you are NOT investing with the American cooperative non-profit organisation. Vanguard Europe is an independent subsidiary. In my humble opinion their philosophy matches the American parent company exactly. However, it is not a cooperative non-profit organisation in and of itself.


Let’s do something useful with our euros instead.

Vanguard Mutual Funds Vs. Vanguard ETFs

First things first, you need to decide whether you want to invest in mutual funds or ETFs (Exchange Traded Funds). In this article I will assume that you want to invest in Vanguard ETFs. The reason for my assumption is that ETFs are index funds that trade on the major stock exchanges and are traded like stocks. Mutual funds might be a bit more difficult to buy for some Europeans. Vanguard ETFs have lower expense ratios compared to the Vanguard mutual funds. They can be bought and sold throughout the day instead of once a day at closing prices. As we do not have IRAs or 401(k) plans to take into consideration, ETFs are a great option for European investors. ETFs pay out all dividends which you will need to reinvest yourself, whereas a mutual fund automatically reinvests the dividend for you. However, transaction costs might be lower for mutual funds if you can obtain these through a broker specialised in index investing.

An overview:

Vanguard Mutual Funds Vanguard ETFs
Higher total expense ratio Lower total expense ratio
Can be bought and sold once a day at closing prices Can be bought and sold throughout the day like regular stocks
Might be a bit more difficult to buy Accessible to all Europeans
Option to automatically reinvest dividend Dividend is paid out, which you might want to reinvest yourself
Transaction costs might be lower through a broker specialized in index investing Regular broker fees apply, however there are cheap ones out there
Very interesting for smaller amounts of money on a monthly basis due to brokerage commissions (if available) The higher the amount you want to invest, the more interesting concerning brokerage commissions, great for lump sums

In this blog post I’ll focus on stocks-only. The same strategy applies to bonds (and REITs if you’re investing in dollars).

Here’s the Vanguard ETF selection you, as a European, are able to choose from:

Vanguard exchange-traded funds TER Available currencies ISIN
Vanguard FTSE All-World UCITS ETF 0.25% USD/GBP/EUR/CHF IE00B3RBWM25
Vanguard FTSE All-World High Dividend Yield UCITS ETF 0.29% USD/GBP/EUR/CHF IE00B8GKDB10
Vanguard FTSE Dev. Asia Pac. Ex Japan ETF 0.22% USD/GBP/EUR/CHF IE00B9F5YL18
Vanguard FTSE Developed Europe UCITS ETF 0.15% GBP/EUR/CHF IE00B945VV12
Vanguard FTSE Emerging Markets ETF 0.29% USD/GBP/EUR/CHF IE00B3VVMM84
Vanguard FTSE Japan UCITS ETF 0.19% USD/GBP/EUR/CHF IE00B95PGT31
Vanguard S&P500 ETF 0.09% USD/GBP/EUR/CHF IE00B3XXRP09
Vanguard FTSE 100 UCITS ETF 0.10% GBP IE00B810Q511
Vanguard Government Bond UCITS ETF 0.12% GBP IE00B42WWV65

All hyperlinks link to U.K. factsheets. However, the facts are similar for all European countries (even if there isn’t a Vanguard office in your country).

Obviously, we’re investing in a European currency here. I will discuss investing with dollars later on in this article.

Buy Broad Based Index Funds

If you check out the different prospectuses you’ll quickly come to realise that there’s a one-stop shopping option for all your diversification needs. That would be the Vanguard FTSE All-World ETF at 0.25% TER. Through this fund you’re investing in 2,900 holdings in nearly 47 countries, including both developed and emerging markets. The fund covers more than 90% of the global investable market capitalisation. This way there’s no need to mix U.S., European and emerging markets yourself as the fund has already done this for you. Unfortunately, it doesn’t include small cap. I’m not telling you what to invest in here, do whatever floats your (Vanguard) boat.


Floating boat. Not photo shopped, the water in Greece is just that clear.

Here’s the lowdown on the fund:

Vanguard FTSE All-World UCITS ETF
Greater Europe 27.36%
Greater America 52.25%
Greater Asia 20.39%
TER 0.25%

Find a broker – costs matter hugely

Now that you’ve checked out the different options in mutual funds and ETFs you’re going to find yourself a broker. You’ll need to invest a couple of hours of your time to find out which one suits your needs best. Google is your friend. Obviously, costs are very important. In The Netherlands we have many wonderful online brokers now, which offer accounts at rock bottom costs and will only charge transaction fees. Check out and compare transaction fees, custody fees, membership fees, and service fees. If you’re not charged for opening an account, why not open several accounts with different brokers so that you can also check out their interface and what not? Oh, and phone them. Ask them lots and lots of questions.

Before We KISS, There’s The Tax Thing

There’s this thing called the dividend leakage, and it’s a pain in the backside for investors. Unfortunately, it’s a significant cost for investors. As most of the European Vanguard funds are domiciled in Ireland you need to be aware of the Irish double taxation agreement. A (non-Irish) European investor is charged dividend withholding tax by the Irish government. Whereas the Irish investor can claim this dividend withholding tax back from their government, the rest of us (in most cases) can’t. You can ask your national tax department on your country’s dividend tax treaty with Ireland. The EU does not approve of this tax, but there is nothing you can do about it. You might want to check out investing with Vanguard in dollars. Hey, what a coincidence. I’ll go through that option in a minute. If not, you’re just going to have to suck this one up.

Let’s Keep It Simple, Sweetheart!

If you follow these steps you will have identified which fund(s) you are willing to throw your cash at (on a monthly basis?), have found the best and cheapest broker because costs matter hugely and you will have accepted the fact that there is a dividend leakage (or have tried to work your way around it…or have given up on investing after all…don’t!).

Yes, but…what about the dollar version? Oh, so you don’t want to KISS just yet? Okay, here we go!


No thanks.

Investing With Vanguard In Dollars

Again, you want to buy broad based index funds. Of the many Vanguard funds you will be able to choose from through your broker (which we’ll select later on) I chose two different options to illustrate how to go about investing with Vanguard in dollars. You can also buy bonds and REITs through your broker specialised in international stocks. However, for simplicity’s sake I’m referring to stocks-only here. Oh, and make sure you check out Morningstar when comparing funds.

Vanguard Total Stock Market ETF Vanguard Total World Stock Index ETF
Ticker VTI VT
ISIN US9229087690 US9220427424
U.S. 98.35% 53.38%
Greater Europe 1.56% 26.63%
Greater Asia 0.10% 19.99%
Amount of stocks 3609 5109
TER 0.05% 0.18%

Option number one is the Vanguard Total Stock Market ETF, which is as close to J’s favoured VTSAX as we can get. However, as a European investor you’d be investing almost entirely in U.S. stocks. Option number two is the Vanguard Total World Stock Index ETF. This will give you a one-stop shopping experience and all the diversification you’ll need over all markets.  (Also recommended by Malkiel and Ellis in The Elements Of Investing, p. 122)

Again, Find Your Broker

You’ll want to do another research on finding the best and cheapest broker for your dollar stocks. It could just so happen that the best and cheapest broker for your transactions in euros does not fit the requirements for your dollar transactions. Google is your friend, once again. Check out and compare transaction fees, currency exchange fees (very important in this case!), custody fees, membership fees, and service fees. You also want to inquire after the broker’s custodian, which might not find itself in your home country. This shouldn’t be a problem, you just want to know where your stocks are if ever you need to reclaim them if your broker goes bankrupt.

rich guy Bankrupt

Will LTC Bankrupt the Nation?

 Not Another Tax Thingy?!

Yep, another tax thingy. See, the U.S. government will charge up to 30% dividend withholding tax. However, that depends on your country’s dividend tax treaty with the U.S. My country has a cool deal with the U.S. and thus my dividends will be charged with a 15% withholding tax instead of 30%. The remaining 15% withholding tax can be reclaimed by filling in a W-8BEN form. You should renew this every three years. If you’ve found yourself a broker specialised in investing in dollars, they’ll probably know how to handle this. Ask them about the form. My broker will automatically send me a new form every three years which I can sign online. No biggie. You could also contact your national tax department in order to require after the rules that apply to your specific situation.

Currency Risk

You probably guessed that you’ll need dollars in order to invest in dollars. It’s important that you find a broker who will exchange your euros for dollars at rock bottom costs. However, you also need to bear currency risk in mind. As you live in Europe, you’ll probably want to cash out in euros someday. If the dollar has devaluated strongly against the euro  at that point in time, you might be disappointed. Consequently, if the dollar thrives and the euro doesn’t, you could be in for a windfall. Who knows? Maybe it’s also not all bad news when thinking about long-term investors. Come to think of it, when investing in euros your cash is also transferred into dollars but you just don’t see that happening. The base currency of the index will be in dollars anyway. Investing in euros in international stocks does not totally protect you against currency risk either.

Scary stuff, right? Now, there’s a way to sort of insure yourself against this currency risk. It’s called hedging, it doesn’t come cheap (that’s an understatement) and my guess is uncle J. probably won’t be a huge fan either. It sort of comes down to you adding euros to your brokerage account. Instead of transferring your euros into dollars, you’re borrowing dollars against a certain rate. You’d then be paying interest on that loan. As we’re long-term investors this would destroy our profits. So let’s just forget about it. I’ve mentioned it, and that’s that.



Now that you have investigated the different options for investing with Vanguard in euros and dollars you can make your own risk analysis. Take into account things such as currency risk, costs, dividend leakage and broker bankruptcy risk (custodian is important here). Choose your strategy and stay the course for the next thirty odd years or so.


You’ve solved the index investing in euros puzzle!


Or the dollar version!

Good luck!


Mrs EconoWiser

Disclaimer: I am not a professional investor or financial adviser nor do I claim to be one. You are solely responsible for your own financial investment choices. I am not responsible for inaccurate information in this blog post. I am merely sharing ideas and findings of my very amateurish investigation in index investing for Europeans.

Addendum: Want to translate this blog from English to another language? Google Translate makes it easy. Just click on the link, type in and choose the language you prefer. Click on the link for that language and you’re done!

Addendum 2: More for investors outside the US…

 An International Portfolio from The Escape Artist 


Be sure to read the comments to this post. There is a wealth of additional information in them. My thanks to those who have contributed!

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  1. Rob says

    Thanks Mrs EconoWiser and jlc for the article. All good stuff, though UK readers might want to note the situation for us is better than the Dutch situation in the article. Some points to note:

    – You’ll need £100k per fund to invest directly with Vanguard (rules most of us out, but still lower than €500k for rest of EU mention in the article!).
    – Therefore most will need to a broker – the excellent Monevator has a cost-based comparison table indicating which brokers have Vanguard mutual funds.
    – If you stick with mutual funds there’s no witholding tax. Likewise for UK or Irish listed ETFs*, but you pay trading fees.
    – Generally you’ll want to stick with an ISA – no capital gains or dividend taxes (for the non-UK readers, an ISA is a type of tax-free account with an annual contribution limit).

    * Those really interested in such things (!) should check out this article, but personally I stick with the mutual funds for an easy life.

    • theFIREstarter says

      Great article Mrs EconoWiser!
      There isn’t much info about for European and UK vanguard investors out there (on blogs at least) so good job.

      @Rob – what funds are you investing in just out of interest? I’ve just opened up an ISA with best invest and put a small chunk into the 80% stocks life strategy fund. Would be very interested to see what other UK investors are picking, and with what broker (and why)


    • Adam says

      Hi Rob / Mrs EconoWiser / others,

      I’m UK-based and looking into the Vanguard funds rather than ETFs too (the funds being cheaper than the ETF with its 0.25% charge). Have you come up with a good way of emulating the All World ETF with funds? I was thinking something like:

      FTSE U.K. All Share Index Unit Trust TER 0.08% – more than 50% of this

      FTSE Developed World ex-U.K. Equity Index Fund TER 0.15% – a lot of this
      U.S. Equity Index Fund (S&P Total Market) TER 0.10% for the lower TER but probably overlaps will the FTSE All share fund more.

      And then maybe a little of the MSCI Small Cap and/or Emerging Market funds:
      Emerging Markets Stock Index Fund TER 0.27%
      Global Small-Cap Index Fund TER TER 0.37%

      The last two are domiciled in Ireland, I’m not sure what effect that has.

      I’m considering a simple combination of the FTSE All Share and U.S. Equity Index funds – although I’ve not decided on a good ratio yet.

      This Monevator post also lists some interesting combinations (updated in 2013 despite the URL):

      What are your thoughts?

      • Adam says

        At Jim’s request I’m posting a follow-up.

        I decided to stick to funds with a focus on keeping costs down. The UK Index tracker is the cheapest, but I didn’t think it was diverse enough to warrant being 50% of the investment as I planned above, so I eventually decided on this allocation:

        70% Vanguard US Equity Index Fund Acc (0.10%)
        15% Vanguard FTSE All Share Index Fund Acc (0.08%)
        10% Vanguard FTSE Dvp Europe ex UK Eq Index Fund Acc (0.12%)
        05% Vanguard Japan Stock Index Fund GBP Acc (0.23%)

        By choosing these funds over the World ETF, I’m sacrificing some diversification over keeping the costs down. The US weighting is higher than the real world market (about 50%), but I couldn’t resist the low cost (plus, Jim’s comments regarding 100% US portfolios for US residents had some influence). Likewise for the UK having such a high percentage – it’s just because it’s so cheap. There is also a Pacific Ex-Japan fund that I like the look of, except it also costs 0.23%, and I decided I’m already paying enough diversification penalty for the Japan fund.

        I chose an ISA account at Charles Stanley Direct as the broker, who at the moment don’t charge for fund trading, but charge a 0.25% platform fee. The best place to invest depends on how much you will have invested, and whether it’ll be ETFs or Funds, the Monevator broker comparison posted by Rob above is kept up to date and is very useful.

        One thing I’m curious about, although nowhere near having to worry about yet, is once a fund reaches £100,000 you can go direct with Vanguard. But they currently don’t offer ISA accounts and I’ve wondered about, but not calculated, the implications of being taxed vs. not having to pay platform fees. I’ve not been able to find anybody discuss this specific case online so far.

        Anyway I’m just getting started so I may adjust as I learn, but thought I’d post my decision here for any UK readers thinking of doing something similar. 🙂

          • Gwynster says

            If you are an expat living in Japan Andrew Hallam is worth looking up.
            Investing your money offshore, if eligible could save you on capital gains. Depends how long you will be away for I suppose.
            Just a thought.

        • theFIREstarter says

          Hey Adam

          Sounds like a pretty good allocation if a little US heavy. I’m no expert but is there not some sort of currency risk with that, I vaguely remember reading something on Monevator about it, might be worth doing a bit more digging before fully committing to such a large US allocation (or maybe Jim can clarify… There is every chance I am spouting manure).

          ISAs vs lower Vanguard fees is a non contest for me, although again I’ve never read anything on it or done the proper calculations myself 🙂

          I’m simply going on the fact that tax on dividends and capital gains is order of magnitudes higher than platform fees (~20% vs ~0.2%) so surely you are much better off being within a tax wrapper at all costs, whether that be SIPP or ISA.

          Saying that, there is a tax free allowance on CGT and Divs per year isn’t there, so maybe the optimum strategy would be to have some portion of a larger portfolio directly with Vanguard, but only once you’ve maxed out your ISA and SIPP allowance. We’re talking mega bucks income levels here so it is something I’ll never have to think about that is for sure 🙂

          • jlcollinsnh says

            Hi FireS…

            Good point on the currency risk. I’m not familiar with the Vanguard US Equity Index Fund as available in the UK, assuming it is dollar based, having 70% in it does tie Adam’s fortunes to the US dollar rather than the Pound.

            Being US based myself, I tend not to see this as an issue. But were the roles reversed and my investments tied me to the Pound it would give me pause.

            Of course, while the dollar has been exceptionally strong of late, no one really knows how it will fair against the Pound going forward. And that’s the risk.

            However, here’s another way to think about it. In owning Vanguard US Equity Index Fund you own a piece of lots of business and your fortunes will be tied to their performance over time. Pounds and dollars are simply measuring sticks, kinda like kilos and pounds.

            At the end of the day, those businesses will have whatever value their enterprising success creates. What measure you use for it seems to me secondary.

            Not being one, I’m not sure how economists would think of this concept. But perhaps it is something to consider.

          • Adam says

            You’re too late! I already invested. 🙂 Hehe. In terms of currency risk, it’s true it’s a risk but meh, I’d rather have the diversification provided by the international stocks than only investing in the UK in GBP. If you think about it, *anything* outside the UK is currency risk, and if the pound is strong when you want to cash-in, then you should’ve invested stronger in the UK anyway because that’s where the value is. Plus, I’m not bound to a country – I guess if you’ve got the cash most places will have you – so you can go to where the currency benefits you if you have to. 🙂

            I’m currently living in Japan and earning my salary in Yen. The Yen is weak, the pound is strong. So I’m doing it backwards, but if I worried too much about the risk I wouldn’t have taken the opportunity to get the life experience, which is a far greater loss than a percentage of my net worth! Similar with investing, I had already spent far too long in analysis-paralysis so at least I got started with something that looks not-too-bad.

            Maybe I’m being a bit gung-ho but I’m just starting and will adjust as I learn, so good to think about.

            In terms of tax, the reason I’m not sure is that tax is on gains and income, whereas the platform charges are on the entire portfolio. Given how unintuitive tax and interest are, I’m not making any assumptions until I’ve ran the numbers and had them double-checked. I’ve got until I own more than £100k in a single Vanguard fund to figure that out…

        • Richard says

          Hi Adam,

          Vanguard now provide ISAs since your comment some time ago. I was wondering whether this is the route you use for investing now?


    • DanTheLion says

      I’m new to the JL Collins fan club and have become a convert to his philosophy but I’m now aged 60.
      As an UK resident I have decided (after checking with Monevator) that the low fee Vanguard (VEVE) Global ETF is the nearest equivalent to the VTSAX.
      So I will shortly be transferring all my ISA pots into this.
      My next mission is to look at my Old Mutual pension fund and sort that out accordingly.

      Any comments from UK JLCollinsNH fans would be welcome.

    • Rebecca Jones says

      I am a total novice when it comes to investing. I am halfway through Simple Path to Wealth and that is the only knowledge I have. I have read the above article so I have been looking at the Vanguard global ETF funds with 100% equity.
      I know to look for low OCF but what else should I be looking at to compare the four different fund accounts? Total assets? Number of stocks?
      I’m leaning towards FTSE All-World UCITS ETF (VWRL) but the All Cap fund has more stocks?? I don’t even understand what All Cap means ??

      Hope somebody can shed some light

      • DanTheLion says

        I know how you feel. I had a similar quandary because I couldn’t get access into the Vanguard US all stocks that JLC mentions so I plumped 100% for the Vanguard S&P 500 UCITS ETF (VUSA) with an OCF of 0.07%.
        So far so good.

  2. SR says

    In the country I live in (Finland) I am able to buy a European Index fund with an expense ratio of 0,45% and a North American Index fund with an expense ratio of 0,43%. For both, you’d pay an additional 0,1% when you buy the fund and 0,1% when you sell it. Divindends are automatically reinvested. I invest quite small amounts every month. Would it be worth it for me to switch to buying Vanguard mutual funds (or ETFs) through the UK site?

    • Mrs EconoWiser says

      I don’t know whether the same tax rules would apply to you as a non-UK resident? You’ll have to figure that one out first. Plus, you can only invest via Vanguard UK directly if you have at least 100.000 pounds to invest…

  3. Faw says


    It’s funny I think, as if the universe is telling me to do something. I’ve always been frugal for some reason and it’s not something I picked up from home. Even as a kid I was saving and “investing” of sorts and realized saving was a good thing.

    Coming across MMM and this blog a few months back I was really inspired to invest in Vanguard and I found out about the ETFs. I live in Sweden so I can’t really invest 500K being the student that I am.

    However I started investing every 3 months with Vanguard because of the transaction fees and I’m really glad I did. In addition to spreading my investments I feel like I can take a bigger part of what is written here to heart. Sweden, too, has the arrangement for the 30% tax back (15+15) so it comes in hand quite nicely.

    However we’re very lucky to have a index fund with 0% fee that follows the SIX30RX. But thank you for enlightening others and helping me pursue a friend to invest with Vanguard too. I told him about it just last week and like a sign from above I get this!

    Our fee is currently 0,05% for the Total Market ETF and I’ll post a link for anyone Swedish that might be reading this blog down below:

    Thank you for the well written article and tips and I wish you the best in your future endeavors!


    • Simon P says

      Two years after the comment, but in case other Swedes are reading this: As a Swede I don’t recommend investing with Vanguard. The costs just aren’t worth it. The sensible Swedish investor will use an ISK account, since the tax advantages are major. Sure, if you buy and hold and don’t sell for something like 40 years, you might get an advantage with a regular account, but for most people an ISK is the better deal.
      However, an ISK cannot be denominated in Euros or Dollars. This means that when you’re buying an ETF denominated in Euros, you’re paying an exchange fee. Then the ETF pays a dividend, in Euros. You pay an exchange fee to convert it to SEK. Then you reinvest that dividend, and pay an exchange fee again. Not to mention the money you lose on the dividend tax. Even if you get it back, it’s still perhaps a year that this money is out of the market before you get it back. That creates a drag.
      Personally, I only invest in SEK denominated funds. as yong as you don’t want to do factor investing, we have plenty of good funds. I use Avanza Zero (0% ER), Länsförsäkringar global index (0.2% ER) and Länsförsäkringar tillväxtmarknader index (0.4% ER). SEK-weighted, I pay an ER of 0.16%, which is fine, and I’m sure I save more than if I’d go for foreign ETF:s with lower ER:s.

      • Sensim says

        @Simon P

        Do you know if there is a way to see how big the exchange fees are (for the ETF:s) using Avanza or Nordnet?

        I still would like to do the calculations before I rule out the obviously very good Vanguard broad indexes.

        • Simon P says

          Last I checked the spread was 0.5% on Avanza and Nordnet, meaning you pay 0.25% buying and another 0.25% selling. Since dividends are exchanged twice, remove 0.5% from all dividend payments.

          Actually, you might be right that it’s still worth it. Do share your calculations!

  4. David says

    Wow – talk about perfect timing for this post….

    ….I’ve been reading your blog for the last week. I am 30 years old, live in the UK, and have £120,000 in the bank, which is sitting doing nothing.

    My friends and family are all telling me to buy a house; but for me the figures don’t add up. I currently rent an apartment for £550 a month; this price includes all rates and building maintenance fees, and furniture. To buy an equivalent apartment would cost at least £130,000, and I’d have to furnish it, and pay over £200 a month in combined rates, maintenance fees, and other owner-related-costs.

    Am I mad in thinking that the figures don’t add up? I’m seriously considering using £100,000 to invest in Vanguard directly (i.e. at lowest cost), and still have a £20,000 nest egg. I currently live on about 60% of my wages, so can increase my savings every month.

    Any opinions on this plan?….I guess the question is, which Vanguard fund to invest in?

    – David

    • jlcollinsnh says

      Good to hear it, David…

      and glad you found your way here.

      Since you are in the UK, I’ll let Mrs.EW suggest the right Vanguard fund. But as for the house…

      It is really pretty easy to run the numbers to see how a house stacks up against the alternative. Here’s how:

      But even if the numbers look good for buying, consider these cautions first:

      Good luck!

    • Mrs EconoWiser says

      Dear David,

      Well done you!

      You might want to click on Rob’s suggested links.

      As a non-UK resident, this one is difficult for me to answer.

      Looking at the mutual funds (no withholding tax for you according to Rob) you might consider a great percentage of the SRI Global Stock Fund (developed world) combined with a small percentage of the Global Small-Cap Index fund and a small percentage of the Emerging Markets Stock Index Fund in order to replicate the Total World Stock ETF holdings (my absolute favourite, however only available in dollars). You should also consider whether you’d already want to buy bonds or not.

      In the ETF department my absolute favourite is the FTSE All-World UCITS ETF, since it is a one-stop shopping option for investors in Europe. It’s not as diversified as the Total World Stock ETF in dollars (5109 stocks), but you’re in diversified in the US 53%, Greater Europe 27% and Greater Asia (including Emerging) 20% investing in 2575 stocks.

      Hope this helps?

      • Rob says

        According to their site, going with Vanguard UK direct is for funds only. If you want ETFs you’ll need to go via a broker (be careful to get one who doesn’t charge for holding ETFs, as some do).

        Mrs EconoWiser’s choice of ETF – VWRL – is a good one if you’re going the ETF route. The closest fund equivalent is the LifeStrategy range which is similarly globally diversified. It’s a teensy bit more expensive than buying separate funds or ETFs (annual charges, or OCF, of 0.29%), but it rebalances itself so is zero maintenance (keeps roughly fixed percentages in each market as they fluctuate in value, rather than doing it yourself with separate funds). If you’re adding more each month, then funds are usually better as they don’t generally have transaction fees like ETFs do.

        VWRL is 100% in stocks. The LifeStrategy funds have a varying percentage in stocks, 20-100%, depending on which version you pick (the rest being in bonds). Higher percentage in stocks is considered higher risk with potentially higher returns. Given you’re age, I’d stick with the 60, 80 or 100% in stocks depending on your attitude to risk.

        LifeStrategy funds are more heavily in UK stocks than VWRL. The advantage for UK residents is reduced currency risk (the risk £ goes up in value, making the majority of your portfolio, not priced in £, worth less); the disadvantage (if you see it that way) is you’re more heavily exposed to the UK market.

        One final thing to note is that if you go direct with Vanguard you can’t use any tax wrappers like an ISA – you’ll be liable for capital gains tax when you sell and income tax on dividends. If you’re on higher or additional rate income tax this is a big deal. If that’s the case, consider using an ISA with a broker as well, transferring up to the ISA limit each tax year from your taxable account.

        Good luck and hope all that helps!

          • David says

            Wow, thanks to all of you for your replies; plenty of food for thought here. The tax thing is a big deal; I’m not a higher rate tax payer yet but I’m hoping to be in the next few years; so it would appear that the best idea would be to use my full ISA allowance (£11,500) every year I guess.

            Since I’d be investing for the long term (we’re talking decades); I see over exposure to the UK market as a disadvantage – I’d like exposure to as large a number of companies in as many developed/emerging countries as possible. Basically I’d like to convert all my money from fiat currency to real ‘stuff’; and the best way I can see to do that is as wide a range of stocks as possible.

            Rob; do you have any UK broker recommendations?

          • Rob says

            Re: UK brokers – bit a minefield at the moment. New regulations (called the RDR) are coming in to force which aim to make costs more transparent, but as a consequence brokers are having to change their charges. Most have already changed but there are debates about the sustainability of some of the cheaper brokers. If only life were simple eh!

            For an at-a-glance summary of costs, check out the colour coded tables here. Note that it makes assumptions about holding vs funds ETFs, number of trades etc., but is good for getting a rough idea. A more detailed listing is available at Monevator, which is the best source for UK investing info IMO (check their search engine if you have specific investing questions, very handy).

        • Emma says

          Hi all,

          I’m also a UK resident, though with considerably less to invest than David! I’ve been on Vanguard’s UK website and it seems they do now offer a stocks and shares ISA, and it appears that I can invest directly into the FTSE All-World UCITS ETF using cash from the ISA (i.e. without a broker). Is this correct, or do I still need a broker? It may be that the situation has changed since 2014 when David wrote his initial post.

          At the moment, I don’t have a lump sum to invest, but my plan is to transfer a certain amount into the ISA every month (and then will it automatically invest in the fund I choose, or do I have to do it manually every time?)

          Can anyone in the UK shed some further light on this?

          Many thanks in advance!

          • DanThe Lion says

            Hi Emma,
            Thanks for this, it was very helpful.
            I’m transferring my ISA pots into the Vanguard ISA and choosing 100% VANGUARD (VEVE) FTSE DEVELOPED WORLD UCITS ETF as it seems to have the lowest fees according to Monevator.
            If I come across the answer to your query I’ll let you know.

    • Sik says

      Hey David,
      did you eventually managed to go directly with Vanguard?
      If so, could you give some tips on the process?

  5. John Smith says

    Amazing blog!

    Quick question, As a UK investor can I simply do as you do and say that all I need for my diversification needs is the S&P500 ETF. This has a TER of 0.09% whereas the world ETF is 0.25%.

    What are the risks? (People have spoken about currency) I am not interested in bonds mainly as at 25 this is money i have no need of now and will not be touching for 15 years(hopefully my retirement date), also I want the most growth and as a teacher I am lucky enough to also have a defined benefit pension which will cover my basic needs in retirement even if I lost everything I had contributed to stocks.

    Many thanks for any replies and for the excellent research. I have shown your website to my students, we have had some excellent discussions on money and how we need to make it work for us.

    Best wishes

    • Mrs EconoWiser says

      Hi John,

      I am not a fan of only investing in the S&P500, especially for non-U.S. citizens. You’d be investing in 500 American companies, and that’s that. J. recommends VTSAX, which diversifies his portfolio into investing in most publicly traded companies in the U.S. and that’s more than 3.000 of them.

      As we’re in Europe, I decided not to invest in American companies only. That’s why I love funds like the Vanguard Total World Stock ETF in dollars or the Vanguard All-World ETF in euros.

      It all depends on your world view, really.

      Hope this helps!

      • John Smith says

        Many thanks for the reply,

        I thought that VTSAX was 70% made up of the SP500. Does the extra 30% make a real difference?

        The cost issue is quite important as 0.25 is nearly 3x as expensive as the sp500 etf and as we know costs matter over time. Yet perhaps the extra diversity it provides is worth it?

        Best wishes

        • jlcollinsnh says

          Hi John…

          and welcome! Glad the blog(s) are helping you and your students.

          You are correct in that VTSAX is ~70% large cap = to the S&P500. It also slightly out performs the S&P500 over time due to the ~30 in mid-small caps where frequently stranger growth potential lies.

          You are also very correct to recognize the importance of fees.

          If I understand correctly, the world ETF has a TER .16 higher than the S&P500? If that’s the case the question becomes is the broader world coverage likely to outperform?

          That’s very tough to predict, but clearly the broader coverage provides more diversification.

          No easy or right/wrong answers here, but were it my money I’d likely go with with the world ETF.

          Good luck!

          • Mark S. says


            I’m struggling with what seems to be a conflict of your own views (i.e. I’m misunderstanding you.)

            In the shoes of a European you seem to value a World ETF even at a higher TER because it offers “broader world coverage”. And yet as an American you believe VTSAX offers sufficient diversification based on the exposure the large companies have around the world.

            That is causing me to struggle with my own decision. As a Brit I’m choosing “Vanguard U.S. Equity Index Fund” because it is almost identical to VTSAX and low TER. Putting currency risk aside and based on your entire blog, I would have assumed that would always be your preference regardless of where you live. Is that not the case?

          • jlcollinsnh says

            Hi Mark…

            I can see your point and the confusion comes from trying to tie together several different dynamics:

            1. While I don’t see the need to invest outside the US for the reasons described here – – as I say in that post I am also not strongly against it either.

            2. For investors outside the US, I can understand that investing entirely in a country not your own is a big leap; even as you recognize your country’s economy is too small or too industry focused to serve alone. So a world fund takes on an extra appeal.

            3. The world is changing and the time will come when the US market is no longer dominate enough to serve by itself. But my guess is this tipping point is still ~50 years out.

            4. But since we are trending in that direction, ~50 years out is only a guess and since I recommend a hold forever strategy, those who want to use a world fund won’t get much argument from me.

            5. But for now I hold exclusively VTSAX and VBTLX, and plan to do so for the decades to come.

            Interestingly, I just had this conversation with my daughter. My advice to her was #5, but watch the trend and maybe consider a switch when the tipping point comes and/or the ER of world funds becomes more competitive.

            Hope this helps clarify!

  6. SU says

    I’m an Australian, currently earning (but not living… it’s complicated) in the UK. I’ve spent several hours on this blog and love how straightforward the advice is – now I am trying to apply it and aaagh! I’m living in the Middle East so we’ll leave that part out of it; I’m just trying to choose between investing in the UK or Australia. Vanguard Australia offers retail managed funds starting at $5000 (, which is more manageable than the UK’s GBP100,000 threshold. The most obvious additional cost is the (relatively small) cost of repatriating the money to Australia initially, but having read Mrs EconoWiser’s warnings about ‘currency risk, costs, dividend leakage and broker bankruptcy risk ‘ heading to a stock exchange and tax system I am familiar with sounds like a bargain. I don’t need the money in the foreseeable future and in either case I would choose a Global equity fund. I have a property in Australia, with about 50% of the mortgage paid so I already have exposure to the Australian economy. My tax liabilities in both countries are currently minimal, and I’ll have about GBP 11,000 p.a. to invest. I’d be interested to hear others’ opinions about which country to base my investments in (and no, I don’t know which one I’ll end up living in long term – possibly neither of them).

    Secondly, if I did decide to keep the money in the UK, then is there any reason to choose Vanguard ETFs over any of the other low cost options mentioned in this article:


    • EconoWiser says

      Hi SU,

      Wow! That’s a very interesting situation! However, I feel that my knowledge is not extensive enough to help you out here.

      Any Australians and Brits around here to help out? Rob & David?

      • FIRE Aussies says

        We are also Australians & are not sure which Vanguard fund to choose, which is closest to VTSAX? We have pretty much read the whole blog now! We’d love some specific advice for Aussies.

        From the link from SU above, which we had already been looking at, it looks like we should choose the Vanguard Index International Shares Fund to match VTSAX is that correct?

        We hope to retire in 9 yrs @ 45, but are flexible with that, so a rough & wild ride is fine! We also have real estate investments and a paid off primary residence (these we had acquired before reading your blog…we may have made different decisions a few years ago if we’d had this to read, but are fortunate to fall into a particularly generous government incentive scheme on rental houses which probably puts us a little ahead!)

        Thanks JL for how much effort you put into this blog, we found our way via MMM. We have always saved a good bit of what we earn, now we are learning what to do with it!! Your time and advice is greatly appreciated!

        • EconoWiser says

          Well done you!

          I’d say something that imitates/comes close to/or is VT (Vanguard Total World Stock) would be your best option. About 50% in America, 20-25% Europe, 20-25% Australiasia (developed) and a tiny bit of emerging.

          • FIRE Aussies says

            Thanks for your reply!

            I have done some more research. I can buy VTI (ETF version of VTSAX) but I would need to buy through a share trading account through a brokerage. That means $15 per trade but no other account keeping fees. That will, obviously, increase my costs but as far as I an work out, in Australia we can’t deal directly with vanguard. Please correct me if I’m wrong anyone?

            If I am putting in $12k per year, $1k 12 times, $15 fee each time that is $180/$12,000 which adds to costs but not a huge percentage & the 0.05% vanguard fee is the lowest option here.

            I would appreciate any feedback.


          • EconoWiser says

            Here in Europe we’re stuck with the same problem. We can’t invest with Vanguard directly either…a VT transaction would amount to about the same transaction costs for me. However, I do feel that the TER fees are much more important to consider than transaction fees. Yes….fifteen dollars hurt….but a much higher TER will hurt even more!

          • SU says

            Westpac has an offer at the moment, if you feel like doing some paperwork in exchange for saving the $15 per transaction:

            BUT it’s not clear that you have to use a broker if you go with the managed fund rather than ETF:

            I think you should have a look at the FAQs about transacting with Vanguard. It sounds like you would be better off with a Retail Managed Fund, not an ETF. Within that, there’s an interesting decision to be made about whether you want to go 100% into the global fund, which has no Australian shares, or go partly global, partly ASX 300. Given the volatility of the exchange rate, my (not-at-all-researched) opinion is some Australian shares would be a good hedge.

  7. Sebastien says

    Thank you EconoWiser for this very good overview of the options for non-US investors.

    I am myself of Belgian origin, currently living and working in the Middle East. I have started reading MMM and jlcollinsh about a year ago and did my own research back then to apply the same strategy outside of the US.

    And I came (almost) to the same conclusions!
    I am currently investing through a discount broker in Vanguard UK FTSE All World ETF in US dollars. I also have a couple of global bonds ETF from iShare because it is not offered by Vanguard UK at the moment (only UK bonds).

    I am still working on my tax situation as I am not sure how things work between the the UAE and Ireland.

    The difference in my research is that I also looked at the estate tax in the US. If anything unfortunate happens to you while your money is over there (in case of death in fact), the US will tax on anything above 60,000 USD. (For US resident this limits jumps to 5.2 million!) I could not find the %age of the tax though.

    As in the long term I expect my stash to grow bigger than that, this issue added to the 30% on capital gains made me rule out investing on US stock exchanges. Trying to keep things simple!

    I am still not completely sure how all these tax issues work… so any comments and suggestions are very welcome!

    Well done and keep up the good work!

    • Kristof VB says

      Hi Sebastien,

      I’m from Belgium too. Learning about investing a couple of years after you… Are you still investing? Can you PM me?

  8. DB says

    I am posting this as you suggested 🙂

    Posted April 6, 2014 at 5:24 am | Permalink
    Dear mr. Collins,

    Thanks for this wonderful site – after discovering it a year ago my husband and I are debt free and currently building a F-You stash.
    I live in Denmark and have read all of your post regarding investing Europe. I found a website with very low fee’s: Nordnet. The problem is they don’t offer all the different options as vanguard but its a bit more accessible for danes. (since i have a really fun demanding job, I am willing to pay a bit more for less effort. :-))
    My questions is as follows. our investing is for all our extra cash (meaning that we are all ready saving for retirement, emergency funds etc). So we are not relying on this but just want to have extra for retirement and of course F-you money. The money will probably be invested for 15-20 yrs at least.
    We have our stocks in 80% spar invest global atier min risk. (meaning global stocks minimum risk) it focuses on stocks in MSCI World Minimum Volatility Index.
    20 % are in Index C20 capped. As you can tell I am not a professional stockbroker – are these informations enough for you to determine anything? I read an article at Johnnymoneyseed saying: just get started! figure it out as you go along, which is the strategy :-). My question is if this is enough of a spread or I need to get to vanguard to get more options.
    Hope you can help. Thanks again for your amazing site.

    Posted April 6, 2014 at 8:47 am | Permalink
    Welcome DB…

    Glad you are here and have found this site useful. Sounds like you are making great progress and I agree with my friend Johnny Moneyseed, getting started is important.

    I would urge you to post your comment/questions here:

    This will give my European readers a chance to hear about your find in Nordnet and they may have some thoghts on the two funds you’ve chosen. Unfortunately, I am not familiar with either.

    It sounds like you are on the right track with MSCI, assuming it is a low cost index fund investing in stock markets around the world including the USA. My guess is C20 is a world bond index fund? If so, this gives you an allocation of 80/20 which should serve you just fine.

    Held og lykke!

  9. Joel says

    Hi there,

    Jim, firstly I’d like to thank you for creating such a great blog. Being completely new to investing, I’ve found your beginners guide to stocks really thought provoking.

    As I’ve decided I really need to start investing in my future, I have a few questions I hope you and your readers will be able to help with.

    A little bit about me: I’m 30 years old, and from the UK. I currently have some savings sitting in a bank not doing much. Out of that I have £2,000 I want to start investing (not much I know). From now on, if I can afford it, I would like to continue to put £100-150 every month into the investment fund.

    Unfortunately as I’m from the UK, I can’t invest directly in Vanguard (being £98,000 short!) and so I’m weighing up the information in this great guest post to decide what to do.

    In this post Mrs EconoWiser seems to prefer EFT’s, although in another post Jim says “I tend to avoid ETFs (exchange traded funds) because with them you have the possibility of sales commissions and/or spreads to consider”. Also, in the comments Rob points out that with mutual funds there’s no withholding tax, and infers that mutual funds are easier to manage. So, as a UK newbie starting out should I go for a mutual fund or EFT?

    If I do go for an ISA and mutual fund (which allows an £11,800 investment per year), what fund should I invest in to replicate the VTSAX? In an earlier comment Mrs EconoWiser suggested “a great percentage of the SRI Global Stock Fund (developed world) combined with a small percentage of the Global Small-Cap Index fund and a small percentage of the Emerging Markets Stock Index Fund in order to replicate the Total World Stock ETF holdings”. If these are the best funds, how would I allocate £2,000?

    As far as brokers are concerned, checking out, it seems the best company for investments of less than £20,000 would be Cavendish and IWeb. I prefer IWeb as it looks like they would be a good company even with a larger portfolio.

    Lastly, Mrs EconoWiser talks about investing in Euros and Dollars, which to be honest, is something I’m completely unsure about.

    I’m aware that no-one can tell me exactly what to do, but seeing as this £2,000 is my F-You money (as Jim puts it!), I’m completely open to being steered in the right direction regarding the best broker, funds and currency to go for.

    I apologise if my questions appear naïve. I know I have a steep learning curve, but I’m really keen to start investing in my future.

    Thanks in advance,


    • jlcollinsnh says

      You are very welcome Joel…

      …and thank you for your kind words.

      My European readers are best equipped to answer most of your questions with a much deeper understanding of the issues in your part of the world. I’ll leave it to them and hope they weigh in.

      When reading my posts, be aware that I come at investing with a very American-centric perspective. One thing my international readers have taught me is that it ain’t the same “over there” wherever “there” happens to be. 🙂

      For instance, my preference for funds over ETFs is based on the cheap and easy availability of funds here in the USA. Were I in your part of the world, like Mrs. EW I’d likely be using ETFs. What matters are the two key principles:

      1. Don’t trade
      2. Look for the lowest expenses

      Finally, congrats on getting started. That’s the hard part. Your 2000 will grow just fine with regular feedings. If you get really lucky we’ll have another crash and your additional investments will be buying shares on sale!

      • Joel says

        Thanks Jim!

        While I’m certainly keen to hear others opinions, after my initial research it seems like the Vanguard Lifestrategy range may be a good place to get started.

        The only thing I’m not sure about though is whether to go for the Lifestrategy 80% or 100% equity. I noticed in an earlier post you said “As an aside, there are a few studies that indicate that a 80%/20%, stock/bond mix will actually outperform, very slightly, 100% stocks. It is also slightly less volatile. If you want to go that route and take on the slightly more complicated process, you’ll get no argument from me”.

        On the Monevator website they suggest lifestyling the investment by opening two Lifestrategy funds and re-allocating your contributions into the more bond heavy fund as you get older. So should I start with Lifestrategy 100 and then open another fund in a few years or stick stick with the Lifestrategy from the get-go?

        Thanks in advance,


        • jlcollinsnh says

          If you are willing to hold two funds, no big deal really, rather than two life strategy funds why not just hold a stock fund and a bond fund? Then you can adjust your allocation precisely as you wish, when you wish. In fact, that’s what I do, holding low cost total market funds, of course.

          You might also be interested in a conversation I had just last night with a friend. He was asking about Target Retirement Funds. This was my reply:

          I’m afraid I am unfamiliar with Mr. Piper (another blogger). But his advice to chose VASGX is certainly more traditionally in line with the common wisdom. That fund holds 80/20 stocks/bonds and includes international in that mix:

          1 Vanguard Total Stock Market Index Fund Investor Shares 55.9%
          2 Vanguard Total International Stock Index Fund Investor Shares 24.1%
          3 Vanguard Total Bond Market II Index Fund Investor Shares† 16.0%
          4 Vanguard Total International Bond Index Fund 4.0%
          Total — 100.0%
          Characteristics as of 04/30/2014

          VTSAX is the total US stock market index: 100% US stocks.

          Holding VTSAX is very aggressive. Recommending it as a sole holding, as I do, is very much an outlier concept. In fact I am aware of no other financial writer who does. So Mr. Piper definitely has the majority opinion on his side.

          Holding VASGX is also very aggressive at 80/20, but less so than VTSAX. Moreover, it will become steadily more conservative — adding more bonds — over the years. That’s the idea behind TRFs.

          That’s also why, along with it being a fund of funds, the ER is a bit higher. You are paying for that automatic rebalancing and the multiple fund diversification..

          It is certainly not a dumb choice.

          As you know, personally my preference is VTSAX. But I am Very aggressive in my investing and have proven my ability to stay the course during crashes. That’s absolutely critical, with either of these actually.

          Looking 20+ years out, VTSAX will very likely make you richer, unless we go the way of Japan. But the race will be close and your savings rate will be the more powerful element in the mix than your fund choice.

          Hope this helps!

          Here’s more on my take regarding TRFs:

          • Joel says

            Hey Jim,

            I was actually more distracted by your motorcycle link on that page! I’m a passionate biker myself, and it was only the other day I walked past a Triumph Scrambler wondering if it may be my next bike!

            Thanks for the info re TRF’s. They look interesting although I can’t see that Vanguard offer one here in the UK….?

            I’m not averse to holding two funds, although I would prefer to have one which rebalances itself (while I find my feet with investing) rather than doing all this myself with separate funds (as Mrs EconoWiser recommends).

            This is why I’m drawn to Lifestrategy initially. Would it be an idea to go for 100 Lifestrategy fund and then in a few years open a separate bond fund?

            Btw, here is a link to the Lifestrategy fund diversification. I think it has a reasonable spread (although correct me if I’m wrong!)…



          • jlcollinsnh says

            Hi Joel…

            I am unfamiliar with that fund, as I am with most. There are thousands of them, after all!

            So I can’t speak it is specifically. Perhaps one of my readers has some experience with it?

            LifeStrategy funds here in the USA typically have a bond component to them, but this one appears not to.

            If all stocks is what you are looking for it could work and, as you say, you can add bonds later as you chose.

            Not sure where you saw the Triumph, but I love mine. It doesn’t have particularly impressive specs, but I love the way it goes about its business for me. 🙂

        • theFIREstarter says

          Hi Joel,

          Fellow UK reader here, Monevator reader, and Lifestrategy fund (novice) investor.

          The key things for me with these funds are:

          Although their charges are slightly higher than making up your own allocation, you will get stung by dealing fee’s each time you buy / sell / rebalance if you are making up your own one. With a small portfolio (say, less than £20,000) the dealing fee’s of £5 or even £1.50 per trade can absolutely kill you, far more than the slight increases of the OCF/TER of 0.2% that you will be looking at, compared to the cost of doing it manually and picking more specific funds for each part of the asset allocation.

          The automatic rebalancing of these funds ,and taking out the need to make multiple purchases to get our asset allocation, is key, especially for the small time investors such as you and I.

          Also, let’s face it, it’s all a bit confusing, so keeping it simple with just one fund seems shrewd, until I learn a bit more about the whole darn thing.

          For the record I chose the 80/20 split but this is in no way an endorsement, I just thought it would be better than the 100% stocks. I have no real reasons behind this though 🙂

          Please do not take any of this as gospel but this is what I have found in my research on Monevator and other sites, and by using the investment platform I decided to use (AJ Bell/You Invest – again, not saying I have picked the best one here, but I am certain it’s not the worst which is something at least 🙂 )

          I also put £2,000 in as my first lump sum and recently got paid out my first lot of dividends, £30! Which was quite exciting!

          All the best and good luck with your investments in the future, it would be good to hear what you ended up doing as well!

          • Joel says

            @Jim: The Lifestrategy range in the UK allows you to select a equity/bond mix depending on your attitude to risk. As I’m slightly late to the game and don’t mind being aggressive, I think I’ll opt for 100% equity.

            I actually saw the scrambler in the UK. I’m also looking at the Thruxton as I’ve always fancied a cafe racer. I might actually be over in the US soon, so may see if I can get hold of something there.

            @theFIREstarter: Thanks for your advice. It’s nice to know that I’m sort of on the right track thinking about that fund. As I mentioned, I think I’ll go for 100% equity and add a bond fund in a few years when I need to preserve my honey pot!

            I’ll certainly look at AJ Bell/You Invest. How did you find out that this was a reasonable company in comparison to the rest? I couldn’t seem to see many indications on Monevator for the smaller investor. I was also checking out IWeb because of this page, mentioned by Rob in the previous comments:

            Anyway, it’ll be interesting compare our results with these funds.

            Thanks again!


          • theFIREstarter says

            Hi Joel,

            I actually opened the youinvest account because they looked the best value for smaller SIPPs, as detailed on that langcat website I do believe. However I have since not actually set up the SIPP and haven’t topped up the ISA for a while either due to moving house, so all spare cash is being piled into that right now! Once the dust settles on all of that, and I start investing again, I may well move platform. iWeb certainly does look like a good deal simply on the platform holding costs.

            You have to look at dealing costs as well though, figure out what you need to buy (which you have done), how often you will buy, then you can work out the total costs including dealing fees. Shouldn’t be too hard with yours/my simplified investing strategy. It must get awfully messy if you trade a lot though… which is another reason not to bother!

        • Sarah says

          Hi Joel, I’m wondering how you got on and what you went for? I’m in the exact same position as you, looking at Life Strategy 100% with £2000 as my first investment! One question though, have things changed from 2014, do we no longer need a broker? Can we buy them via Vanguard directly as I just went onto the Vanguard website and it seemed I could? Forgive me if this is total nonsense. This is all very new to me and I’ve zero background in this. Thanks

  10. Mark says

    Hi, thanks for the enlightening post.

    For the double taxation, the problem is, that the ETFs distribute the dividends, right? So, if I find an ETF that accumulates rather than distributes, I’d be golden (everything else equal). Do I get that correctly?

    Say, you take the Vanguard FTSE All-World UCITS ETF with an ER of 0.25%. Then, there is iShares MSCI ACWI UCITS ETF, which is an accumulating ETF and would then mitigate the problem. Though, the ER 0.60%. I have yet to look at other differences between the two ETFs. Assuming everything else is equal, which one would be more advantageous? (I know it will depend on the exact gains etc. because of the tax–but it’d love to hear an educated guess)

    Greetings from Germany!

    • jlcollinsnh says

      Welcome Mark…

      Thanks for joining from Germany!

      I’ll leave the answer for some of our other European readers. But I can tell you, here in the US, tax is due on any dividends your fund or ETF pays, regardless of whether you have them reinvested in additional shares or take them in cash.

      Because governments are all equally eager to tax us, my guess is it will be much the same in Germany. But that’s only my guess.


      • bb says

        Marc (and other germans) it is the same.
        Distributions are subject to income tax regardless of the type of distribution (eg. “Dividende” vs “Ausschüttungsgleiche Erträge”).
        If you have your holdings with an german located broker, the broker is forced to withold any tax distributions it can get hands on; that is either germany domiciled reinvesting funds or any distributing fund. If you have a accumulating fund that is not domiciled in germany (like many iShares) you have to declare the reinvestments in your Einkommensteuererklärung and thus pay tax on it. The caveat is, that once you sell those shares your germany located broker is forced to withold tax again – double taxation. In the Einkommensteuereklärung you can subtract those already taxed dividends from your taxable cost basis, effectively regaining the tax already paid in former years. This will lower your tax and should lead to a tax refund if the majority of income is capital based.
        As far as i understood, all the “proof” you will need should be statet in the “Steuerbescheinigung” of your broker for the year you selled already taxed shares. Maybe you also need to supply your tax statements for the years, but im unsure (and neither my broker nor my Finanzamt could clarify this!).

        If you have your money invested abroad (e.g. with “Vanguard germany” which is located in ireland…) you also have to declare taxes yourself. Vanguard should provide “Steuerbescheinigungen” for this purpose like your german broker.

        This is one of the main reasons i mostly invest with distributing funds with iShares for the moment. This way, i can buy foreign funds but have the majority of the taxable dividends cashed out through my broker; this has the advantage that i can reinvest the dividends according to my asset allocation (nad am not forced to reinvest in the source fund) as well as that my broker handles most of my tax issues.
        My only rpoblem at “selling time” will be what was not distributed but reinvested (iShares does sometimes create “ausschüttungsgleiche Erträge” in their distributing funds, but thats only a fraction of all distributions.) i hope i will be able to claim the already paid tax on this back some years in the future…
        So far i was not able to get any report how this exactly works and what statements must be supplied to german tax authorities.

        • Peter says

          Depending on the county that you are living in:
          1/ you might not be taxed on the dividends that are reinvested
          2/ you might not be taxed on the capital gains of a funds

          Either or both would improve your return for those countries

  11. LyckligaFiskaren says

    Thank you for some really useful info! I live in Sweden and have been thinking alot about etf investing. One problem is that either Avanza nor Nordnet (swedish brokers) seem to offer europe domicile vanguard etf’s. We need to buy in usd. Why is that?

    For example, non of them has Vanguard FTSE All-World UCITS ETF.

    They do however offer both VTI and VXUS. And that is what worries me. Me, like Sebastien who commented on this post on March 25, 2014 and recieved no answer, are worried about the estate tax in the U.S. I’ll quote Sebastien;

    “The difference in my research is that I also looked at the estate tax in the US. If anything unfortunate happens to you while your money is over there (in case of death in fact), the US will tax on anything above 60,000 USD. (For US resident this limits jumps to 5.2 million!) I could not find the %age of the tax though.”

    Can someone provide more info on this? If this is the case, then noone living in Europe, for sure not me, should invest in Vanguard with dollars.

    US/Sweden has no ‘death tax convention’, so if you want to buy vanguard in dollars, just dont die!

    • Sebastien says

      Hi LyckligaFiskaren,

      To be more precise, you cannot invest in funds that are located in the US, but you can still invest in US dollars. That’s what I do, I invest in VWRD in London in USD. You need to choose your broker based on the funds you want to invest in (and on their brokerage fees). There are some options in Luxembourg and Danemark that are open to foreign investors. Look it up!

      Note that some people (with no kids for example) still do invest directly in the US despite the estate tax.


  12. Wanja says

    I’m a Belgian student and would like to share with you my simple investment strategy:

    100% iShares Core MSCI World UCITS ETF (EUR) | IWDA (TER of 0.20)

    This is an accumulating fund which means that no Belgian tax will be witheld on dividends, so basically I won’t have to pay any taxes whatsoever. I buy the ETF for free through the budget broker DeGiro.

  13. RD Portfolio says

    Thanks a lot to JL and EconoWiser,

    I have been looking for Vanguard ISIN codes all over the place. The simplest thing is simply to call Vanguard. I called them yesterda, spoke to an actual person and sent her an email. Within an hour I had all the ISIN codes I asked for.

    This morning, I called my bank to place some orders but it seems that the issue is that Vanguard nhas simply not registered the biug majority of its ETFs with the Dutch financial authorities, so the ball is in Vanguard’s yard. As soon as they register, we can buy.

    I have asked my contact person at Vanguard in NY and will upadte on any changes.
    It might be bpossible to buy from local brokers anyway apparently, but they would be acting against regulations so probably not entities you would want to place your money with anyway.
    Updates coming soon.

    I am currently trying to build an investment portfolio based on Ray Dalio’s recommendation but not having his scope of funds, instead of investing directly in products, I decided to buy funds that cover these allocations. For anyone interested in learning a lot more, I recommend reading Tony Robbins Money: Master The Game. You don’t need to be a Tony Robbins fan to benefit from the great information there. The book is non profit, all proceeds go to feeding hungry people around the world. Mr. Robbins is already very well off and as many Americans in his status, pursues a lot of charity work (not to mention that this book will probably b\ring even more people to his seminars).
    Regardless, the book is recommended. I learned a lot. It has actual practical information on what to do and how to do it, all about investing.
    Even if you aren’t nbew to the investment world as I am, I believe it will add a lot.

    Keep having fun!

    • jlcollinsnh says

      Hi RD…

      While I haven’t read the Robbins book, I have been hearing mixed reviews that lead me to suggest caution in accepting it all as gospel.

      For instance, Kathryn Cicoletti is a financial pro and someone whose irreverent views I’ve grown to respect. She is “kindly calling bs on most of what Tony Robbins says”:

      In that piece she says the hedge fund manager’s secret sauce is
      The All Weather Portfolio that looks like this:

      Stocks: 30%
      Bonds: 55%
      Commodities: 15%

      Anyone who has read thru my stock series (button at the top of this page) won’t be surprised that this strikes me as terrible advice.

      • RD Portfolio says

        Hi JL,
        I read Kathryn’s comments. Whereas I get the impression from reading her comments that I am personally less of a Tony Robbins fan than she is in general, in this instance it seems to me she comments with partial information as she writes herself.
        I do not want to give too much information from the book as I don’t want to infringe on any copyrights, but the above is a simplification of the Ray Dalio All Seasons Portfolio and RD is quoted himself several times as saying that he may be wrong. TR also repeatedly writes that past performance is no guaranty, so reading the book is the better way to make decisions about using the contents.
        Back Testing was reportedly done for 70 years as well as for 30 years and came with similar results.
        I personally do not intend to following Tony’s “7 Steps Plan to Freedom”, but I take many good things from the book. Thanks to this book I found out about Vanguard and from that search got to your blog (great info by the way!).
        The book is endorsed by the likes of Carl Icahn, Steve Forbes and others, and that was what convinced me to buy and read it completely.
        The book is in my opinion not to be followed to the letter, but it has a lot of usefull information if you would like to see yourself as an investor and not a day trader or speculator. It is up to each reader to sort out what is relevant for herself or himself obviously.
        To me it was a great help. After reading Capital in the 21st Century, it became clear that if you are not one of the lucky ones, you need to join the investing “class” to make money. It does not seem to come from work regretably.

        So folks, if you decide to buy the book, help JL and click the link. If any one else has read it and can give any sort of usefull comments for or against, that would great to read here.

    • Micks says

      They do: IE0007471695. Which is also shown on your link from Vanguard, though it holds no corporate bonds (for me no problem since I take on enough risk in the equity portion of my portfolio). In my opinion, bonds are for safety in your portfolio, and since I am Euro-based and a big portion of international bonds’ volatility is coming from other currencies I prefer to buy European bonds.

      As for EU domiciled ETFs, do not limit yourself to Vanguard. Yes they are a great company, but for Europeans, accumulating funds from for instance iShares or DB-x are often much better suited to their needs. For us Dutch, I do not see why you should not invest in US-based ETFs by the way.

      • RD Portfolio says

        Hi Micks,

        This one has a 100.000$ minimum. Out of my league….
        On iShare I could only fin d EURO bond EFTs. Can you help with info or a link where I can find any bond ETFs for US government bonds? Like you, I have enough risk elsewhere.

        • Micks says

          Yes you are right, for me as well out of my league. For me US bonds do not fit into my portfolio though due to currency risk (I spend and earn in Euros). You could search on Morningstar or on the EU section of for European domiciled ETFs.

  14. Daniel Perez says

    I’m a Spanish citizen living in Switzerland at the moment.
    I’ve read your blog post and it’s very interesting and enlightening
    I wanted to know if you have any particular recommendation in order to take a look at vanguard funds/ETFs
    I would like to do some long term investments, where I can pour some money in monthly, without incurring in high fees. I thought that ETFs are not very good for this, since they trade as stocks and usually have fees for each transaction, whereas funds may have smaller fees in this case
    Is what I’m saying right? What’s the best approach in my case?
    thanks a lot!

  15. Rosalind says

    Hi everyone, thanks for all this mine of information. I’m a complete novice here, based in the UK, arrived here via Jeremy at go curry cracker, about to dip my toe in the water after a lifetime of thinking investing isn’t for me….

    So just a quick question for starters, when I look at the vanguard FTSE all world UCITS ETF for example, to buy on Hargreaves Lansdown where I’ve set up an account, I’m offered two options: one is accumulation, the other is income. Am I right in assuming that all the advice here on Jcollins is based on buying accumulations for maximizing growth? Would seem logical but as I say, forgive the complete novice about to throw £5000 in the pot!

    Thank you

    Rosalind Arden

    • Marco says

      Where do you see accumulation for VWRL on hargreaves lansdowne? I don’t see this option. There is only VWRL which pays a quarterly dividend?

      There is no difference between reinvesting dividends yourself and the ETF doing it for you.

      Outside of an ISA it is best to have your dividends distributed otherwise your tax return gets more complicated to work out.

      • Povilas says


        the difference is in the fees, which the person needs to pay when reinvesting dividends. Plus the time needed to do it.

        Also, if you get 100£ dividends quaterly, you can’t reinvest them easily, it’s too small amount. For example, iWeb takes 5£ per trade. So, if I invest those 100£ every quarter I’m paying 5% of the sum, just to invest. So, it will take nearly a year to just cover that fee.

        Marco, I’m not sure what you mean about distributing dividends outside of the ISA. Could you elaborate?

        Also, I believe that it’s better to get dividends in ISA, as in that case you don’t need to report them and pay additional taxes (after you get to higher tax bracket).

  16. John fortune says

    Hi Mrs Econowiser,

    Thanks for the great info. How can one emulate the three fund portfolio from Europe? This involves investing in the Total Stock Market, Total International, and Total Bond Market.

    Does the Vanguard FTSE All-World ETF emulate this? If not, what are the advantages and disadvantages?

  17. Stephanie says

    Unfortunately where I live does not offer a lot of choice when it comes to online brokers. The one that offers the best deal charges a flat rate of US20 for each transaction and an annual administration fee of US30. I’m not so sure if it’s worth it. What’s your take? I’d love to know what you think. Thanks!

    • Povilas Panavas says

      Hi, Stephanie,

      I have quite a similar situation with my Lithuanian account. Where a flat fee is 23.17€ and administration is percentage (at the moment around 15€/year from ~16 000€ investment).

      To make it work, you just need bigger lump sums. My thumb of rule is that flat fee must be not more than 0,5% percent of investment.

      So, if your fee is 20$, you must invest per time at least 4000$.

      That’s at least what I do, I invest at least 4 634€.

      The good news is that if annual fee in your case is also flat, then after a few investments those 30$ will mean nothing.

      Good luck investing.

  18. Michele says

    Hi, very good article!
    I don’t know if you’ve already answered but I’d like to know any idea about investing in bonds for Europeans… any suggestion?


  19. Ian says

    Hello to jlcollinsnh and Mrs. EconoWiser,

    I’ve been reading up on the blog for a few weeks now, and I must first say thank you to jlcollinsnh for making investing clear and entertaining.

    I write, beacause I’m in a bit of an odd situation, and I’m hoping one of the two of you, or another reader, could help me out:

    I’m a dual citizen with the United States & Ireland, but I live in Berlin and pay German taxes. I’m looking to invest in VTSAX and have to believe that, as an American citizen, I am able to simple open a US bank account (closed it years back), and open up an account with Vanguard. That said, I’m wary of the tax implications of doing so. The United States is the only large western country that requires its citizens to file income tax forms when they live abroad — i.e. I have to file and pay in Germany, but also have to file (and pay, if I go above a certain US-set threshold) in the United States.

    Question 1: if I put, say 10k into VTSAX, and the fund growns 4% in a year, do I pay taxes on that 4% in the USA?

    As far as I understand, the US doesn’t tax investments until the investor takes the money out of the market — taxed at the end, so to say. Is that correct? In Germany, capital gains are taxed annually.

    So, Question 2: If I pay capital gains taxes in Germany on the 4% earned on the 10k, do you think I will be taxed AGAIN in the USA, when I pull the money out 30 years down the line — even if I have been paying taxes in Germany every year?

    Sorry, this is a super specific question, but any answers would be so helpful.


    • jlcollinsnh says

      Hi Ian…

      I can tell you that when you own a mutual fund like VTSAX, the US taxes any dividends and capital gain distributions (GCDs are rare with VTSAX) in the year they are paid. You’ll receive a tax document from Vanguard showing these and you’ll report them on your tax return for that year.

      Capital gains (and loses) are only reported when you sell shares and in tax owed is due in the year you sell.

      As for the rest, I’m afraid that’s above my pay grade. 🙂

  20. seano-nz says

    Hi readers, just re-posting this comment on the advise of Jim, looking for anyone from NZ that is following this investment that has got a handle on fees and taxes and how to hopefully make them as low cost as possible.

    Hi Jim

    I’ve recently come across your website, what a find it has been! Such an amazing series!!!! I’ve been doing a bit of research into investing in Vanguard from NZ which is where I live. Unfortunately its not cheap. I have one option where I can invest in the ETF through my US brokerage account or another one through a local investment company that offer the vanguard funds which I can directly save with at no cost (brokerage and international funds transfer fees).

    Unfortunately they are not cheap….

    The local managed funds company which allows New Zealanders to invest in some of the Vanguard funds charge from 0.3%-0.5% management fee in addition to the typical Vanguard fee.

    If I use my US brokerage account, I will be subject to expensive brokerage fees and overseas bank transfer fees so using this method I would have to invest my savings 1-2 times a year until I build up my holdings in an ETF to keep costs down. Then I can invest more regularly as my effective costs will go down as I build a larger position in the funds in the years ahead.

    Next problem is taxation…

    I will pay 15% tax on the dividends I receive from the funds which is okay. I also have to pay a foreign investment fund* (*FIF) tax (NZ tax for investing in overseas markets).

    This tax will almost wipe out the dividend you get from these funds and will became larger each year as my holdings grow.

    For example if I have $100,000 in the VTI and it makes a gain that year, in addition to the 15% dividend tax I will have to pay the foreign investment tax of $1400.

    As you know VTI pays a roughly 2% dividend.

    $100,000 investment
    $2,000 dividend income
    -$300 dividend tax (less)
    -$1,400 foreign investment tax (less)
    $600 after tax dividend payment

    This is a lousy 0.6% effective dividend after taxes.

    This foreign tax grows as my holding grows and I have projected out 10 years. My effective dividend after taxes is down to about 0.4% as that foreign tax portion grows.

    One more example to show how bad this tax is:

    $500,000 investment
    $10,000 dividend income (2% on $500k)
    -$1500 dividend tax (less)
    -$7000 foreign investment tax (less)
    $1500 dividend after tax
    0.3% effective dividend after taxation and fees

    Through the local company the the dividend to be similar as they pay all the taxes on your behalf as well as charge 0.3%-0.5% in a management fee. So instead of getting a nice 2% dividend you only get around 0.5% or so.

    I don’t think I can defer these taxes and they have to be paid each year. What are your thoughts on this situation and how do I factor in these costs for working out a potential FI date?

    Hoping you can give me some pointers on this situation. Or, do you know anyone on this side of the world investing at a low cost? I have joined the bogleheads forum where a few New Zealanders post but haven’t got a definitive answer on the best way to reduce the costs of this method living here or how much havoc this wrecks on your investments.


  21. Sean-ireland says

    Hi there,

    Really enjoyed scanning through your site as I am trying to do the impossible, invest with Vanguard while living in Ireland. Yes, despite what has been said in various posts throughout, the ordinary investor here finds it very hard to do what even our European friends find easy and our American friends find simple – investing in a reliable fund that doesn’t try to rip us off.

    While the likes of Vanguard and iShares are domiciled here for tax purposes, we cannot actually buy their funds here directly (they don’t even have a website for Ireland!) and have to either pay crazy commissions to Irish brokers that mean we would lose about 25% of our investment over time, or take the risk with new players to the market like deGiro, which still don’t inspire me with confidence yet despite their low fees.

    If we buy investment funds or ETF’s domiciled in Ireland or the EU we pay 41% capital gains tax on disposal and on dividends with no loss relief. Curiously if we buy US domiciled ETFs and funds, then we pay 33% CGT with the first €1270 exempt and dividends are taxed as income at our marginal tax rate of 20/40%. So you can see why buying ETFs and funds is a little bit complicated this side of the pond.

    There also seems to be some confusion with withholding tax regarding US funds and dividends. The US itself charges 30% for all investors who are not domiciled in the US, but by filling out US form W-8BEN every three years they reduce it down to 15%. Ireland doesn’t keep the 15% as seems to be the opinion expressed by various posts. If your country hasn’t enabled a double taxation agreement with the US then you need to get on to your elected representatives.

    Really enjoyed looking around your site – if you happen to come across a Bogel or Solin who is willing to write a book about smart passive investing aimed at Europeans, tell them there is a surefire market waiting for it!

    • Diarmaid McGee says

      Hi Sean!

      Almost 4 years on from your post… I am really curious as to how you got on in the end up and what you decided was the best thing to do?

      I am now in the position you were in, April of 4 years ago.
      I am Irish, living in Ireland, no exists, I want to start investing (even if very small amounts to begin with).

      Thank You so much Sean for any helpful advice and guidance you might have to offer!

      Take Care,

        • Diarmaid McGee says


          I’ve put out some feelers on different blogs and contacted a few people so when I hear back i will be sure to let you know what they say!

          I could be totally wrong but does it seem like if we invest in Vanguard here in Ireland using a broker (not sure who, possible DeGiro???) then the benefits of investing into a low cost index fund like Vanguard’s VTSAX are negated by the broker’s fees and taxes payable?

          Do I have this wrong? What does it seem like to you Darren?

  22. Patrick says


    Thanks for all your work that you put into this blog. It’s a great series and opened my eyes and probably every others visitors too. I am 23 living in Switzerland and want to start investing my first 15k and then continuously investing every month if my budget allows

    I am interested of an ETF. My Question is, is this one a good choice or would I make a mistake going with this one?

    iShares MSCI World Minimum Volatility UCITS ETF

    TER 0,3% with 9.- for every transaction. My taxation situation is something I have to find out more about.

    Other ETF’s available. iShares MSCI World UCITS ETF, Vanguard Total World (VWRL).

    Thanks, Patrick

    • jlcollinsnh says

      Beats me, Patrick. 🙂

      Unfortunately I am unfamiliar with that fund.

      But I’ll bet some of my ace readers here have some insights….

  23. jan says

    Your comment is awaiting moderation.

    Hope mrs EW can still answer this one…
    I too live under the Dutch tax burden. My bad.
    Let me thank you for this great article first. And then pose my question(s):

    Maybe I got it wrong but it seems that we can buy VWRL in Euros through NYSE Euronext. But the underlying assets would still be in USD. So I do not see how that would reduce currency risk (vs buying the fund’s sister in USD directly). Am I correct or am I overlooking something?

    Second question is the tax thing: Very nice that Dutch citizen are entitled to the 15% US dvd tax , iso 30%. But how would this work? I cannot see how an ETF would know that it has a Dutch holder…

  24. Przemek says

    This is my first comment, so big words of praise to JLCollins for this wonderful blog, and to Mrs Econowiser for this post.

    Mike and Lauren brought me here. Since then I am patiently reading through the Stock Series from Part I. I was hoping this article could clarify how can I invest in Europe, but I still have some questions.

    I am a 30 y.o. Polish living in Switzerland. Currently I have 100 000 CHF/EUR just lying on the bank account. My plan is to accumulate 600 000 ideally before 40 and to move to a lower cost country (Poland or Spain).

    So my questions are:
    1. On the website I can see that the minimum initial investment for Investor is 100 000 CHF/EUR, not 500 000?
    2. You write that in ETF’s I can invest by a broker, but what about funds? What If I have the required minimum and want to buy a fund? Can I buy direct by Vanguard?
    3. I’ve done some googling for a Swiss Broker and found Corner Trader. They charge 0.2% for deposit and have no custody fees. Is this fair?
    4. How do I handle Tax? In Switzerland there is a withholding tax of 35%. If my dividends get reinvested, do I pay tax on them, or do I only pay tax at the end, when I withdraw?
    5. In Switzerland there is a “third pillar for retirement”, where you can put in up to 6700 CHF tax-free money per year. But where do I put my money so that it’s treated as “third pillar”?
    6. As I do not plan to spend my retirement in Switzerland, in which currency should I hold my money: CHF/EUR/PLN? Also, is investing in US-based companies not too risky for Europeans? I don’t want to be an implicit Forex speculator.
    7. For USA, VTSAX has 0.05% custody fee. For Europe, index funds have 0.30%, All-World ETF 0.25%, S&P500 0.07%. Should we not go for the S&P, or can the World overperform it by more than 0.20% each year?

    Thanks in advance for any help.

    • Povilas says

      6. Currency totally doesn’t matter as long as you invest globally, preferably world index. The concrete example would be Vanguard VWRL. The morning of the Brexit, it fall 4% in dollar value. However, in my account (I live in UK) the same stock expressed in pounds gained value of 4%. How has it happened? Because pound fell 8% compared to dollar.

      It means that as long as your money are invested, you don’t have currency risk. If pound drops, you sell your stocks for more pounds. If pounds get stronger, your stocks get cheaper, but when you exchange it to euros or dollars, you get more of that currency.

      • Przemek says

        Hi Povilas. Thanks for your reply. I am flexible as to where I will be living in 10 years (it should be warm, peaceful and cheap), so I guess what you’re saying makes a lot of sense.

        I was just considering buying VUSA instead of VWRL, because it has been performing better in the long run, and because it has a 0.07% fee, compared to 0.25%.

        On a side note, if the performance of an index so strongly depends on the reporting currency, is there a more agnostic way to measure it? Instead of USD, CHF, EUR, GBP, a more independent measure. I mean, after Brexit VWRL may go up in GBP, but down in CHF, it strongly reflects the condition of the currency. Is there a way to represent the index value in a mix of currencies or something, that has a fairly constant value all over the world?

        • Povilas says

          After Brexit I will not invest in a single country market ever. Even if it’s the biggest (VUSA).

          I didn’t believe Brexit will happen as most of the people. So, I had some FTSE100 index funds. They were undervalued and paying really good dividends. Experienced some losses on Brexit’s morning while changing it to VWRL.

          Probably exactly the same story is with Trump. I mean if he wins, you better off having VWRL, even if 50% of it consists of USA. But this would be so big that all the markets would be down anyway… And means to protect your assets probably wouldn’t be stocks in this particular case.

          But I’m no expert and it’s my personal experience. My current portfolio value 86 000£.

          As for a fair performance of a stock (not dependent on the currency) I don’t know such a way.

          However, you usually can see the same stock in several currencies.

          Finally, as I wrote before, currency won’t matter. But yes, it makes harder to properly evaluate and compare a performance of index funds.

          • Przemek says

            First of all, congratulations on your savings! It took me 5 years to collect what I have, starting from 0 at age 25. But all this is from a salary, these will be my first steps in investing.

            Now, secondly, that’s a fair point with Trump. Although it’s debatable if he will be a good or bad president, I think the public opinion may have a short-term effect on the condition of the dollar. I think VUSA is a special case, because it is so big an so international. It may seem to be more reasonable to invest in VWRL, but it’s performance looks less convincing and more volatile than VUSA.

            Thirdly, yes, that was my goal, to properly evaluate an index, not having to deal with the currency. By the way, do you know in what units are the popular indexes like S&P500, FTSE All World and MSCI All World kept? I don’t mean the ETF’s that follow them, but the indexes themselves.

          • Mr FOB says

            I fully agree to bet on the world market instead of US only for risk reasons. VWRL exists for less than 5 years, but the benchmark VWRL is following has a 5 year annualized return of 8.4%. If you combine VTI and VXUS in a ratio 50/50, you also nicely cover the world market (US represents 50% of world market (VTI), the non US countries make up the remaining 50% (VXUS). They have a 5 year annualized return of 14.7%. VTI and VXUS are very large (several hundreds of billion dollars per fund), while VWRL is much smaller (less than 1 billion dollar size). This makes VTI/VXUS much more efficiently (lower tracking error), although I am not sure whether that fully explains the much better performance than VWRL.

        • Povilas says

          Probably we reached the maximum nested comment level as I cannot click reply to your latest one.

          Thanks. I’m 29 and 92% of it is my salary 😉 Living in UK for a bit less than 3 years and that’s where my real saving started as salary in Lithuania was 500£ a month.

          You are doing a good job too. I believe you have the minimum 100 000€ to invest directly with Vanguard, which is awesome!

          As for investing, I started long time ago but sadly started by picking individual stocks, later picking dividend stocks. Only two years ago dived into index funds, got rid of all the individual stocks.

          Anyway, getting back to your question. Sorry, I don’t know the answers, but could speculate that at least S&P500 must be valued in dollars as stocks in that index are traded solely in dollars.

          • Przemek says

            I see we share a similar path to wealth :). I worked 4 years full time in Poland, earning 500 EUR with my first job, and 2000 EUR as I was leaving the country. In this time I saved 40 000 EUR. And in 14 months in Switzerland I saved 60 000 :).

            Do you know how I can invest directly with Vanguard? Their Swiss website is a joke, it looks very old and there is almost no information there. Based on the website alone I would never put my money there. Actually iShares (Blackrock) and Source have more professional websites and lower expense ratios.

            Do you know what is the advantage of investing directly? Is it that you don’t have to pay the broker? I found a broker in Switzerland that only charges 0.12% for each transaction and there is no custody fee. Then I can buy an ETF, which has a lower expense ratio.

        • Povilas says

          That’s a nice achievement! 100 00€ is quite an amount, especially in under 6 years 😉

          I don’t have experience investing directly with Vanguard as I started when I had little money. Plus using tax sheltered account ISA whenever I can. So, I have little money to invest directly.

          I would have guessed that the main problem is to find a cheap broker (depends on the country). But these days there are coming better and better ones. I use a broker with a fixed fee of 5£. And I rarely make deals bigger than 5000£. I invest in smaller chunks and more often.

          Having said that, your 0,12% fee sounds good to me, better than mine. From 5000€ it would be only 6£, but when I invest 2000 I pay 5, and you would pay only 2.4.

          And even from 100 000£ it’s just 120£, which is still good.

          It’s very important there would be no custody fee as from the amounts of money we are going to use there even a small fee would eat up a lot of our capital.

          • Przemek says

            The full rules of the broker I found are: 0.12%, but Minimum 18 CHF. So it’s most efficient at 15 000 CHF and up. And that’s OK for me. It means I can just make a purchase once every 3-4 months.

    • Sik says

      Hi Przemek!
      Did you eventually manage to get somehow an answer to all your questions? If yes it would be great if you could make a recap since I have basically all the same questions 🙂 Thanks a lot!

    • Arthur Wilhelm says

      Hi Przemek,

      I am from Poland and living in Switzerland too.
      Did you get your answers already? Or how did you proceed from 2016? I’d like to exchange with you on the topic
      Would be great hearing from you. cheers

      • Alcides says

        I am working in Switzerland and interested in the topic also. Could we discuss about it? Were the initial questions answered?
        Best regards

  25. Malachi Rempen says

    Hello wise investment druids,

    I’m in Germany and trying to figure this whole thing out, so bear with me! Any answers are much appreciated.

    I found an investment management company called iShares which in Europe (and the US?) seems to be a competitor of Vanguard. They appear to take the same dim view of actively managed funds as Vanguard does, which is nice, and offer a lot of the same ETFs (the great-looking S&P500 at 0.05%, for example). The only downside seems to be that they’re shareholder-owned, rather than owned by the investors themselves like Vanguard, so they’re motivated differently. I can’t figure out where their European branch is domiciled, though.

    So my first question is: would investing through iShares relieve me of the Vanguard Irish double-taxation tomfoolery?

    Second, I’m trying to find an appropriate broker in Germany (iShares also requires you go through a bank or broker to buy with them), and having a hell of a time. Maybe a German could chime in and help me out here. I thought an online broker would be best, since phone calls and in-person meetings are so last millennium, so I looked up comparisons on multiple sites like,, and others. This led me to a top five online brokers jostling for supremacy, each with their own offer of low costs. However, they each also have their own frustrating retinue of hidden fees and costs and other miseries. Other commenters on other sites recommended going through a local broker or bank, since you can walk in if you have any issues or need advice, but some of the prices seem outrageous. Really, I have to pay €10-€20 plus percentages plus other fees every time I want to invest money in my fund?

    Am I understanding this whole thing completely wrong, or is there a better way? What do other Germans / similarly-situated Europeans do?

    Thanks guys! May the winds of fortune blow liberally in your direction.

    • Miriam says

      Hi Malachi Rempen,

      same situation here, I’m from Germany and just starting to look into investing in ETFs. I found this great website, where you can research ETFs, and also research online brokers that offer special deals with ishares-ETFs:

      On the left, click “Aktions-ETFs/Aktionsangebote” or “Sparplanfähige ETFs/Sparplan-Aktionen”. You can sort by TER, choose if you want ETFs that reinvest or pay dividends, and also compare the ETFs you pick in detail (button “Auswahl”/Detailvergleich on the top right).

      I have been using the online broker Flatex for 4 years now to keep shares I inherited. For ETFs, as far as I see, they have a flat fee of 5,90 € to buy them, no management cost, and if you choose an ETF “on offer (Sparplan-Aktion)”, you will not pay a fee for a certain monthly savings rate you choose (Sparplan).

      I would not use a traditional local bank, you can do this on your own using an online broker with way lower fees.

      I’m thinking about a portfolio like this:
      50 % S&P 500, TER 0,07 % (IE00B5BMR087)
      20 % Europe 600, TER 0,2 % (DE0002635307)
      10 % DAX 50, TER 0,16 % (DE0005933931)
      10 % Japan, TER 0,2 % (IE00B4L5YX21)
      10 % Pacific without Japan, TER 0,2 % (IE00B52MJY50)

      Something like a World-ETF, but less emphasis on the US and the UK, more on Germany and Europe because of the currency. And using the low fees on the S&P 500.

      I’m finding the tax laws for foreign ETFs confusing (apparently, ishares is in Ireland). Apparently you will pay tax in Ireland on dividends, whether reivested or not (Quellensteuer), and again in Germany (Abgeltungssteuer) if you sell them. So you have to keep all tax reports and put the foreign tax paid in your tax declaration to get it back (or parts of it anyway, still trying to figure this out), or you will end up paying tax twice, really.


      • Johannes says

        Hi Miriam,

        any updates regarding the exact tax regulations?

        Also, doesn’t your portfolio lack emerging market stock?


        • Miriam says

          Hey Johannes,

          sorry for the late reply, I was moving flats (and cities)! I’ve decided to go with ETFs either from Ireland or Germany, because I will have to request the taxes I have to pay in Ireland (or any other non-German ETF) back. My broker (Flatex) does not offer this service, so I will have to do this myself next year when I do my taxes, I asked them.

          I enjoy managing my finances, but realistically, as soon as I’m working fulltime again, I’ll not be able to spend massive amounts of time on my finances and tax laws. This was also my reason to pursue ETFs: Buy them and forget (mostly) about them.

          Regarding your other question: At the moment, I feel like I don’t understand emerging markets or the reasons for investing in them well enough to decide whether I would like them in my portfolio. This is can of course be solved by more research, so thanks for the suggestion, I’ll look into it!


  26. MAURIN says

    Hello jlcollinsnh,
    I would like to thank you for your very interesting blog.
    I am French and live in France.
    I am 36 and my retirement is expected in 22 years minimum.
    Our distribution pension system explain most french people are not saving for retirement and this is, I think, one of the first reason why french people do not invest in the stock market. Most of them think stock market is for rich.
    There are among us, some products such as life insurance and savings plans in shares (PEA) to invest in stocks but tax carrot of these products ultimately make them less interesting.
    Therefore, I agree with actively managed stock funds for 2 years. However, even if I chose quality managers (SKAGEN Kon-Tiki, Bestinver International, Jupiter European Growth …), I found that index funds were long term are of more benefit.
    Not having the chance to subscribe to funds such as VTSAX, so I decided just a few months, invest periodically in VTI and VXUS. The funds I have in the portfolio will be sold and reinvested in these two ETFs.
    Dividends will be obtained initially reinvested in these ETFs. Then approaching retirement age, I will buy BND and BNDX so as to have, at the end of the plan the following portfolio:
    37.5%: VTI
    37.5%: VXUS
    10%: BND
    10%: BNDX
    5%: Cash

    • Martin says

      Hi Jerome, my daughter is French and living in France. I want to help her invest in index funds in a tax efficient way. What would you suggest as a good staring place?

  27. AAA says

    First, thank you very much for this life-changing blog! For a long time I didn’t know what/how to invest my hard earned money.

    Second, my situation is a bit complicated but I am hoping you/someone can shed some light. I read through all the comments, and I cant seem to find a scenario close enough to mine.
    I am 29, a US resident that already has a US vanguard account (thanks to this blog), investing in 100% VTSAX in a vanguard brokerage and also 100% VTSAX in a Roth IRA. (I also have a 401k, unfortunately not a vanguard, but A John Hancock. 500 index fund.)
    However my current job position is moving me to Italy, and I was informed by HR that once all the Italian paperwork goes through (another few months), that I would no longer have $ deposited to my 401k, no longer be paid in USD to my US bank account, but I would be paid in Euros, to my Italian bank (that will be opened up shortly).

    My question is 2 fold:
    1. as a US expat, that already has a current vanguard account, can I still continue to deposit money, with the Italian bank account? Or would I have to transfer the money back to my US account (loss of $$ in wire/transfer fees), and deposit that way?
    I will still keep my US bank account/address etc..

    2. regarding the 401k, should I max out my contribution before the switch over in a few months (ie 1/2 of my paychecks for the next few months), or should I just let it go, and use the money that I would have invested in the 401k, into my current vanguard brokerage account?

    Any other recommendations?

    Thanks a bunch!


    • jlcollinsnh says

      Hi AAA…

      Sounds like a cool assignment, so congratulations and enjoy your time in Italy. Seems like a great place to live, at least for awhile.

      1. I think that you have to have a US based address to continue to add money to your Vanguard funds. But I would call them directly and discuss your situation.

      2. I would max out the 401k before your move. Then you’ll have time to figure out your best moves for 2017.

      Have a great time!

      • AAA says

        Thanks for the prompt reply, and thanks, it is quite an exciting assignment 🙂

        1. I do still have my US address and will continue to keep it.
        2. Okay great, that’s what I was planning to do, (and convince them to keep the plan while I’m abroad, if they legally can).

        Thanks again!


  28. Todd says


    Any advice for a U.K based investor?

    I just want to make it as simple as your website puts it Jl.

    I have £10,000 and want to shove it in best fund available – etf, mutual, index etc

    • Alan Donegan says

      Hi Todd,

      I am a UK investor as well. Have been reading Jim and some others for some time. I had a couple of thoughts to share with you.

      on platforms we have found the most cost effective to be Halifax for ISAs with over £20k in them. I know you are investing £10k this year but you will soon go past this number. Halifax only has a £12.50 annual charge!

      Vanguard have range of funds in the UK and there are lots to suit. From the Lifestrategy 100% equity that gives you global exposure, the US, UK and Developed work excluding UK. there are loads to choose from and mostly low cost.

      Hope that helps? We live down south and happy to chat if we can help


  29. Bastiaan says

    Mr. Collins,

    I’ve been reading your blog for the past two weeks and have lost some sleep over it in excitement. I’m loving everything about it.

    I’m from the Netherlands, I read your Stock Series and many of the comments, and I have one question left: what would be your recommended portfolio for a European in the wealth building stage?

    I’m 29 years old and pretty sure I can handle the bumpy ride. If I would live in the USA, 100% VTSAX would be the way to go . However, because I pay my food in Euro’s, I’m thinking I should probably diversify internationally. So, 100% Vanguard Total World would be an option. However, I am concerned that the performance of this etf won’t do as well as VTSAX, for example. What are your thoughts on this? FundId=3141&FundIntExt=INT#tab=2

    • Guido says

      I’m keen on the answer you would get.

      For me, I put stock-investing part of my portfolio for 100% in iShares Core MSCI World UCITS ETF (AEX:IWDA, IE00B4L5Y983), domiciled in Ireland. I have no doubts about this, although how the taxes go is not that clear to me (I tried..)

      Via DeGiro as trader there are 0% transaction costs, or other fees. So don’t invest with the greedy ING for example (absurd ‘maintenance’ fees).

      For the ‘savings/bonds’ part of my portfolio, it is in Moneyou savings accounts (crappy 0.5% – 0.65% interest rates) and not in Bonds.

      Ratio between stock part and saving account/bonds part is according the 110-age rule of thumb.

        • Guido says

          Hi Bastiaan,
          I think you mean VWRL or VT then instead of VTWSX?
          I cannot find VTWSX to invest into with DeGiro, and VT seems inactive on DeGiro.
          Furthermore, think VT and VTWSX are domiciled in the USA and for Europeans (or Dutch) I believe that means that there are more tax difficulties than with an Ireland-domiciled funds.

          I compared IE00B3RBWM25 (Vanguard FTSE All-World ETF) and IE00B4L5Y983 (iShares MSCI World UCITS ETF (Acc) (EUR) | IWDA) with each other, in terms of:
          – Availability on trader DeGiro
          – UCITS?
          – Domicile
          – Currency
          – TER
          – Dividend (i.e. distributing/accumulating)
          – Region
          – Replication type

          IE00B4L5Y983 (iShares) has a TER of is 0.20% and has Accumulating divident, but has an optimized replication type strategy.
          IE00B3RBWM25 (Vanguard) has a full replication type strategy, but it is distributing divident (that you have to reinvest yourself) and has a TER of 0.25%. I guess the higher TER is due to the requirement to have full replication strategy.

          It is mostly the TER that convinced me to go with iShares rather than Vanguard.
          If anyone disagrees, let me know!

          • Jerome says

            Ok I throw myself. VT is, in my opinion, more advantageous: it is much more diversified than the iShare ETF because it includes emerging markets, it´s cheaper, it´s a us tracker so it isn´t exposed to Double taxation as is the case with the products of Irish rights. The dividends distributed by Vanguard are rather an advantage because they can be consumed once the savings phase is over.

          • Bastiaan says

            Thanks guys, for your responses. I agree with Jerome that VT seems like the best option. However, if you create your own “VT” by buying 55 percent VTSAX and 45 percent VXUS, you have an expense ratio that is .05 lower than that of VT for essentially the same portfolio (.14 for VT against 0.09 for the combination).

          • Guido says

            Hi Bastiaan,
            Morningstar shows me that VT has a TER of 0.09% now (
            The website shows a TER of 0.11% (as of 2/24/2017
            Perhaps they lowered their TER? What do you think.

            I am looking into moving to VT based on your and Jerome’s comment, together with the 100% stocks strategy in JL Collin’s book. I need to wait until my 6-month frozen ‘deposito’ is liquid again until I can move tho.

          • Bastiaan says

            Hi Guido,

            Sounds good. An even lower TER. You could still add VTSAX because it lowers the cost, but simplicity may win. Brave that you are ready to jump all in. I have tipped my toes in the water, but I felt that after ten years of bull markets, my internal irrational market timer started bothering me again. Sticking to 100% stocks under all conditions is really not for the faint of heart. Good luck!

    • jlcollinsnh says

      Hi Bastiaan…

      Since I know nothing about the opportunities and challenges facing European investors, I’m not the best person to help. That is the reason for this post, in fact.

      Better to listen to Jerome and Guido (thanks guys!) and any others here who might choose to respond.

      That said, were I not in the US, a world fund like VTWSX with an ER of .25 or the ETF version VT with an even lower .14 ER.

      In fact, were the ER closer to VTSAX’s .05, I might even be tempted living here.

      Good luck!

      • Bastiaan says

        Hi Jim,

        Thank you for your response! I am very much surprised that the expense ratio might be the only thing holding you back from moving to VTWSX, given all that you’ve written about international stocks. Or am I interpreting your answer incorrectly? And, as Jerome pointed out, isn’t the American Stock market more efficient? So, would you seriously consider moving to VTWSX if the expense ratio were equal to VTSAX?

        Having this discussion brought up another question for me: because all Vanguard funds are in dollars, in terms of currency risk, investing in VTSAX or VTWSX wouldn’t make a difference, right?

        For other investors from Europe, here is what I’ve found helpful:

        Broker DeGiro is very low cost, as Guido pointed out. In fact, a standard account charges nothing for investing in VTSAX or VTWSX, which makes Vanguard just as easily accessible to Europeans as to Americans. However, as Europeans, we pay taxes over dividend gains, depending on the country you live in of course. When investing through a standard DeGiro account, there is one risk one has to be aware of: they are allowed to lend your stocks to people wanting to short those same stocks. Although the risk of this costing you money is very low, there is an option to avoid this risk altogether by creating a Custody account. The downside to this type of account is that you pay 1 euro admin fees in dividend payout fees + 3% of your dividend yields.

        • Bastiaan says

          PS Jim, excuse my greediness, but I would love to hear your take on VTWSX vs. VTSAX assuming they would have the same expense ratios.

        • Oscar says

          Hi all,

          Jim, congratulations on your Excellent Blog!! I love the stock series.

          Thanks also to Mrs. Econowiser for giving us the european point of view.

          Bastiaan, I agree with you on DeGiro, it is an excellent option tu buy Vanguard ETFs for free from Europe.
          Besides, the exchange rate is really low 0,001%.

          On the other hand, in Spain taxes over dividend gains (from 19% to 21%) increase the VT ER 0,11% to, at least 0,3%, (considering a 2% dividend) making more interesting other options.

          Is possible to invest in Vanguard mutual funds from Spain through BNP Paribas and TER range from 0,2 to 0,4%.

          Moreover, it is important to take into account that investments in DeGiro are only protected up to 20000€.

          • Noelia says

            Hey Oscar, I’m a Spanish college student, want to start investing and had just discovered the BNP Paribas option before I came to this blogpost and found your comment! Have you invested with BNP Paribas or from Spain in general? I would love to get in touch with someone from Spain for a little bit of advice to get started and just general talk about financial independence matters. Please get in touch in if you’re interested. 🙂

  30. Jérôme says

    I am french and live in France. I invest 100% on VTI.
    VTI is the cheap ETF and the American stock market is one of the most efficient in the world. It is not because I live in the euro zone that I should not invest all my money in VTI

    • Bastiaan says

      Hi Jerome,

      I get your point. However, as Europeans, we have a currency risk when investing all our euro’s on the other side of the pond in dollars.

      @Jim: I know you get a million questions like these, but I am really curious how your portfolio advice is different for people not living in the US. I know you personally don’t see the need for international stocks, but you’ve also mentioned that you see them as a rational choice. In other words: how would you invest if you lived in The Netherlands (or any other European country)?

    • Tanguy says

      Hi Jérôme,
      good to meet some French people over there.
      I would love to invest in vanguard but I am keen to invest also in my PEA for tax optimisation.
      How do you invest ? through a CTO ?
      Tanguy, Bordeaux (France)

      • Jérôme says

        Hi tanguy!
        PEA is an interesting product for us, french, but it is limited to European stocks. In my case, I prefer to opt for one of the most efficient and cheaper markets in the world.
        See You soon

      • Antoine says

        Hi Tanguy,

        I disagree with with Jérôme on this point.

        Unfortunately, from my (humble) experience, Vanguard is currently not a great option for us. Might be in the future, but not now. PEA is just too good to be ignored.

        However, with synthetic ETFs, you CAN invest outside Europe in your PEA, but not with Vanguard. A few options :

        LYXOR UCITS ETF PEA MSCI WORLD C-EUR (FR0011869353). 0.45% TER
        AMUNDI ETF MSCI WORLD UCITS ETF (FR0010756098). 0.38% TER.
        LYXOR UCITS ETF PEA S&P 500 C-EUR (FR0011871128). 0.15% TER.
        AMUNDI ETF S&P 500 UCITS ETF (FR0010892224). 0.15% TER.

        There are a lot more.

        The World TERs are a bit high for me, so i opted for a three fund, really low cost portfolio, which covers most of the world economy :

        Vanguard FTSE Developed Europe UCITS ETF (0.12%)
        AMUNDI ETF S&P 500 UCITS ETF (0.15%)
        AMUNDI ETF MSCI Emerging Markets UCITS ETF EUR (0.20%)

        Of course, you can also keep it simple and stay with S&P 500. 0.15% is not 0.05%, but honestly it’s still a pretty low TER.


        • Xavier says

          Hi Antoine, Tanguy & Jérôme,

          nice to see fellow Frenchmen on this thread!

          I also agree that the PEA is too advantageous of an option to be ignored.

          I’m a 32M and started investing a few years ago, initially picking stocks individually before seeing the light and gradually moving to Indexing.

          My current strategy is the following:

          1. Contribute to both our PEAs (mine and my wife’s) up to the €150,000 limit (so €300.000 in total).
          I’m keeping it simple and investing 100% in a low TER ETF tracking the US Stock Market. I use Amundi’s S&P500 PEA ETF, which is both cheap at 0.15% and quite liquid (compared to its main equivalent at Lyxor).
          Another option was to use Amundi’s MSCI USA UCITS, which is closer to the Vanguard Total US Stock Market ETF and also PEA-elligible but its expense ratio is higher at 0.28% and I don’t think it’s worth it.

          2. Now that both PEAs are maxed up (Just got there, hurray!).
          I will use a joint CTO to invest our savings in Vanguard’s VTI (Total US Stock Market) and VXUS (Total Stock Market ex-US) with the intention of bringing VXUS’ share to about 20% of my overall portfolio.
          Another option is to use Life Insurance (Assurance-vie) instead of a CTO, to benefit from further tax advantages. But I found these products to be quite inflexible (even with ‘100%’ online providers), they do not usually offer Vanguard’s ETFs, and all sorts of extra fees had tendencies of creeping up over time.

          3. At some point, I’ll add some bonds to the mix. It’s still difficult for me to figure out exactly when to do that. As I get ready to Retire Early and provided the stock market is not plunging, I’ll probably pull a lump sum from my stocks and dump it into a bond ETF.

          I’ve recently moved to Australia, adding another layer of complexity to all this but this is a story for another day 🙂

          I’m keen on hearing what other French people are doing to achieve FI 🙂


          • Fab says

            Hello Gentlemen,

            Here Fabien, doing a follow up: to me the
            FTSE Developed Europe UCITS ETF (VEUR – VAN FTSE EU ETF) from Vanguard is now PEA available. It might interest you 😉

            I agree with Antoine, if I have to choose only one, I may go with AMUNDI ETF MSCI WORLD UCITS ETF (FR0010756098) even though the TER is high (0,38) compare to what we are looking for, seems to be one of the best option for a simple path to wealth.

            I think Xavier’s choice with Amundi’s S&P500 PEA ETF is also a very good one, maybe even better if we are confortable with putting everything on the US. TER is lower (0,15), and over the last 10 year perf is way higher.. Antoine got some as well.

            My choice for now, from France, would be:
            Vanguard FTSE Developed Europe UCITS ETF (0.12%)
            and AMUNDI ETF S&P 500 UCITS ETF (0.15%)
            Pretty much like you guys.

            I got a question for you about that: Vanguard’s ETF VEUR is domiciliated in Ireland. Amundi 500 is domiciliated in France. Does it change something for us french people? I mean fiscally?

            Thanks for everything you guys shared here, keep up,



  31. Matt says

    Afternoon all!

    I initially asked this question on the Bond section of the stock series, but Mr C advised me to post this here. I am hoping someone has an opinion from a UK perspective…

    I am 35 and in the wealth building stage, so I am happy with a reasonable level of risk. I have recently switch my investments from an actively managed fund (Neil Woodford) to low cost trackers with Vanguard via Cavendish Fund supermarket.

    I have 40% in FTSE UK All Share Index Unit Trust Acc and 40% in FTSE Dev World ex UK Equity Index Acc.

    I think I have a nice spread in relation to equity allocation across the markets (although some may say I am too heavily weighted in the UK?)
    I would like to invest the final 20% in bonds that complement my equity allocation.
    Is there a UK version of VBTLX or VFIDX that you mention in your blog above?

    Any thoughts would be welcomed!

  32. Terje says

    Hello guys. Im a Norwegian trying to invest my money as rational as possible. Here is my current portfolio:

    What I am concerned with is currency risk, especially if the dollar weakens or the norwegian kroner strengthens.

    Im thinking about selling the funds that has 0,3% in annual fees.
    And I want to reinvest that into one of the cheaper index funds that I already own a small part of. Vanguard is not available at a reasonable price in Norway, but there are cheap alternatives like Ishare. Investors can also invest with 0,00% annual fees in index funds that contains approximately the 300 largest companies in scandinavia. An S&P 500 indexfund is available at 0,07% in annual fees, the largest 50 companies in the EU is also available at 0,09%. I also have a s&p500 fund where the currency risk is mitigated/insured, but the annual fees are 0,3%.
    If you were me, how would you change the portfolio?

    • Sindre says

      I’m wondering about this too, Terje. I’m also curious what your portfolio looks like now. As a fellow Norwegian, I have to stick to the same rules and choose from the same options.

      • JP says

        Hei hei, Sindre and Terje!
        I have been thinking about this as well… I coincide* with several of the funds that are in Terje’s portfolio, like KLP AksjeNorge, SF Norge and SF Sweden.
        Still, I want to look for a good (norwegian?) alternative to VTSAX and such…

        Have you guys taken a look at VIT?

        Ha det!
        JP, fra vakre Sogndal.

        *I will share my portfolio in our next interaction.

    • Monica says

      Hei Terje, what’s the name of the S&P 500 index fund with 0,07% in annual fees? The lowest annual fee I can find seems to be 0.2% (Handelsbanken USA, KLP AksjeUSA and DNB USA Indeks)

      Monica fra Oslo

  33. Thor says

    I don’t think there is any currency risk between owning in USD and owning in EUR. You own the same stock and it has a set price on the market. I think this is a mistake in the original post.


    Assume 1 USD = 1 EUR. A buys 1000 EUR worth of a stock fund and B buys 1000 USD worth of the same fund. Now if the value of the currency changes so that 1 EUR = 1.25 USD. If B’s fund would still be worth only 1000 USD, then the same stocks would simultaneously have the value of 800 EUR (for B) and 1000 EUR (for A). That can simply not be the case. This means that either the value of B’s fund will rise to 1250 USD or A’s fund will drop to 800 EUR (or something in between). What happens is related to if the actual assets (for example they might own cash and real estate) of the stock is valued in USD, EUR or some third unrelated currency.

    The real currency risk is in what currency the underlying asset (the stocks) are tied to. An European takes a currency risk when buying stocks operating in (and owning) USD regardless of if the fund is listed in USD, EUR, NOK or something else.

    • jlcollinsnh says

      Hi Thor…

      I think you might be on to something here and that it might very well relate to something I’ve been thinking about.

      However, I don’t quite follow what you are saying.

      Can you clarify it a bit?


      • Thor says

        Sorry for not cheking in earlier. What I mean is that you are buyig a part of the company. If that company owns or operates in USD you are exposed to the USD regardless of if you buy a part of that company in EUR or in USD. So you can’t avoid the currency risk by buying American companies in EUR instead of in USD.

        Imagine a company liquidated all of its holdings and now have $1M. If $1M is 0.9 M€ You will own 0.9 M€. This doesn’t depend on in which currency you bought the company. (Otherwise you could arbitrage every currency change by selling your EUR listed stocks, exchaging EUR to USD, and buying USD listed stocks whenever the USD drops).

        Of course a European investor will take a currency risk when buying a US company, but that risk is not associated with the currency used to buy the company. It’s all about the exposure of the COMPANY, because that is what you are buying.

        Might be easier to think in terms of bonds. If I buy $1M of the US T-bills and my living costs are in EUR, then I will take a currency risk. I can’t mitigate that currency risk by asking to list the price tag in EUR when I buy it.

  34. Lynette says

    Thank you Jim for sharing all your insight and advice! A friend told me about and that led me to buying your book.
    I am based in Singapore and was wondering how best to effect your strategies in my local context. While Vanguard has an office in Singapore, it’s not a open to retail investors and after much searching, I discovered I could possibly buy VTSAX through Citibank Brokerage.. fees at 0.35%! I am still doing some research and will let you know if there is any success.
    I am not sure there are any readers out there based in Singapore but if there are, would be happy to connect.

    • JY says

      Hi Lynette, have you found any success with or alternatives with your method above? Am based in Singapore currently, just started working and have bought a bit of IWDA on the LSE through Stanchart. I have heard of VWRD.LSE in the past, and have heard of the hefty 30% dividend withholding tax for non-US peoples for US-domiciled ETFs, so these are options I have found so far (Irish-domiciled so 15% tax which is, well, less bad). Heard most of these from Shiny Things and others on the hardwarezone forums, would be interested to hear your thoughts and experience!

    • Wayne says

      I’m Singaporean and i buy VWRD through interactive brokers. Don’t buy it through stand chart it’s a huge rip off. Ibkr has the best rates for us. Also, vtsax is us domiciled so its subject to 30%dividend withholding tax and what is more is that there is a hefty estate tax above 60k usd. So for us we should only invest in vwrd. Iwda is an option talked alot in singapore but both iwda and vwrd is ireland domiciled so only 15% dividend tax is applied. Iwda has 0.20% expense ratio while vwrd is 0.25%. Iwda does not have emerging markets exposure and is accumulating fund whereas vwrd has emerging markets exposure (about 9%) and distributes dividends quarterly. Vwrd is physically replicated whereas iwda is just based on sampling. Vwrd has lower liquidty than IWDA. I chose vwrd but i reckon it’s up to you which of these features u value more.

  35. Dominik says

    Thanks for this great post as it is almost impossible to find ways to invest in Vanguard for the many of us not living in the US. while the above covers the situation of many readers it does not address my particular situation: German National living in a tax free country. Does anyone know if there is any way to invest into Vanguard Total Stock Market ETF Offshore, meaning to avoid the tax trap altogether?
    Thank you!

  36. Mirko says

    I found this one, only have to invest 25000 Dollar. What do you think it is cheaper than Vanguard and no trading fees on the Schwab platform.
    Schwab Total Stock Market Index® Seeks to track the total return of the Dow Jones U.S. Total Stock Market IndexSM, Ter 0,03%

    • Jose says

      Hi Mirko,

      I am a Spanish Expat living in the UAE. I was highly interested in what you mentioned and just phoned Schwab. Based on what you wrote, my intention was to invest directly thru them in that fund. Unfortunately, they told me on the phone that Schwab Total Stock Market Index is a US Mutual Fund and, as a non-US resident, I cannot have access to it (in case this information helped you).

      Mr Collins, thanks for your fabulous web page!!. I have been studying it for weeks now… and I don’t see a near end to the study!

      I would please like to ask for some “general help” from you guys. Perhaps my situation may help others as well. I will first describe my situation, then my present knowledge about the literature for finally asking my questions (in case someone could help me):

      A. About my present circumstances,

      1. I fortunately have the minimum investment requirements for Vanguard-Ireland-Spain.
      2. I will be returning to Spain for residing there for a few months, so I will open my account in Vanguard from Spain.
      3. However, I will possibly be leaving again, for working in the Middle East, in the following year.
      4. As Spanish (EU) citizen residing in Spain, Vanguard will allow me to open my account; however, once I re-start residing in the Middle East, my account will loose the privileges for re-balancing or for buying further assets and I will only be allowed to: a) sell my funds; or b) leave them alone compounding.
      5. If I keep my address in Spain I will be able to keep operating normally in Vanguard (even if I resided in the Middle East).

      B. My observations on the existing literature are:

      1. As mentioned elsewhere here, Non-american EXPATS can legally shelter their money offshore in a country that doesn’t charge realized or unrealized capital gain taxes. Dividends are normally taxed at a flat rate (e.g: 15%). Moreover, as long as our home or resident country doesn’t tax us on worldwide income, we wouldn’t have to pay capital gains taxes (Spain tax Spaniards on worldwide income as long as we reside in Spain, but the UAE doesn’t).
      2. Vanguard does not allow Spanish/EU EXPATS to open an account as a non-resident.
      3. In Hallam’s book -Millionaire Expat, 2017- (and in the previous lines mentioned this blog), Andrew warns EXPATS against buying directly from Vanguard (he specifically mentioned it for UK Expats, but I am assuming that is pretty much the same for all Europeans). He basically says that buying these funds directly from Vanguard wouldn’t be smart for an expat (even he you could), because keeping our money offshore, in a capital gains–free jurisdiction, helps to solidify our nonresidency status (from our home government’s ministry of finances perspective).
      3. For avoiding getting in conflict with our nonresidency status (as an EXPAT) and for legally sheltering our money offshore, the literature that I have checked (including Hallam’s book) suggests investing thru a discount brokerage account (e.g.: DBS Vickers Securities, Internaxx, Saxo…), which means increasing our investing costs. For more details, you may like to check my table assessing the costs derived from investing thru different brokerages at For mutual funds, the costs derived from investing thru some brokerages after 10 years can be up to 27 times larger (range 6 to 27) than investing thru Vanguard.
      4. In Spain (and in some other countries in the EU), mutual funds are not taxed for generating unrealized capital gains, rebalancing or generating dividends (as long as you do not generate realized capital gains, by cashing your fund); however, ETFs are taxed for all of these (as stocks).

      C. Based on these observations, my Questions are:

      1. Does anyone know why we (EXPATS) could be risking our offshore residency status if we kept a fully operative active account (e.g. by keeping our mailing address in Spain) with Vanguard-Ireland while living abroad?.
      2. Does anyone know if this happens only with Vanguard?. Because, as I mentioned before, I phoned Schwabb today and they told me that there were no troubles for EXPATs and that I could invest freely thru them (without using an offshore brokerage), which I guess that doesn’t favor the existence of legal constraints. Unfortunately, Schwabb is domiciled in the US which, as mentioned by others above, poses its own difficulties.
      3. Finally, would anyone in my situation invest directly thru Vanguard? other similar companies (e.g. Schwabb)? or would you rather get an international brokerage? (e.g. Interaxx)… and, why??

      Sorry for my lengthy explanation but I wanted to summarize well my “premises” before asking you.

      Thank you


      • Federico Rios says

        Hey Jose,

        Your comment here was really useful to me, as I’m a Spanish citizen also looking into in opening an account directly with Vanguard.

        I do live in Spain right now, but we move a lot from country to country with my family, so if you’ve been doing any more research on this subject, it’d be great if you could let me know!

        I was also looking at opening an account at BNP, but stopped pursuing that ave after checking your (very useful) spreadsheet, and seeing that ridiculous front load. Is that right? How can that be possible?

        I just bought Millionaire Expat, as per your recommendation.

        Thanks for your help!

  37. Kevin says

    I would like to invest in msci world to get best diversification my favourite:

    Or The ultra cheap fund: Legal & General
    International Index Trust costs 0.13%
    I will try to buy them in swiss franks as i work in switzerland.

    or us market: cheapest i found was
    Schwab total stock market index 0’03% 25000 min invest sounds reasonable and no transaction fees if u do it on the schwab platform but its usdollars.

    Can you beat this funds price?
    P.s.Hey if u have to invest in another currency i would use transfer wise, charges 0,5%.
    W-8BEN: form would be interesting if that works also for eu or swiss citicens?

    • Alcides says


      Thanks for your valuable insight. You can open an account with Schwab with $25k as international investor. Nebertheless, you have to pay 30% withholding tax as foreign investor right?

      Best regards
      Alcides (from

  38. Susan says

    Hey Jim I thought some of your Irish readers might find this helpful-ETFs have big tax implications here in ireland so this piece might be worth a read. It was put together by “Informed Decisions” run by Paddy Delaney his website is super helpful for everything to do with Irish savings & investing. I had been looking into index funds myself but the tax is really putting me off, here in ireland we can put up to 25% of our salary into our pension pot while minimizing my tax bill, so I’m wondering is that a better road to take.

  39. Susan says have been operating in Ireland since 2013 and give people the option to buy Vanguard Index funds & ETFs for a very low fee but if you are an Irish investor it’s worth checking out Paddy Delaneys piece about the tax implications.

    If investing in Irish Domiciled ETFs you will pay approx 41% tax on dividends & will pay 41% on overall gains. You will have to pay any tax due on growth every 8 years (even if not selling them). This inhibits on the potential compounding.

    • Pat says

      Hi Susan

      I believe that from 2018 is not possible for Irish residents to invest in US-based ETFs…

      I have contacted both Degiro and TD to confirm… so EU domiciled ETFs are the only possible option…

      • Guido Kok says

        DeGiro blocks investing in ETFs that do not offer documentation in the language of the possible customer.
        Other (Dutch) brokers apparently chose to interpret the new legislation differently and still offers this type of investment (e.g. in VT/VTI/VXUS).

        Upon asking Vanguard if they would offer Dutch documentation for their US based funds, the answer is ‘no’, see below their reply.

        With effect from the 3rd January 2018, MIFID II and PRIIPs regulations require various additional disclosures for European regulated funds. Vanguard’s US domiciled ETFs are approved and regulated by the SEC which has different disclosure requirements to those stipulated by MiFID II and PRIIPs. As Vanguard’s US domiciled products are not registered in Europe under AIFMD, these products are not actively marketed in Europe. Therefore, Vanguard does not provide PRIIP KIDs or the transaction costs, ongoing charges and target market analysis for our US domiciled ETFs.

        We understand that some investors are very disappointed with the above, however please be assured that our range of European domiciled equity and fixed income ETFs are fully compliant with MIFID II and PRIIPs and remain available to European investors through distributors. Each of these products will be supported with the appropriate UCITS KIIDs. Please also note that there is no requirement for UCITS funds to produce PRIIP KIDs until Jan 2020.

    • Diarmaid McGee says

      Hi Susan, Pat & Guido,

      Do you know if there is anything else that can be added to this now in April of 2020?

      Have you any other recommendations for all of us here in Ireland looking into Vanguard Investing?

      Thanks for your input on the post here! It was good to see other people in Ireland trying to figure it all out!

      Thank You again,
      Take Care.

  40. Eva says

    Thank you for the very interesting blog. We are US expats living in Austria for the last 3 years and plan to stay here. We have IRA accounts with Vanguard (we love Vanguard) in the USA but we cannot contribute anymore because we do not have a US address. We have wanted to invest here in Austria but none of the good online brokers (still searching) would take us because of FACTA and now I realise that if I find a broker, then we should invest into funds that are US based (because otherwise they are considered PFIC and will be taxed highly besides having to file crazy paperwork) but all the funds I am finding (e.g even Vanguard) have their origin in Luxemburg or Ireland. I am starting to think I cannot buy any ETFs that are US based through European brokers. I would appreciate any feedback on this issue – perhaps someone has already dealt with all of this. Thank you in advance!

    • Radu says

      Hi Eva,

      Would you please share what you’ve learned about investing in Vanguard from Austria? Does the “dividend leakage” issue mentioned in this article apply to us, or can we circumvent that somehow? What is the best (lowest cost) online broker you found so far? Man, index fund investing in the EU is not easy. (even without the complications that you encountered as a US citizen, thankfully I don’t have to deal with those too 🙂

      Thanks in advance.

      • Eva says

        I have not yet invested. I finally found an online broker who will take me: lynx (exists in several European countries and appears a subsidiary of a US broker). My US accountant said that I should not invest in a fund that is domiciled outside the USA or I will be punished with severe filing requirements and extra taxes. I do not yet know what it would mean for Austrian taxes to own US based funds. I noted that the Vanguard funds I have seen so far are domiciled in Luxembourg and Ireland. From what i can see, I will be somehow punished one way or another on taxes (either in the US or Austria). On the other hand, cannot keep wasting money in the savings account. I will report back once i understand the tax implications and have set up the online account.

        • Lauren says

          Hi Eva,

          Hopping in here a little late. Did you find a solution to this problem? I am also facing a similar challenge.

  41. Pat says

    Hi Guido,

    Thanks for your reply and sharing the informative reply from Vanguard

    I don’t think it is related to the documentation language, as Ireland and US share the same language
    But yes, it seems that they don’t want to make an effort in marketing/selling US products to non-US customers… they have their EU products for that, which are probably marketed by a different division…

    So, I am afraid that in Ireland we are going to have to accept paying 41% exit taxes, and the bizarre/unfair 8-year disposal tax rule


  42. Trevor says

    Hi, Thanks Jim for teaching me how to invest.

    The discussion has been mostly around Europe and I thought I can provide some perspective for investors in Hong Kong.

    Vanguard offers a S&P500 fund on the Hong Kong Stock Exchange – 3140.HK. However I noticed that the performance, dividend and fees are all disadvantageous compared to the equivalent VOO on the NYSE.

    The solution I went with is to open a US brokerage account with Charles Schwab and buy VOO (and also VTI for more diversification), at $4.95 a trade. The Hong Kong dollar is pegged to USD, so there is not much currency fluctuation risk, there is of course a charge for each currency exchange transaction and we also have to suffer the 30% withholding tax on dividends. But overall I still think this is better than buying the SP500 fund on the HKSE.

    For international diversification, I suspect the opposite is true, I shouldn’t have to suffer the US withholding tax on dividends on payouts from companies outside the US – hence I went with some combination of 3101.HK and 2805.HK (both Vanguard funds listed on the HKSE representing developed Europe and Asia ex-Japan)

    All of the above are based on some amateurish and cursory research on my part. I will appreciate if anyone can let me know if there are better tools for index investing in this part of the world.


    • Sibelius says

      I am also based in Hong Kong, not familiar at all with investing but interested after finding this marvellous website (Thanks for your generosity jlcollinsnh!). I don’t have a large sum saved, so looking for the most straightforward and cheap way to invest in VTSAX. Opening a US brokerage account sounds daunting (and I am not American), is it advisable to just do it through my bank account in HSBC?

      • Trevor says

        Yes, you can certainly do it with HSBC, the brokerage fees are slightly higher though.

        I have not found a way to invest in VTSAX, the closest alternatives I found were the ones I mentioned in my earlier comment: 3140.HK which is a SP500 fund listed in HK, or VOO and VTI listed on NYSE through a US broker (HSBC has US brokerage service too). I found that the NYSE funds performed slightly better than the Hong Kong counterparts based on returns over the last few years.

        • Sibelius says

          Would be great to crowdsource a list of alternatives to services such as Social Capita, Betterment and so on for readers outside of the US. From my understanding Hong Kong is not as developed as the US in this kind of services.
          I found Tradeflix as a way of avoiding the bank fees to invest in Vanguard ETFs , have you looked into it?

  43. Alan Hertherington says

    Could fellow jlcollinsnh-ers help me with a few questions from a UK perspective?

    Vanguard UK now offers the following fund:

    Name: U.S. Equity Index Fund (Accumulation)
    Benchmark: S&P Total Market Index
    Charge: 0.10%
    Price (15.05.18): £429.14
    Total Stocks (15.05.18): 3,473
    Total assets: £3.2 Billion
    Inception date: 23 Jun 2009
    Investment manager: U.S. Equity Index Team
    Asset class: Equity
    Investment structure: UK OEIC
    Top Holdings (15.05.18):

    Apple Inc (3.10%)
    Microsoft Corp (2.56%) Inc (2.12%)
    Facebook Inc A (1.40%)
    Berkshire Hathaway Inc B (1.40%)
    JPMorgan Chase & Co (1.37%)
    Johnson & Johnson (1.25%)
    Exxon Mobil Corp (1.15%)
    Alphabet Inc C (1.15%)
    Alphabet Inc A (1.12%)

    Could anyone please confirm if for a UK based investor this would be the best way to get into jlcollinsnh beloved VSTAX fund?

    Thank you

  44. Lauri says


    What do you guys think about ETFmatic?
    I’m so overwhelmed with information at the moment (located in Europe, Estonia) and ETFmatic seems such a easy solution, but I guess the fees are pretty bad compaired to the suggestions in this discussion here?

    ETFmatic charges an annual fee of 0.48% of your assets under management of below GBP/USD/EUR 25,000.
    Portfolios of GBP/USD/EUR 25,000 and above will be charged an annual fee of 0.29%.
    We offer a 0% management fee for portfolios of children under the age of 18.
    This fee includes:

    Design and execution of your investment strategy
    24/7 reporting and administration
    Brokerage fees
    Custody fees
    It doesn’t include:

    All fees charged by the banks for transfers to your ETFmatic account
    Total Expense Ratio already priced by the ETF issuers into the assets we buy for your portfolio (0.1 – 0.15% for most ETFmatic portfolios)

    Thanks in advance,

    • jlcollinsnh says

      Hi Wojtek…

      While I am completely unfamiliar with that fund, if it tracks the S&P 500 index it should hold the same portfolio and perform the same as any other fund tracking the S&P 500; including those from Vanguard.

      Of course, the level of fees charged will reduce performance.

  45. Dave Lewis says

    Hi JL – I came across your blog (and now purchased your book) after MMM and a YouTube video where you talked with Google.

    I’m sure this has been shared elsewhere but I can’t seem to find it, what are your recommendations for Canadians and whether or not to diversify globally? I’m 38 w/$250,000 currently in stocks and I want to move over to Vanguard ETFs, was looking closely at VUS, the hedge CDN dollar equivalent of VTSAX. Anything else you’d recommend ?

    • jlcollinsnh says

      Hi Dave…

      Since I know nothing of the Canadian markets, I haven’t written anything about them or the funds available to Canadians. However, if you scan thru the comments on this post, I think you’ll find some Canadians discussing their options and choices.

      You might also check out:

      They are Canadian and they describe in detail what they hold and why.

      Hope this helps!

  46. kal Drako says

    Thank you for this article and everyone for the valuable comments. I have a question:
    “If Vanguard doesn’t hold an office in your country I suggest you go to the Vanguard global portal and click on the United Kingdom. Click on individual investors and then exchange-traded funds or mutual funds “.
    Followed that but I cannot open an account since Vanguard doesnt have an office in my country. Am i missing something? Is there a work around?
    Any suggestions welcome, I reside in Greece at the moment but have ties to Switzerland (spouse) and used to live in the US (I have a SSN) .

  47. John says

    Greetings to all on the path to emancipation.

    Rousseau famously wrote in the ‘Social
    Contract’: Man is born free but everywhere remains in chains!

    For Australian JL Collins aficionados I recommend a combination of VGS/ VAS

    Vanguard VGS composed of developed world large/ MidCap ex-Australia MER 0.18% yield 2.5%. This fund Australian domicile nil estate tax issues

    VAS tracks S&P ASX 300 index MER 0.14%, yield 4.5%

    The new kid on the block is Betashares A200 fund, tracks ASX200 with a mouth dripping MER of 0.07%— take that you naughty Americans!

    Another popular manner to gain global exposure is the venerable VEU/ VTS ETFs, the latter being equivalent to the Collins’s beloved VTSAX

    BROKERS include the usual suspects for expats: InteractyBrokers and Saxo

    And don’t forget to keep making those FI gains!

  48. Thomas says

    Hi there,
    I am Thomas, 39, from France. Just started my FI journey after discovering Mr Money Mustache and reading Jim Collins’ great book. I would like to ask the french guys where do they buy the AMUNDI ETF S&P 500 UCITS ETF (0.15%) from ? Is it through the PEA or directly through a broker ? If from the PEA which PEA would you recommend ? I had one through Axa Banque but the fees are high for each monthly deposit I plan to do.

    I am also invested in Axa Europe Small Caps through my Assurance Vie with a 1% expense rate for each Euro I put there. Is this too expensive ?

    Thank you all for contributing to this great forum,


    • Xavier says

      Hey Thomas,

      Yes, this ETF is “PEA eligible”, so you can hold it inside your PEA.
      Your PEA provider might put additional restrictions on what you can buy, though. For this reason, it’s best to move your PEA away from your retail bank, and to an online provider (like Binck, Bourse Direct, Boursorama, etc.) which have much lower fees and no additional restrictions on what you can buy, as long as it’s PEA eligible. Don’t close your existing PEA, just do a transfer so you don’t reset the holding period.

      As for the Axa Europe Small Caps, I’m not familiar with it. Caveat emptor.
      I will just point out that:
      – Pure Small Caps indices are inherently more risky and volatile than broader market indices (which include small, mid and large caps). In my opinion, they have no place in the portfolio of the non-sophisticated investor.
      – 1% is quite expensive, especially because your Assurance Vie also comes with its own fees on top, which can be absurdly high if your Assurance Vie is held at a retail bank.

      If it’s broad exposure to EU stocks that you want, have a look at ETFs tracking the MSCI Europe index. The one from Amundi (ticker: CEU) has a 0.15% expense ratio (TER).

      Ultimately, you’ll need to keep educating yourself to understand what *you* want, what’s *your* risk profile and what are the options available to you, so you can devise your own strategy that works for *you*.
      Have a look at the r/vosfinances subreddit, the wiki section contains useful information for us frenchies and the various threads there have good pointers to other docs and guides.

      Also, I made an earlier comment on this very page, quite some time ago (!) describing my own strategy. Happy to report I’m still following it today 🙂

      Good luck in your journey.

      • Thomas says

        Hi Xavier,
        Thank you for your detailed and informative answer.
        I felt alone on the FI journey before discovering this blog : )

        I just opened yesterday a PEA (closed my previous PEA as I don’t intend to touch the money before hitting retirement) through an online broker named Degiro who provides the Amundi ETF S&P500. The fees are 0% for a minimum investment of 1000 Euros on ETF’s only, with 0% management fees. Amundi charges 0.15% so that is all it will cost. Pretty happy about that. I am wondering what to do once I hit the PEA’s 150 000 Euros cap though. Close it and move the money directly to Vanguard ? Seems like the PEA is a great way to invest for tax purposes. Then keep it and let it grow without being able to add more ? Through which platform should I invest once I hit the limit then ?
        I am more than confortable with risk, and don’t mind the volatility of my capital. I am here for the long haul, and the market always goes back up as Jim Collins says.

        I agree that 1% cost on my Assurance Vie is killing my earnings little by little. There are 0% management fees, but still. I will close this account and focus all my savings on Amundi’s S&P500, after all, these 500 US companies are operating worldwide and offer sufficient diversification due to globalization of exchanges. I’ll keep my fingers crossed that the Euro/USD exchange rate will be in my favor.

        I will try to dig out your “old” post from this blog, as I am interested in your strategy and will look into what the frenchies have to say on reddit.

        Again, thank you Xavier.

      • Martin says

        Awesome info, thanks Xavier. My daughter is French, living in France and I want to help her get started in investing in index funds tax efficiently. I’ll check out the info in your post!

  49. Amit Bahsaan says

    Hi 🙂
    Thank you so much for sharing your immense and valuable insight with us.
    How can i invest in Vangaurd as an Israeli citizen?

    • Gabe Tel Aviv says

      Very easily – you can buy a Vanguard fund through most brokers. I myself use Interactive Brokers (much cheaper than any of the Israeli brokers), however, you have to submit your tax return every year.

  50. Gustavo says

    Hi @jlcollinsnh!

    First of all, thank you for sharing your experience/knowledge and inspiring others to pursue FI in a simple, but powerful way!

    Like several of the folks eating your blog’s insights, I live abroad, in Brazil.
    The closest I’ve found to VTSAX were two ETFs based on S&P500. According to the tax law, I have to pay 15% over the profit I gain when selling ETF shares. Do you think it’s still worth it?

    Looking forward to your reply!

    All the best!!

    • jlcollinsnh says

      Hi Gustavo…

      Great to hear from Brazil!

      Here in the US we also have to pay tax on the profits from selling shares. It is called a “capital gains tax” and the amount ranges from 0% to 20% depending on your tax bracket, which depends on your income.

      So, yes, still very much worth doing. Even if it is tough to have the government help themselves to a share. 🙂

      • Gustavo says

        Thank you for the quick reply, John!
        It is indeed tough… We work hard and they take a huge bite…

        Moving forward… By looking at how much easier it is for a US to become FI compared to countries like mine, I tend to suspect the real badass (borrowed from MisterMoneyMustache) FI/ER guys live abroad… Have you thought about that? 😀

        I had started my (hopeful) simple path to wealth before knowing your blog, but now I can clean up all that “financial gluttony” off my table and focus on a S&P500 ETF (that’s the best I can do around here, at least for now).

  51. Christiane says

    Hello everybody,

    Thank you for this wonderful post and the great comments!

    For the GERMAN readers:
    I just researched into the tax issue with index funds and ETFs and will look at it from the Germany-US and Germany-Ireland perspective.

    The US charge 30% tax for any income on investments. 2018, the Investmentsteuerreform came into place in Germany with the goal to make the taxes simpler and treat reinvesting funds the same as the ones who pay out their gains. (What was the English name for this?)

    Ireland charges 20% tax.
    The US charge 30% tax.

    Germany now reduces their tax by 30% on the income from investments and the foreign country tax will no longer be reimbursed, which was a heck of paper work for the financial institutions.

    So basically a Company located in Ireland would be the better choice regarding the tax.

    Should the Irish company invest in the States, the tax will only be 15% because of their mutual tax contract. The remaining 15% are invested into the fund to grow it.

    When you sell the shares, you will have to prove that you already paid taxes on it, so keep all the paperwork about your investments and the Einkommensteuerbescheide for much longer than just the 10 years.

    Here is the article:

    I wish you great success with your investments!


  52. Pamela says

    Hello! US expat family living in Australia permanently. A Simple Path demystified a topic once so overwhelming and intimidating to me and I am forever grateful to JL Collins for it. I am a stay at home mother of five and have been immersing myself in all things FI. But there is a gaping hole in the information for expats living in Australia and try as I might to put together a similar simple path as spelled out in the books for Americans, I can’t quite seem to get to the best version for Aussies. Vanguard exists here, but we cannot purchase ETFs through them. The Millionaire Expat book recommends Interactive Brokers, but from what I have gathered their platform is geared toward financial professionals and someone on another forum mentioned the need for them to be CHESS certified which they don’t appear to be. And I can’t figure what is best between VGS, VAS, VEU or VTS. Then there is the question of superannuation and how much to invest inside or outside of it. And what is the best super fund; Hostplus, REST, Australian Super?. And I must admit ignorance to any possible tax implications for a US expat investing in Australia and using the Foreign Tax Credit. Suddenly the path to wealth is feeling much less simple. Someone please show me the way. We have been saving since we moved here and I want to get our money working for us.


    • John says


      Enjoy your stay in Australia! Before you make any move, I strongly advise you see an ex-pat tax advisor

      My impression is that US citizens are better served by buying ETFs registered in the USA.

      Australian listed funds are deemed foreign funds and will attract punitive tax treatment

      Therefore don’t buy any of the ETFs you listed!

      Better to use your US broker to purchase US listed ETFs or use an Australian broker who can purchase US shares for you kept with an American custodian so that when you return, your new broker can transfer the shares to their account

      Good luck

      • Pamela says


        Thanks so much for your reply. Our move to Australia is permanent. Does that change things with regards to your advice? Doesn’t seem to make sense to exchange our AUD for USD to invest in our US Vanguard account when we would need to exchange the money again when we start drawing down (also, the exchange rate for AUD is rubbish at the moment). Interactive Brokers are in the US, but we can open an account in Australia to trade on the ASX. What specific funds would you recommend for us?

        We do have an expat tax accountant to handle our US taxes, but I prefer to insource whenever possible, seeking answers to questions in my own as opposed to paying someone to answer them. Thanks again, John!

        • John says


          The American IRS has a bad habit of tracking its citizens affairs wherever they choose to reside, that is, America has a citizen based tax system rather than most developed countries which have a resident based one.

          Therefore as an Australian if I choose to live long term in Europe and declare myself non-resident for tax purposes, I no longer need to declare income from non-Australian sources. Sadly the US system does not afford you that luxury unless you revoke your citizenship and most ties to America that may be construed as being an American tax resident, Green card holders, long term stay etc

          And if you think that it may be ok to just not declare Australian income, then the USA via CRS ( common reporting standards) obliges Australian banks, institutions to declare your US. Citizen status!

          So I still think it’s a bad idea to buy Oz ETFs until your sort out your TAX RESIDENCY status first. You then, if you remain US citizen, may need to explore the provisions in the double tax treaty between Australia and USA regarding tax relief, estate tax, shares, property treatment etc— messy, messy, messy!

          Hence the reason a popular Youtuber, Nomad Capitalist, revoked his US citizenship and gives tips about life after escaping the talons of Uncle Sam

          Hope this makes sense.

          • Pamela says

            Hi John,

            We are aware that the US taxes us on our global income and we have been filing taxes since we have been here in Australia. So far, the Foreign Tax Credit has canceled out any taxes owed so far as our tax rate is higher in Australia. We do not wish to revoke our US citizenship as our children could choose to move back. We are, for better or worse, tax residents of both the US and Australia. Are you aware of any resources that exist to explain how best for us to invest? I don’t believe the Millionaire Expat book warned against purchasing ETF’s that were domiciled outside of the US. And we don’t own any property or have any plans to. I just need JL Collins to write A Simple Path to Wealth for Expats Living Down Under. Feel free to use the title, Jim. 😉


          • John says


            Completely understand your position. The Bogleheads website has terrific threads pertaining to NRA , US citizens and recommended ETFs.

            I have a feeling that your best bet is to continue buying US registered and listed ETFs.

            I’d be more intent to please the IRS rather than the ATO. Plus you may desire for your children to inherit the assets—as you are aware Australia has no estate tax.

            Moreover ask your US accountant about the tax treatment of ‘ foreign funds’. I suspect the tax imposed would not be worth the exercise

            I find the ATO helpful whenever I’ve had to contact them. You can even get your Oz accountant to ask the ATO for a ‘private ruling’ if you need certainty on a tax matter— I have done same.

            For my pennies, I would chat to a big international accounting firm or a specialist expat tax specialist to plan your investments optimally

    • ZENNON says

      >Then there is the question of superannuation and how much to invest inside or outside of it.

      Hi Pamela,

      25K p.a. in Super (for the awesome 15% tax deal we have here).
      Then the rest outside of Super.


  53. Pamela says


    VTS.ASX has been suggested to me as it is still US domiciled, but you said not to buy VTS, right?


    • John says

      That should be fine. It is an American listed and regulated products.

      VTS I believe has the same components as Collins’ beloved VTSAX

      You can add VEU to get total world exposure

  54. Max says

    Hi John & Mrs EconoWiser,

    Looking for some advice on which doors to knock first.

    In a nutshell: I’m 49, Dutch, living in the Netherlands and looking to invest about €250K savings that are currently sitting idle in a savings account.

    I conceptually like the idea of Index Funds for their well-diversified nature and very low costs, giving stable returns almost guaranteed to beat idle savings sitting in a bank. My initial gut was something like the Vanguard S&P500 Index Fund.

    However, my understanding is that from the NL we cannot invest as easily or cheaply as one could from the USA, correct?
    I also have no clue as to the eventual tax implications.

    Any suggestions as to where to start asking?


  55. Michele says

    Not sure if it was mentioned already but vanguard UK now offer (launched in November 2016) the FTSE global all caps as mutual fund (
    It’s the same as VTWAX but with less holding than the benchmark as its new (6269 against 8891 of the benchmark). So 3 years old and just over £200M under management, keep growing and adding more stocks.

    • Eric says

      Lots of well meaning feedback & advise but investing gets really complex across multiple countries and over 6 yrs!

      Vanguard now do ISA’s, I’m keen to 80/20 stocks/bonds on global spread index funds, so which are the two please!

      Thank you

  56. nilsbrux says

    A very interesting development for would-be Vanguard investors in Europe who were reluctant to buy ETFs distributing dividends:

    The original post mentions that Vanguard ETFs based in Europe are all distributing, but in the past few months Vanguard has been launching accumulating versions of some of their major funds. This includes the “Vanguard FTSE All-World UCITS ETF” highlighted in the post since end of July. See more details here: and here:

    This is great news if the distributing/accumulating nature of the ETF makes a big difference tax-wise where you live. (For me, in Belgium, the distribution meant that I had to go with iShares but now it finally makes sense to invest in Vanguard ETFs!)

  57. Deanna says

    Hello from France!
    Along with US ones, I’m looking into European index ETFs and familiarizing myself with the European indexes.

    Some follow the Euro Stoxx 50. I looked this one up, and it does not seem to have gone up (barely) over its 20 years’ history!

    There is also the S&P Europe 350, FTSE developed Europe, MSCI Europe, all of which seem to have upward trends. So is Euro Stoxx 50 just a bad index? Why has it been stalling for 20+ years? Is it too narrow? Even DAX and CAC 40 have upward trends and they are limited within single countries.
    Any insight would be appreciated.


  58. Pim says


    I am based in Netherlands. I am thinking about investing in the VUSA quoted on the Euronext Amsterdam in EUR via the broker DEGIRO.

    – What do you think?
    – Is there any advantage in investing in the EUR version vs. USD or GBP version (Broker costs, taxes, etc.)?


    • nilsbrux says


      Yes, definitely, there in advantage in investing in the EUR version: you do not have to pay any exchange fees to get the USD or GBP you’d need to buy the other versions. (Of course, these are all the same fund underneath, and it is in USD, so you’re still impacted by the USD/EUR rates in your returns after buying.)

      As far as I understand the only reason you might want the USD version is if you already have or earn USD to invest. Or if you know how exchange rates will move in the future – and if so please share the info!

      Degiro is fine, I think. very competitive fees.
      Do mind their two different types of accounts. The “custody” account is safer (they cannot lend your securities) but has higher costs and some services are not available. Receiving dividends is not free, for instance, in a custody account, but you can get around that by using an accumulating version of your funds.

      Hope this is helpful.

  59. PopeFrancis says


    It seems that majority of EU contries are in a tight spot, but you can imagine for east european countries that this is an even bigger problem since they arent even connected to the whole investment story. My question is: if I am not born im US, but earn US citizenship, am I then counted as an US citizen, meaning there are no double taxations and fees (considering I am living in US after earning citizenship)? Or am i still connected with my origin country and with its rules and regulations regarding the investments?

    • nilsbrux says

      As far as I know it makes no difference how/since when you have citizenship. (Unless you’re planning on running for President.)
      And you shouldn’t be connected to your country of origin anymore if you are a US citizen and resident. Unless of course you have income/assets there.
      It is only the US, I think, who have these crazy rules applying to their citizens’ income and assets even if they live somewhere else. Other countries are more reasonable. 😉

  60. Kapaw says


    I’m a foreigner from Myanmar working in Singapore.

    I came across the book and wanted to follow the advice.
    However, I couldn’t find any Vanguard funds in Singapore.
    Therefore, I bought the Strait Times ETF here in Singapore whenever I could.

    When I think about it, the Singapore companies market doesn’t cover as much global as US Stock Market companies.

    Should I try to switch to US ETF?

    Also, can I have some advice on buying ETF?
    Looks like it will cost me more if I straight away buy whenever I can because of commission fee.

    I’m new in this field of investing.

    Thank you very much for your help.

    • PBJ says

      DITTO, ozzy here, LOVE reading this blog, would absolutely love a way to implement this fantastic advice!

    • Pamela says

      After doing heaps of research, I opened a SelfWealth account where transactions are $10 and their customer support has been solid so far. Your first five transactions are free if an existing member invites you. I’ll place the invitation link here if anyone is interested.

      I did a mix of a 25% VEU and the 75% VTS with my VTS outperforming the VEU considerably. Hope that helps.


  61. Carolina says

    Hi Mr. Collins. I am trying to find out how to buy VTSAX, or VTI from Colombia. I went through all the comments and saw one person from Brazil, although he had a different question about taxes, but no one else from South America. Is there a brokerage company that is recommended for people in South America? I am just trying to find the best company with the lowest fees and figure out how this can be done. Thank you for any light!

    • nils says

      Hi, I’m from Venezuela. I use Interactive Brokers to buy ETFs, and do it in Ireland as there is less Taxes.

    • Carlos Manuel says

      Hi JL, I’ve been investing monthly trough TD Ameritrade buying VTI from Colombia as well but I find the costs of moving the money from latin America very high (opposite to The Simple Path to Wealth).
      Do you know of a way for us to keep costs as low as possible?
      Thanks in advance. Big fan here!

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