best etf portfolio

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Hello everyone. I will show the ETF portfolio that I want to build over time. In my eyes the purpose of an ETF portfolio is that it needs to be simple. This is also its main strength. You don’t have to spend hours and hours rechearching different companies and you’ll probably beat most of the investors that do! If you are not really sure about what an ETF is exactly you can check out this post!

Three ETFs

Three funds. Three exchange traded funds, that is all you need to be perfectly balanced. This way you’ll be perfectly diversified and be able to sleep at night. Keep in mind that I am still young (and aggressive) and that I’m not investing in bonds quiet yet. I also have some exposure to P2P Lending which is basically like bonds if you think about it. Alright, here we go.

IWDA (IE00B4L5Y983)

The first one I would recommend is IWDA (IE00B4L5Y983). This fund should, in my opinion, be the biggest part of your portfolio. This is an accumulating ETF (if you want to know the difference between accumulating and distributing ETFs, check out this post!). The choice between an accumulating or distributing ETF depends primarily on the tax situation in your country. I’m from Belgium and over here we have a 30% tax on dividends which we don’t have to pay when the ETF reinvests them for us. On the other hand I don’t have to pay capital gains tax when I sell. Fingers crossed this will still be the case when it is my time! This ETF mainly covers large caps in the developed world.

best etf portfolio IWDA overview

EMIM (IE00BKM4GZ66) / IEMA (IE00B4L5YC18)

The next fund I plan on buying is EMIM (IE00BKM4GZ66). Again an accumulating ETF for the reasons explained above. This one mainly covers large caps of emerging markets but mid-caps and small caps are also included. This way I’ll have exposure to the markets in Asia, Latin America, Africa, …
EMIM was also recently added to the Degiro free ETF list!

If you are not interested in small caps, which is totally fine, you can also choose to pick IEMA (IE00B4L5YC18). This is also an accumulating ETF that covers emerging markets but only large and mid-caps. The fund size is a bit smaller than EMIM (but still quite sizable). For this reason, it could be less liquid but probably not to an extent that it is a problem for normal investors. The upside is that this one is also free on Degiro to purchase!

best etf portfolio EMIM overview

IUSN (IE00BF4RFH31)

The last fund I am probably going to buy is IUSN (IE00BF4RFH31). Once again, accumulating is the way to go for me. The one covers small cap stocks all over the world. This way I’m not only invested in large caps, yet another way to diversify!
best etf portfolio IUSN overview

Best ETF portfolio overview

This is the portfolio allocation I want to go for. The total TER should be 0,2035% which is a very decent number.

best etf portfolio allocation

This is the weighted region percentage of the three ETF’s I want in my portfolio. As you can see there is a lot of diversification across different regions and this is what i’m looking for.

Do you have any questions or do you think i’m missing something? Let me know in the comments below or send me an email. I would love to hear your feedback!

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François
François
1 year ago

Good advice here. Thank you

boolq
boolq
1 year ago

Cool portfolio! Nicely balanced and cost-efficient. I was thinking also VWRP instead of IWDA + EMIM as an option.

boolq
boolq
Reply to  Michiel
1 year ago

Good choice! Thanks for sharing and good luck on your financial journey.

Grillo
Grillo
Reply to  Michiel
1 year ago

Only the first one you talk about (IE00B4L5Y983 | ISHARES MSCI WOR A) is on the free ETF list of Degiro, is that right?
I haven’t found the EMIM or the IUSN on there (https://www.degiro.co.uk/data/pdf/uk/commission-free-etfs-list.pdf). Thanks!

Mini
Mini
1 year ago

What is your reason to choose iShare Core World before S&P 500 as main ETF?

arctiic
arctiic
1 year ago

Hey, nice post and good research! Im looking into building a similar portfolio.
What do you think about IE00BFY0GT14 (msci world from spdr) instead of IWDA?
It isnt on free list for Degiro but has TER of 0.12%, quite a bit lower. It beats IWDA on total costs after some years, even with monthly investing.
Just some theory 🙂 amazing blog, i will follow! Thanks for your opinion

arctiic
arctiic
Reply to  Michiel
1 year ago

Haha yeah sorry that was exactly the case with the 2nd comment :D.
Ok yeah that makes sense its really close also in the long run youre right. SPDR a little little bit on top. I see, the smaller fund size is a bit of a risk as you say yeah. Ive seen it recommended on other blogs too though, so i think i will have faith. Thanks for your quick answer!

Andrej
Andrej
Reply to  Michiel
1 year ago

You can take into account tracking differences too. IE00B4L5Y983 tracking difference is very small only 0.1 https://www.trackingdifferences.com/ETF/ISIN/IE00B4L5Y983 For IE00BFY0GT14 we don’t know, because it is too young. However, SPDR has better TDs than iShares in general but it has 3x more funds. Based on this https://www.reddit.com/r/ETFs_Europe/comments/fue07l/european_etfs_providers_costs_the_best_and_the/ I assume IE00BFY0GT14 will have a bit better TD than IE00B4L5Y983, the question is if will impact your investments or not.

Wilco
Wilco
1 year ago

Hey I have a question. So IWDA automatically reinvests the dividends? All you do is buy it on Degiro and then it’s automatically reinvested? Is there any way to find out how much dividend they are actually reinvesting or not?

Wilco
Wilco
Reply to  Michiel
1 year ago

Yes thank you so much!

Adriaan
Adriaan
1 year ago

Hi, I have a really similar portfolio as a fellow Belgian . Still looking for my small cap exposure, and came across IUSN (IE00BF4RFH31) ass well. Don’t know if you have any other recommendations for me to consider?

Lolo
Lolo
Reply to  Michiel
1 year ago

Hello. Why would you choose to diversify with small caps rather than mid caps? Also, could you advise me a world mid cap ETF? Something like IWDA but with mid caps. I came across only to IWSZ (IE00BP3QZD73).
Thank you

IWDA
IWDA
1 year ago

I was looking for IWDA on degiro to buy as my first investment. But it showed me two options. One is: ISHARES MSCI WOR A and the other is ISHRC MSCI WLD. Now I been trying to look everywhere on the internet and I can’t seem to find the answer on which one to get.. They have the exaxt same ISIN too. Is really the only difference that one is in EUR and one in USD? I assume since I live in a EUR country I best buy the MSCI WOR A?

Emilio
Emilio
1 year ago

Hi mate,

First oficial all really appreciate you sharing tour journey, I started investing recently and its good to see how others are doing.

I have a couple of questions for you:

1.Do you see (vanguard S&P 500) IE00B3XXRP09 and (MSCI world) IE00B4L5Y983 too similar positions?

2. Do you see P2P lending as short term investing? (1-3 years) which platforms would you recommend to start with?

Many thanks,

Emilio

Emilio
Emilio
Reply to  Michiel
1 year ago

Hi Michiel,

Thanks for your fast reply! Will have a look at mintos.

I notice that the 2 etfs: EMIM and IUSN are not in the commission free ETF list from Degiro, arent There free alternatives?

Best,

Emilio

thebraindamag3
thebraindamag3
1 year ago

Thanks for the information! how would you balance the 3 etfs?

thebraindamag3
thebraindamag3
Reply to  Michiel
1 year ago

Thanks for the clarification Michiel! I’m planning to invest from a HK broker but I just have access to US etfs. I found URTH. I was wondering if it is the same, I can’t spot any difference with IWDA.
Thanks!

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windows xp professional sp3 official edition free download
1 year ago

I’m extremely impressed with your writing skills as well as with the layout on your weblog. Is this a paid theme or did you customize it yourself? Anyway keep up the nice quality writing, it is rare to see a nice blog like this one these days.| а

Dragan
Dragan
1 year ago

Hi Michiel,

Thanks for writing this up, it’s a great article. I’m completely new in this field and would like to have your opinion. I’m 40yrs old and my goal is to retire at 60. So I have 20 years to invest. I can do monthly investments between 500 and 1000 EUR. I was looking to structure my portfolio with 60% of equities and 40% bonds. This is fairly straightforward and probably low risk. I was thinking maybe to risk a bit more and increase equities to 70% and bonds to 30%. What’s your opinion on this?

Jonathan
Jonathan
1 year ago

Hey Michiel

Quick question,
as a fellow Belgian, do we have to pay taxes on the money we make from investing?
Do you also have any plans in investing in real estate? As this can be a nice source of passive income as well.

Thanks for the amazing blog.
Keep it up!

Jonathan
Jonathan
Reply to  Michiel
1 year ago

Thanks for the response man!

Is there maybe a way to sign up for email notifications of your new posts? Would love to get those!

Since you’re also in the IT field, do you have any plans on becoming a freelancer? This could increase your monthly income by a lot even though it’s not the most stable source of income. But finding IT projects in Belgium shouldn’t be a problem 😉

Jonathan
Jonathan
Reply to  Michiel
1 year ago

Hey Michiel

I signed up, thanks. 😉

I’m in the same situation as you, building up some experience before starting to freelance. Who knows, we might run into each other in the future haha.

ETFeling
ETFeling
1 year ago

Quick question, how about taxes, you say that you don’t pay capital gains but there is the infamous TOB (taks op beursverrichtingen). Does DeGiro handle this well for you? Or do you use another broker?

I’m actually strongly doubting to start an account with DeGiro after what I’ve read about them.
– Only guarantees 20k money back if they screw up.
– No banking license.
– Recently acquired by flatex, a German broker -> what will happen to the fees?
– Shady MMF (money market fund) with negative interests – when your money is “waiting” to be invested, it loses value. Now they cover a part of that cost, but for how long?

If it’s true that they automatically withhold and register taxes, that’s a nice “pro”, but that’s about the only thing that’s attractive, apart from the low fees. The low fees can also be had at e.g. IBKR (interactive brokers) – much more solid enterprise (I feel) and better guarantees when they go bust (250k). The “con” for IBKR would be the inactivity fee of $10/month (waived when your assets reach >=100k -> Much cheaper overall than DeGiro once you reach this) and NO tax handling: you’d have to do it by yourself. Not sure how I feel about that.

Any ideas on how you handle these things? Choice of broker / handling taxes / risk management / Future scaling?
Did you register your account with the NBB?

Kind regards!

Victor
Victor
1 year ago

Hi Michiel.

That’s a really useful article, great job 🙂
What do you know/think about investing in tax efficient pension funds and benefit from tax relief?

Kind regards!

Jonathan
Jonathan
1 year ago

Hey Michiel
Do you have any plans now that the stock market is rapidly decreasing in value (due to corona?) ?
I only just started investing this week and think it’s quite scary to already have a 200 euro loss.

froleprotrem
froleprotrem
1 year ago

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Hinesh Modi
Hinesh Modi
1 year ago

Hey,

I have a question, is it still necessary to split the first two ETF’s as you have stated. I am new to this and was reading a fair few articles including your blog posts and I was thinking to invest in the following Vanguard FTSE All World ETF. Would this be ok too rather than splitting the two?

In addition to this I would also look at the small caps you mentioned.

Also I want to invest in bonds too…. do you have any advice in regards to this?

Hinesh Modi
Hinesh Modi
Reply to  Michiel
1 year ago

Hey,

Thanks for the quick response!

I am still torn between your strategy and the one I found one another site (Index fund investor)

I will have a good think as I like many aspects of your strategy too. Maybe I will go with a single all world etf and then small caps like you…. but I need to do more research.

Thanks I will look into bonds, to be honest I would like to invest the Gov Bonds where I currently live (Czechia) but this is for the future.

I have had a little read about P2P lending… is it still a good idea? How risky is it?

Thanks again!

Sima Dodds
Sima Dodds
1 year ago

The The perfect ETF portfolio article is one of
the best I have ever read!

You are doing a great job with https://www.investingyoungster.com site.
🙂 KIsses!

Giorgos_stab
Giorgos_stab
1 year ago

Hello what are your thoughts on VHYL is it worth investing long term just for dividends I know that’s very diversified

Sean
Sean
1 year ago

Hi Michiel,

I am a 19-year-old Irish guy and I started to learn about investing back in April and I am now learning every day. I’m not sure if you are aware but taxation on ETFs in Ireland is shockingly bad… subject to CGT every 8 years regardless if you buy/sell/hold. I have a couple of thousand I am looking to invest in a couple of weeks time and I think it will be roughly something like this: 60% IE00B4L5Y983 30% IE00B2QWCY14 10% IE00B4L5YC18. What are you’re thoughts on this?

David
David
1 year ago

Hi there,
Thanks for this post, it is very interesting.
I am starting to invest and I am a bit lost defining a strategy.
The ETF plan looks promising, but how does it compare to a fund?
What is the advantage to a fund replicating indexes, for example, Amundi Index MSCI World AE-C?
thanks

Ana Silva
Ana Silva
1 year ago

Hi Michiel,

New follower over here and loving your content! 😉
Question: for someone choosing to go with just VWCE instead of the combo IWDA+EMIM, and since VWCE is not on the “free ETF” list on Degiro, what would you say is the best way to invest in this ETF? I´m thinking perhaps 2/3 times in the year, instead of monthly contributions.
I would like to have an excel to help me calculate this difference. Do you know how it can be done?

Many thanks in advance.

Breno
Breno
11 months ago

Amazing post! Quick question: I see there are 3 different currencies for those ETFs. In this case, let’s say I’m investing in euros, wouldn’t be better to invest in funds based on euros already? Thanks Michiel for sharing!

Breno
Breno
Reply to  Michiel
11 months ago

Hey Michiel! It does 🙂 actually I’m using Trading 212 and it doesn’t charge any exchange fees. Here’s what I see:

* IUSN -> EUR
* EMIM -> GBX
* IWDA -> USD

So I wonder if for example it would be good to change for this:

* IWDA -> EUNL
* EMIM -> IS3N

Or even replace both for VWCE. Although they should have similar rentability, they are actually so different I got confused.

Thank you so much Michiel!

Grzegorz
Grzegorz
11 months ago

Hi,

Assuming I build a portfolio in Degiro of only two ETFs: 75% Word + 25% EM, which EM ETF would you recommend: iShares Core MSCI Emerging Markets IMI UCITS ETF (Acc) on EAM (online quotes but lower liquidity) or on XET (greater liquidity) or iShares MSCI EM UCITS ETF (Acc) on EAM (free in Degiro but low liquidity). Which will fit better with the IWDA?

Grzegorz

Tycho
Tycho
9 months ago

I’m from the UK. Is it worth to invest in IWDA Instead of SWDA? Or does it matter? I know one is Pounds and another is Dollars.
Should I sell my IWDA And replace for SWDA? If I do sell, It would be a fee.

Thank you for reading

Tycho
Tycho
Reply to  Michiel
9 months ago

Hi Michiel,
Thank you for your help and your response.

Olivier
Olivier
9 months ago

hi,

Any reason why to invest in IWDA instad of SUSW? I’m looking for a big weight ETF for my portfolio and found out that SUSW is practically the same as IWDA, but more sustainable (futureproof?)

Kind regards

Macaroni
Macaroni
9 months ago

I’m 20 years old and new to investing.
I worked for a bit and have a decent amount of money on account.
So to start i want to buy these etf with around 10k. Should i just sepnd the whole 10k or divide it over monnths?
I will later add more to it, at least double it.

Patrick
Patrick
8 months ago

Hi Michiel,

Thanks to your great blog amongst all my other research I have done, I am happy to have started a position in IWDA AND EMIM.

I am planning to make large lumpsums into Degiro for these two ETFS. I am not concerned with Small Caps. I don’t feel comfortable lobbing a large block of cash in in one go so I will just put in large chunks each month or lumpsum it all in when I feel comfortable.

How do you rebalance?
I will probably only buy EMIM twice a year to keep costs low. Does it really matter if they percentages are not exactly like 85% IWDA 15% EMIM. If I only buy EMIM once or twice a year, they will probably get a little out of balance to the perfect ratio, if you understand.

What is your strategy? Thanks

Patrick
Patrick
Reply to  Michiel
8 months ago

Thanks

I have not added any emerging markets. IEMA that was previously a very high TER but is now lowered right?

Are you suggesting that IEMA is a better pick now than EMIM?

Granted then my whole portfolio would have no broker costs which might be nice, even though EMIM is not very expensive if you buy it sparingly.

I must do some research on IEMA, what would be your view if you were starting now? Will you change your EMIM to IEMA?

I have only added IWDA for now. I’m 27 and started last month.

Cheers!

David
David
8 months ago

Hi,
I see your actual portfolio and I see you added two stocks to it.
Why is that? are you starting to invest in single companies?
cheers,

David
David
7 months ago

Hi,
It’s me again 😉

I’ve been checking a bit further

Why not the SWRD
https://www.justetf.com/uk/etf-profile.html?isin=IE00BFY0GT14
instead of the IWDA?

the TER is 0,12. It’s quite significant difference compared to 0,20

cheers

David
David
Reply to  Michiel
7 months ago

ahá
I understand, because of the broker. It makes sense!
thanks

Alejandro
Alejandro
7 months ago

Hi Michiel,
I really liked your article and I really appreciate you doing it and I am going to take two of the named etfs. I am starting in this and I don’t know whether to diversify my portfolio or go only with IWDA. I am 25 years old and I would like to make monthly contributions of 300-400 euros.

My diversified portfolio would be
IWDA: 70%
IEMA: 15%
QQQ: 15% (LU1829221024)

What do you think of adding as 3 etf QQQ and of the percentages that I have put? Would you add more or take away from some?

Thanks and regards

Faju
Faju
5 months ago

Thank you a lot for this post, really.
I have two doubts:

a) If IWDA and IEMA are both in the Degiro’s free of comission list, can I buy them both in the same month for free? Or is it ONE free transaction only?

b) If you were starting now would you go IWDA + IEMA + IUSN on Degiro? Isn’t IEMA instead of EMIM, in the long run, be way more cheaper since it is in the free list?

Thank you!

Grzegorz
Grzegorz
Reply to  Michiel
5 months ago

EMIM is also on Degiro free list now 🙂