{"id":2329,"date":"2024-03-13T21:27:24","date_gmt":"2024-03-13T21:27:24","guid":{"rendered":"http:\/\/localhost\/dpetkovski\/?p=2329"},"modified":"2024-07-03T18:36:22","modified_gmt":"2024-07-03T18:36:22","slug":"core-stock-portfolio-for-eu-investors-etf-selection-tips","status":"publish","type":"post","link":"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/","title":{"rendered":"Core Stock Portfolio for EU Investors (ETF Selection &#038; Tips)"},"content":{"rendered":"<p>If you&#8217;re investing from Europe, you most probably spent a lot of time researching <a href=\"https:\/\/dpetkovski.com\/etfs-exchange-traded-funds\/\">ETFs<\/a> and determining your <a href=\"https:\/\/dpetkovski.com\/asset-allocation-finding-your-ideal-distribution\/\">asset allocation<\/a>.<\/p>\n<p>And given the plethora of <a href=\"https:\/\/dpetkovski.com\/dca-dollar-cost-averaging-investment-strategy-explained\">investment strategies<\/a> and products you can choose from, it&#8217;s easy to get overwhelmed, especially as a beginner.<\/p>\n<p>In this post, I&#8217;ll cover how a <strong>European investor&#8217;s core portfolio<\/strong> might look like. Using these tips will position your stock portfolio for best performance in the long run.<\/p>\n<p>You might consider it a suggestion.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_60 ez-toc-wrap-center counter-hierarchy ez-toc-counter ez-toc-white ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\" role=\"button\"><label for=\"item-668bb73dbdfc6\" ><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input aria-label=\"Toggle\" aria-label=\"item-668bb73dbdfc6\"  type=\"checkbox\" id=\"item-668bb73dbdfc6\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#Core_Portfolio_Description\" title=\"Core Portfolio Description\">Core Portfolio Description<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#The_US_Allocation\" title=\"The US Allocation\">The US Allocation<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#Recommended_United_States_ETF_CSPX_iShares_Core_S_P_500_UCITS_ETF\" title=\"Recommended United States ETF: CSPX (iShares Core S&amp;P 500 UCITS ETF)\u00a0\">Recommended United States ETF: CSPX (iShares Core S&amp;P 500 UCITS ETF)\u00a0<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#The_EU_Allocation\" title=\"The EU Allocation\">The EU Allocation<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#Recommended_Developed_Europe_ETF_IMEA_iShares_Core_MSCI_Europe_UCITS_ETF\" title=\"Recommended Developed Europe ETF: IMEA (iShares Core MSCI Europe UCITS ETF)\">Recommended Developed Europe ETF: IMEA (iShares Core MSCI Europe UCITS ETF)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#The_Exact_Numbers\" title=\"The Exact Numbers?\">The Exact Numbers?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#Beyond_the_Core_Portfolio\" title=\"Beyond the Core Portfolio\">Beyond the Core Portfolio<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#Emerging_Markets\" title=\"Emerging Markets\">Emerging Markets<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#Recommended_Emerging_Markets_ETF_EMIM_iShares_Core_MSCI_EM_IMI_UCITS_ETF\" title=\"Recommended Emerging Markets ETF: EMIM (iShares Core MSCI EM IMI UCITS ETF)\">Recommended Emerging Markets ETF: EMIM (iShares Core MSCI EM IMI UCITS ETF)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#What_About_Canada_Australia_or_Japan\" title=\"What About Canada, Australia, or Japan?\">What About Canada, Australia, or Japan?<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#Recommended_Japan_ETF_SJPA_iShares_MSCI_Japan_ETF\" title=\"Recommended Japan ETF: SJPA\u00a0(iShares MSCI Japan ETF)\">Recommended Japan ETF: SJPA\u00a0(iShares MSCI Japan ETF)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#Sector_Exposure\" title=\"Sector Exposure\">Sector Exposure<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#Example_Portfolios\" title=\"Example Portfolios\">Example Portfolios<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#The_Classic_Core_Portfolio\" title=\"The Classic Core Portfolio\">The Classic Core Portfolio<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#The_USEUEM_Portfolio\" title=\"The US\/EU\/EM Portfolio\">The US\/EU\/EM Portfolio<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#The_Core_Portfolio_with_EM_and_Tech_Boost\" title=\"The Core Portfolio with EM and Tech Boost\">The Core Portfolio with EM and Tech Boost<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#A_Combination_of_All_Mentioned_ETFs\" title=\"A Combination of All Mentioned ETFs\">A Combination of All Mentioned ETFs<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#Closing_Thoughts\" title=\"Closing Thoughts\">Closing Thoughts<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Core_Portfolio_Description\"><\/span>Core Portfolio Description<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The D. Petkovski-approved <strong>core portfolio<\/strong> has a few <strong>key characteristics<\/strong>:<\/p>\n<ul>\n<li>It contains\u00a0<strong>exclusively\u00a0<\/strong>low-cost funds (click <a href=\"https:\/\/dpetkovski.com\/total-expense-ratio-the-importance-of-keeping-it-low\/\">here<\/a> to read why)<\/li>\n<li>Is sufficiently diversified<\/li>\n<li>Consists of funds that reinvest the dividends (click\u00a0<a href=\"https:\/\/dpetkovski.com\/accumulating-vs-distributing-etfs\/\">here<\/a> to read why)<\/li>\n<li>It&#8217;s not too complex to maintain<\/li>\n<li>Is market-cap weighted<\/li>\n<li>Leaves flexibility to be enriched\/modified based on personal preferences<\/li>\n<\/ul>\n<p>The main region that the core portfolio should cover is US.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"The_US_Allocation\"><\/span>The US Allocation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A United States ETF should be the largest allocation of this portfolio.<\/p>\n<p>There is\u00a0<strong>no alternative\u00a0<\/strong>to this.<\/p>\n<p>Avoid &#8220;North America&#8221; or &#8220;developed markets&#8221; ETFs that put multiple countries in one basket. Nothing should dilute the amount of money you put in the US markets.<\/p>\n<p>The United States of America is the country that leads in terms of innovation, technological development, and productivity.<\/p>\n<p>And all other countries follow. First the &#8220;developed nations&#8221; and then the rest of the world.<\/p>\n<p>Economically as well: when the <a href=\"https:\/\/dpetkovski.com\/how-the-money-printer-makes-you-poor\/\">USA changes rates<\/a>, the whole western world gets impacted. During US bull markets, all developed nations are thriving. When USA gets in a recession, we have a global economic downturn.<\/p>\n<p>We live in the era of <em>&#8220;<a href=\"https:\/\/en.wikipedia.org\/wiki\/American_imperialism\">American imperialism<\/a>&#8220;<\/em>. One must not ignore the influence the US has over the rest of the world.<\/p>\n<p>Couple this with the fact that it&#8217;s the home of the most prosperous companies, and it becomes clear:<\/p>\n<p><strong>The US should be your major allocation.<\/strong><\/p>\n<h4><span class=\"ez-toc-section\" id=\"Recommended_United_States_ETF_CSPX_iShares_Core_S_P_500_UCITS_ETF\"><\/span>Recommended United States ETF: <strong><a href=\"https:\/\/www.ishares.com\/uk\/individual\/en\/products\/253743\/ishares-sp-500-b-ucits-etf-acc-fund\">CSPX<\/a> (iShares Core S&amp;P 500 UCITS ETF)\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li><strong>Total expense ratio:<\/strong> 0.07%<\/li>\n<li><strong>Distribution policy: <\/strong>Accumulating<\/li>\n<li><strong>Index:\u00a0<\/strong>S&amp;P 500<\/li>\n<\/ul>\n<p>Check my detailed reasoning behind why it&#8217;s the best pick in this post: <a href=\"https:\/\/dpetkovski.com\/cspx-vs-vusa-vs-iusa-my-thoughts\/\"><strong>CSPX vs IUSA vs VUSA<\/strong><\/a>.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"The_EU_Allocation\"><\/span>The EU Allocation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A developed Europe ETF is optional, but important for those seeking geographical diversification. Of course, its allocation should reflect that.<\/p>\n<p>The reason that we&#8217;re not balancing these more equally is, first of all, because the EU market is smaller in market cap.<\/p>\n<p>Also, one of the top European sectors is the <i>Financial <\/i>one. This is broken down into overregulated industries where innovation is (s)low. It will always reflect the economic progress, but won&#8217;t lead it.<\/p>\n<p>EU is for the stability, not the growth.\u00a0Given that none of these countries is becoming the technological-advancement hub of the world, this allocation smooths out the downside more than it boosts the upside.<\/p>\n<p>At the same time, we eliminate too high of a concentration risk by adding diversification across more than 10 democratic countries with relatively stable economies.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Recommended_Developed_Europe_ETF_IMEA_iShares_Core_MSCI_Europe_UCITS_ETF\"><\/span>Recommended Developed Europe ETF: <strong><a href=\"https:\/\/www.ishares.com\/ch\/individual\/en\/products\/251861\/ishares-msci-europe-ucits-etf-acc-fund\">IMEA<\/a> (iShares Core MSCI Europe UCITS ETF)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li><strong>Total expense ratio:<\/strong> 0.12%<\/li>\n<li><strong>Distribution policy: <\/strong>Accumulating<\/li>\n<li><strong>Index:\u00a0<\/strong>MSCI Europe<\/li>\n<\/ul>\n<p><img decoding=\"async\" class=\"size-full wp-image-2330 aligncenter\" src=\"http:\/\/localhost\/dpetkovski\/wp-content\/uploads\/2024\/03\/EU-exposure.png\" alt=\"core portfolio\" width=\"988\" height=\"599\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"The_Exact_Numbers\"><\/span>The Exact Numbers?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>My theories aside, the numbers speak for themselves.<\/p>\n<p>The current market-caps of the S&amp;P 500 and the MSCI Europe constituents are around $43 trillion and $10 trillion, respectively. If we apply simple market-cap weighing when taking this fact into consideration, it means that we should distribute somewhere between 85\/15 and 80\/20.<\/p>\n<p>I think this 80% USA allocation is sufficient, <strong>but should be considered the minimum\u00a0<\/strong>due to reasons explained above.<\/p>\n<p>Adjusting it to 90\/10 or even 95\/5 would be ideal.<\/p>\n<p>And the added benefit? CSPX, same as most other S&amp;P 500-tracking ETFs, has a TER of 0.07%. This will <strong>drastically<\/strong> lower your total cost, always in the 0.0x% range.<\/p>\n<p><strong>This allocation is D. Petkovski approved and recommended<\/strong><strong>.<\/strong> It&#8217;s your call if you choose to use it.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Beyond_the_Core_Portfolio\"><\/span>Beyond the Core Portfolio<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As mentioned in the\u00a0<strong>key characteristics<\/strong>, the core portfolio should leave flexibility for additional investments.<\/p>\n<p>So, make sure that the core portfolio, as a whole, is <strong>at least\u00a0<\/strong>80% of your total allocation. This leaves you with\u00a00-20% space to diversify into other markets as well.<\/p>\n<p>Below are the my best optional recommendations:<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Emerging_Markets\"><\/span>Emerging Markets<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Emerging markets are a great way to both increase diversification and get exposure to completely different regions.<\/p>\n<p>They&#8217;re especially valuable parts of a portfolio due to their less correlated nature with the rest of the core portfolio.<\/p>\n<p>Still, I consider EM exposure as optional. But it&#8217;s my <strong>top recommendation<\/strong> beyond the core portfolio.<\/p>\n<p>Eventually, we might see a sudden rise in the development of some of these nations. But historically, emerging markets consistently underperform the developed markets. I&#8217;d be surprised to see a broad EM ETF having a continuous stellar performance. But that&#8217;s why this allocation boils down to preference.<\/p>\n<p>In any case, I&#8217;d limit the exposure to a max of 10%.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Recommended_Emerging_Markets_ETF_EMIM_iShares_Core_MSCI_EM_IMI_UCITS_ETF\"><\/span>Recommended Emerging Markets ETF: <strong><a href=\"https:\/\/www.ishares.com\/uk\/individual\/en\/products\/264659\/ishares-msci-emerging-markets-imi-ucits-etf\">EMIM<\/a> (iShares Core MSCI EM IMI UCITS ETF)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li><strong>Total expense ratio:<\/strong> 0.18%<\/li>\n<li><strong>Distribution policy: <\/strong>Accumulating<\/li>\n<li><strong>Index:\u00a0<\/strong>MSCI Emerging Markets<\/li>\n<\/ul>\n<p>Detailed reasoning behind why it&#8217;s the best Emerging Markets ETF: <a href=\"https:\/\/dpetkovski.com\/the-best-emerging-market-etf-for-europeans\/\"><strong>The Best Emerging Market ETF for Europeans<\/strong><\/a><\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_About_Canada_Australia_or_Japan\"><\/span>What About Canada, Australia, or Japan?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>If you have reasons to want exposure to Canada or Australia, go for it.<\/p>\n<p>If your only reasoning is diversification, my argument would be that the\u00a0<strong>core portfolio\u00a0<\/strong>already gives you sufficient diversification <strong>across the developed world<\/strong>. Leaving out 2-3 (non-crucial) countries won&#8217;t make the performance of the total portfolio much different. After all, they&#8217;re highly correlated with US\/EU, which you already have plenty of.<\/p>\n<p>Also, I can&#8217;t think of a scenario where any of those countries outperforms the US markets on a continuous basis.<\/p>\n<p>Japan is the exception, as it can be less correlated with what you already hold. So exposure to Japan, or developed Asia in general, is D. Petkovski approved.<\/p>\n<p>Worth mentioning that Japan&#8217;s market&#8217;s performance has been more or less flat for 30 years, but that&#8217;s not an indicator for future returns.<\/p>\n<p>Keep it up to 5% of the full allocation.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Recommended_Japan_ETF_SJPA_iShares_MSCI_Japan_ETF\"><\/span>Recommended Japan ETF: <strong><a href=\"https:\/\/www.ishares.com\/uk\/individual\/en\/products\/251867\/ishares-msci-japan-ucits-etf-acc-fund\">SJPA<\/a>\u00a0(iShares MSCI Japan ETF)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul>\n<li><strong>Total expense ratio:<\/strong> 0.15%<\/li>\n<li><strong>Distribution policy: <\/strong>Accumulating<\/li>\n<li><strong>Index:\u00a0<\/strong>MSCI Japan<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Sector_Exposure\"><\/span>Sector Exposure<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Boosting a certain sector is optional, discouraged without strong basis, but D. Petkovski approved.<\/p>\n<p>The ETF you&#8217;re using to boost a sector would contain an overlap of companies that you already invest in. In this case, this is fine. Your goal\u00a0<strong>is\u00a0<\/strong>to strengthen your allocation in these companies.<\/p>\n<p>To remain a <em>&#8220;passive&#8221;, &#8220;broad-market&#8221;, &#8220;index&#8221;<\/em> investor, I&#8217;d limit the allocation to 5-10% of the total portfolio. More than that might make you cross the line between index investing and stock picking.<\/p>\n<p>I won&#8217;t give examples of ETFs because there are plenty of sectors that different investors might want to boost.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Example_Portfolios\"><\/span>Example Portfolios<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"The_Classic_Core_Portfolio\"><\/span>The Classic Core Portfolio<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img decoding=\"async\" class=\"size-full wp-image-2331 aligncenter\" src=\"http:\/\/localhost\/dpetkovski\/wp-content\/uploads\/2024\/03\/core-useu.png\" alt=\"core portfolio\" width=\"600\" height=\"371\" \/><\/p>\n<ul>\n<li style=\"text-align: left;\"><strong>CSPX (iShares Core S&amp;P 500 UCITS ETF):<\/strong> 90%<\/li>\n<li style=\"text-align: left;\"><strong>IMEA (iShares Core MSCI Europe UCITS):<\/strong> 10%<\/li>\n<\/ul>\n<p><strong>Note: the total expense ratio of this amazing portfolio is 0.075%. <\/strong><a href=\"https:\/\/dpetkovski.com\/iwda-vs-vwce-and-vwrl-for-european-investors\/\">IWDA<\/a> is almost 3 times more expensive, for a similar performance and diminishing returns on diversification.<\/p>\n<p>Keep in mind: this is just an example. If you feel that a 90\/10 is too concentrated, you can change it to 80\/20 or anything in between (85\/15 etc.).<\/p>\n<p>Personally, I prefer 100% US.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"The_USEUEM_Portfolio\"><\/span>The US\/EU\/EM Portfolio<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img decoding=\"async\" class=\"size-full wp-image-2332 aligncenter\" src=\"http:\/\/localhost\/dpetkovski\/wp-content\/uploads\/2024\/03\/core-useuem.png\" alt=\"core portfolio\" width=\"600\" height=\"371\" \/><\/p>\n<ul>\n<li style=\"text-align: left;\"><strong>CSPX (iShares Core S&amp;P 500 UCITS ETF):<\/strong> 80%<\/li>\n<li style=\"text-align: left;\"><strong>IMEA (iShares Core MSCI Europe UCITS):<\/strong> 10%<\/li>\n<li style=\"text-align: left;\"><strong>EMIM (iShares Core MSCI EM IMI UCITS ETF): <\/strong>10%<\/li>\n<\/ul>\n<p>Again, this is just an example with round numbers. Distributions of 85\/7.5\/7.5 or 85\/10\/5 are also good alternatives.<\/p>\n<p>It depends on what you want.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"The_Core_Portfolio_with_EM_and_Tech_Boost\"><\/span>The Core Portfolio with EM and Tech Boost<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img decoding=\"async\" class=\"size-full wp-image-2333 aligncenter\" src=\"http:\/\/localhost\/dpetkovski\/wp-content\/uploads\/2024\/03\/core-techboos.png\" alt=\"tech portfolio\" width=\"600\" height=\"371\" \/><\/p>\n<ul>\n<li style=\"text-align: left;\"><strong>CSPX (iShares Core S&amp;P 500 UCITS ETF):<\/strong> 75%<\/li>\n<li style=\"text-align: left;\"><strong>IMEA (iShares Core MSCI Europe UCITS):<\/strong> 10%<\/li>\n<li style=\"text-align: left;\"><strong>EMIM (iShares Core MSCI EM IMI UCITS ETF): <\/strong>5%<\/li>\n<li style=\"text-align: left;\"><strong>QDVE (iShares S&amp;P 500 Information Technology Sector UCITS ETF):<\/strong> 10%<\/li>\n<\/ul>\n<p>Won&#8217;t list alternative allocations as there can be much variation, but you get the point.<\/p>\n<p>You can decrease the sector boost in accordance with the strength of your conviction. The more the personal twist you put, the less &#8220;<a href=\"https:\/\/dpetkovski.com\/stock-market-index-explanation-and-examples\/\">index investing<\/a>&#8221; you&#8217;re doing.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"A_Combination_of_All_Mentioned_ETFs\"><\/span>A Combination of All Mentioned ETFs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img decoding=\"async\" class=\"size-full wp-image-2334 aligncenter\" src=\"http:\/\/localhost\/dpetkovski\/wp-content\/uploads\/2024\/03\/core-complex.png\" alt=\"diversified portfolio\" width=\"600\" height=\"371\" \/><\/p>\n<ul>\n<li style=\"text-align: left;\"><strong>CSPX (iShares Core S&amp;P 500 UCITS ETF):<\/strong> 70%<\/li>\n<li style=\"text-align: left;\"><strong>IMEA (iShares Core MSCI Europe UCITS):<\/strong> 10%<\/li>\n<li style=\"text-align: left;\"><strong>SJPA (iShares MSCI Japan ETF):\u00a0<\/strong>3%<\/li>\n<li style=\"text-align: left;\"><strong>CPXJ (iShares Core MSCI Pacific ex Japan UCITS ETF):\u00a0<\/strong>2%<\/li>\n<li style=\"text-align: left;\"><strong>EMIM (iShares Core MSCI EM IMI UCITS ETF): <\/strong>5%<\/li>\n<li style=\"text-align: left;\"><strong>QDVE (iShares S&amp;P 500 Information Technology Sector UCITS ETF):<\/strong> 10%<\/li>\n<\/ul>\n<p>Keep in mind that a the more ETFs you add to your portfolio, the more the <a href=\"https:\/\/dpetkovski.com\/rebalancing-managing-your-investment-portfolio\">rebalancing<\/a> complexity increases. At this stage, it&#8217;s worth asking oneself whether Asia Pacific ex-Japan and a sector boost is really something they want.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Closing_Thoughts\"><\/span>Closing Thoughts<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Whatever you&#8217;re doing, a combination of CSPX and (optionally) IMEA should be <strong>at least\u00a080% of your long-term stock portfolio<\/strong>. Even leaving it at 100% is not a mistake.<\/p>\n<p>This will optimize your portfolio&#8217;s long-term performance, especially compared to the alternatives. This is mainly due to the fact that the total-portfolio <strong>total expense ratio\u00a0<\/strong>will\u00a0<strong>always\u00a0<\/strong>be in the format of 0.0x%.<\/p>\n<p>But, of course, I fully support everyone&#8217;s freedom of choice to spend <a href=\"https:\/\/dpetkovski.com\/iwda-vs-vwce-and-vwrl-for-european-investors\/\">0.22% on VWCE<\/a>.<\/p>\n<p>With all that being said, if you feel like this post is a bit too advanced for your level, maybe read my more beginner-friendly <a href=\"https:\/\/dpetkovski.com\/how-to-start-investing-a-complete-beginner-series\/\">introduction to investing in the stock market<\/a>.<\/p>\n<p>Invest wisely!<\/p>\n<hr \/>\n<p><em>For the complete EU investing posts, visit: <a href=\"https:\/\/dpetkovski.com\/eu-investors-handbook\/\"><strong>EU Investors Handbook<\/strong><\/a>.<\/em><\/p>\n<p><em>If these posts are too advanced for you, visit: <\/em><strong><a href=\"https:\/\/dpetkovski.com\/how-to-start-investing-a-complete-beginner-series\/\"><em>How to Start Investing: A Complete Beginner Series<\/em><\/a>.<\/strong><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you&rsquo;re investing from Europe, you most probably spent a lot of time researching ETFs and determining your asset allocation. And given the plethora of investment strategies and products you can choose from, it&rsquo;s easy to get overwhelmed, especially as a beginner. In this post, I&rsquo;ll cover how a European investor&rsquo;s core portfolio might look&nbsp;&hellip;<\/p>\n","protected":false},"author":1,"featured_media":2335,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,17],"tags":[],"ppma_author":[4],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Core Stock Portfolio for EU Investors (ETF Selection &amp; Tips) - D. Petkovski<\/title>\n<meta name=\"description\" content=\"I&#039;m covering a selection of ETFs that should be part of the core portfolio when investing from Europe or EU. Read my reasoning and suggestions.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Core Stock Portfolio for EU Investors (ETF Selection & Tips) - D. Petkovski","description":"I'm covering a selection of ETFs that should be part of the core portfolio when investing from Europe or EU. Read my reasoning and suggestions.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#article","isPartOf":{"@id":"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/"},"author":{"name":"D. Petkovski","@id":"http:\/\/localhost\/dpetkovski\/#\/schema\/person\/ce4d9bf1ba43635723c9d1b513b58049"},"headline":"Core Stock Portfolio for EU Investors (ETF Selection &#038; Tips)","datePublished":"2024-03-13T21:27:24+00:00","dateModified":"2024-07-03T18:36:22+00:00","mainEntityOfPage":{"@id":"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/"},"wordCount":1582,"publisher":{"@id":"http:\/\/localhost\/dpetkovski\/#\/schema\/person\/ce4d9bf1ba43635723c9d1b513b58049"},"articleSection":["Investing","Stocks &amp; ETFs"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/","url":"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/","name":"Core Stock Portfolio for EU Investors (ETF Selection & Tips) - D. 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Read my reasoning and suggestions.","breadcrumb":{"@id":"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/"]}]},{"@type":"BreadcrumbList","@id":"http:\/\/localhost\/dpetkovski\/core-stock-portfolio-for-eu-investors-etf-selection-tips\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"http:\/\/localhost\/dpetkovski\/"},{"@type":"ListItem","position":2,"name":"Core Stock Portfolio for EU Investors (ETF Selection &#038; Tips)"}]},{"@type":"WebSite","@id":"http:\/\/localhost\/dpetkovski\/#website","url":"http:\/\/localhost\/dpetkovski\/","name":"D. Petkovski","description":"","publisher":{"@id":"http:\/\/localhost\/dpetkovski\/#\/schema\/person\/ce4d9bf1ba43635723c9d1b513b58049"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"http:\/\/localhost\/dpetkovski\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":["Person","Organization"],"@id":"http:\/\/localhost\/dpetkovski\/#\/schema\/person\/ce4d9bf1ba43635723c9d1b513b58049","name":"D. Petkovski","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"http:\/\/localhost\/dpetkovski\/#\/schema\/person\/image\/90ed75112c4551a9821543cf78919925","url":"http:\/\/0.gravatar.com\/avatar\/?s=96&d=mm&r=g","contentUrl":"http:\/\/0.gravatar.com\/avatar\/?s=96&d=mm&r=g","caption":"D. Petkovski"},"logo":{"@id":"http:\/\/localhost\/dpetkovski\/#\/schema\/person\/image\/90ed75112c4551a9821543cf78919925"},"description":"D. Petkovski \ud83d\udcd3 Author\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Husband &amp; Father Software Engineer\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0StrengthCentric Bitcoin Hodler\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0DeFi Veteran \u00a0 \ud83c\udf0d Everything Enthusiast \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\ud83d\udd25 Optimist Revolutionizing ideas. Simplifying complexity. Sharing knowledge.","sameAs":["https:\/\/facebook.com\/dpetkovski","https:\/\/www.instagram.com\/strengthcentric\/","https:\/\/twitter.com\/petkovskix"],"url":"http:\/\/localhost\/dpetkovski\/author\/petkovski\/"}]}},"authors":[{"term_id":4,"user_id":1,"is_guest":0,"slug":"petkovski","display_name":"D. Petkovski","avatar_url":"http:\/\/2.gravatar.com\/avatar\/?s=96&d=mm&r=g","user_url":"","last_name":"","first_name":"","description":"<span style=\"font-size: 23px\">D. Petkovski<\/span> <br> <br>\r\n\r\n\ud83d\udcd3 Author\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0<span class=\"css-1qaijid r-bcqeeo r-qvutc0 r-poiln3\"><img class=\"emoji\" role=\"img\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/14.0.0\/svg\/1f46a.svg\" alt=\"\ud83d\udc6a\" \/> Husband &amp; Father <\/span>\r\n<br>\r\n<span class=\"css-1qaijid r-bcqeeo r-qvutc0 r-poiln3\"><img class=\"emoji\" role=\"img\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/14.0.0\/svg\/1f5a5.svg\" alt=\"\ud83d\udda5\ufe0f\" \/> Software Engineer\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 <\/span><span class=\"css-1qaijid r-bcqeeo r-qvutc0 r-poiln3\"><img class=\"emoji\" role=\"img\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/14.0.0\/svg\/1f4aa.svg\" alt=\"\ud83d\udcaa\" \/><\/span><span class=\"css-1qaijid r-bcqeeo r-qvutc0 r-poiln3\">\u00a0StrengthCentric <\/span>\r\n<br>\r\n<span class=\"r-18u37iz\"><img class=\"r-4qtqp9 r-dflpy8 r-zw8f10 r-10akycc r-h9hxbl r-9cviqr\" src=\"https:\/\/abs.twimg.com\/hashflags\/Bitcoin_evergreen\/Bitcoin_evergreen.png\" alt=\"\" width=\"20\" height=\"20\" \/> <\/span> Bitcoin <span class=\"css-1qaijid r-bcqeeo r-qvutc0 r-poiln3\">Hodler\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0   \u00a0                            \u00a0 \u00a0 \u00a0<\/span><span class=\"css-1qaijid r-bcqeeo r-qvutc0 r-poiln3\"><img class=\"emoji\" role=\"img\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/14.0.0\/svg\/1f4c8.svg\" alt=\"\ud83d\udcc8\" \/><\/span>\u00a0<span class=\"r-18u37iz\">DeFi<\/span><span class=\"css-1qaijid r-bcqeeo r-qvutc0 r-poiln3\"> Veteran <\/span><span class=\"css-1qaijid r-bcqeeo r-qvutc0 r-poiln3\">\u00a0<\/span>\r\n<br>\r\n\ud83c\udf0d Everything Enthusiast              \u00a0 \u00a0 \u00a0 \u00a0   \u00a0 \u00a0 \u00a0              \u00a0   \u00a0\ud83d\udd25 Optimist <br><br>\r\n\r\nRevolutionizing ideas. Simplifying complexity. Sharing knowledge. \r\n"}],"_links":{"self":[{"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/posts\/2329"}],"collection":[{"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/comments?post=2329"}],"version-history":[{"count":6,"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/posts\/2329\/revisions"}],"predecessor-version":[{"id":3436,"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/posts\/2329\/revisions\/3436"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/media\/2335"}],"wp:attachment":[{"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/media?parent=2329"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/categories?post=2329"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/tags?post=2329"},{"taxonomy":"author","embeddable":true,"href":"http:\/\/localhost\/dpetkovski\/wp-json\/wp\/v2\/ppma_author?post=2329"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}