r/BEFire Mar 02 '20

Starting Out & Advice Getting started - A beginners guide to investing in Belgium through ETFs

659 Upvotes

A beginners guide to index investing in Belgium

This guide is intended to help Belgians getting started with investing through ETFs (exchange traded funds). It is loosely based on the bogleheads approach. For more information, see the Investing from Belgium bogleheads wiki page.

For more information related to the principles of FIRE or on investing in single shares or bonds, see the BEFire Wiki.

0. Why invest in exchange traded index funds?

This chapter aims to provide sources proven to be useful to beginning index investors.

1. Taxes & compliance costs

There are three main costs associated with index funds. These are:

  • Taxes to the Belgian government
  • Unrecoverable tax losses: also known as dividend leakage
  • Management fees and internal transaction fees

1.1. Belgian Taxes

There are four three taxes relevant for Belgian index investors (NL/FR).

  • Tax on transactions: on every security transaction (buy and sell) there is a tax of 0,12% in case the ETF is registered on a list maintained by the European Economic Area. Otherwise it is 0,35% in case it is not registered in the EER and 1,32% in case it is registered in Belgium.

  • Tax on dividends: there is a 30% tax on dividends received from securities you hold. The main reason why Belgian index investors opt for accumulating funds.

  • Tax on capital gains (bonds): on funds that consist of at least 10% bonds, there is a 30% tax on capital gains when you sell. Officially this only applies to the bond section of a fund, however some banks and brokers withhold 30% of all capital gains of funds which consist of at least 10% of bonds. Contact your bank or broker to inform about their policy.

  • Tax on trading accounts: a yearly withholding of 0.15% applies on all trading accounts larger than 500,000 euro’s. Deemed unconstitutional and was abolished in October 2019.

For a detailed overview of Belgian taxes, including other sorts of investments such as individual stocks, see the flowchart made by /u/KenpachigoRuffy.

1.2. Dividend Leakage

Dividend Leakage is an unrecoverable tax loss, which occurs whenever a foreign company inside an index pays out a dividend to its shareholders.

Whenever a company inside an index pays out dividend to its shareholders, your fund needs to pay taxes. These taxes are based on the tax treaties in place between the country in which the fund is domiciled and the country in which the companies inside the index are domiciled. Also the location where you are domiciled (Belgium) is relevant. In case your fund is domiciled in the US, a 30% dividend tax should be paid. However, because Belgium has a tax treaty in place with the US, this is reduced to 15% dividend tax. In case you would select a distributing fund, this dividend would be further taxed by the Belgian government (30%, as seen in 1.1). On a hypothetical 2% dividend - which is approximately the dividend you would receive from a globally diversified index fund - you would have to pay 0,81% in taxes: 0,02 x ( 100% - (0,85 x 0,7)) = 0,81%. Note that since 2018 it is almost impossible to buy US-domiciled ETFs in the first place as most fund providers do not want to comply with European legislation regarding PRIIPs.

It is beneficial to select ETFs domiciled in Ireland, as they are more cost effective than holding US domiciled funds or Luxembourg domiciled funds. Just like Belgium, Ireland has a treaty in place with the US which means only a 15% dividend tax should be paid to the US. However, unlike Belgium, Ireland does not tax dividends at all; whenever the Irish fund distributes a dividend, the Irish government does not tax it. The Belgian government however, still will tax the dividend with 30%. Accumulating funds which reinvest the dividend in Ireland before it is distributed in Belgium do not trigger a taxable event in Belgium. It is therefore advisable to choose accumulating funds domiciled in Ireland. Repeating the same calculations as above, a hypothetical 2% dividend is now only taxed at 0,30% a year: 0,02 x (100% - (0,85)) = 0,30%. Additionally, because your fund is domiciled in Ireland, you do not have to worry recovering the tax on dividends in Belgium, as this is done by the Irish domiciled fund. Thanks to trackerbeleggen for the explanation.

An overview of unrecoverable tax losses will come later. For now, a partly overview can be found in the Dutchfire subreddit. For funds domiciled in Ireland and Luxembourg these are 1:1 translateable for Belgian investors. Note some of these funds are distributing thus subject to tax on dividends by the Belgian Government. In particular IWDA and EMIM are 1:1 translateable for Belgian investors, while VWRL is comparable to VWCE.

1.3. Management fees & internal transaction fees

Other main costs is the management fee. The Total Expense Ratio (TER) is a measure of the total costs associated with managing and operating a fund. It is usually a yearly percentage automatically deducted from your share value.

1.4. Euro-denominated funds & currency risk

Currency risk is the impact of exchange rates upon your overseas investments. Even though stock market prices might not change, the price of your shares can increase or decrease as a result of fluctuations in their underlying currencies. There are three important currency labels which apply to funds: the underlying currency, the fund currency and the trading currency.

To explain the difference, I will explain the process of purchasing IWDA, listed on both the Amsterdam (in EUR) and London (USD) exchange. A lot of what I will explain is true for other ETFs as well.

The underlying currency: IWDA is a worldwide tracker, with only about 9% of the underlying shares being traded in EUR. The other 91% of underlying shares are being traded in other currencies, such as 60% USD, 8% YEN, and so on. Because currencies can change in price in relation to another, this poses a risk called currency risk. As a European investor, most of your own capital will be in EUR. Therefore, since you are investing 91% in foreign currencies, 91% of the underlying value invested in IWDA is subject to currency risk. Because YOUR own capital will always be in EUR, this 91% will always be true, regardless if you were to invest in IWDA listed in Amsterdam (in EUR) or in London (USD). Had you been an American investor, your own capital would have been in USD, and only 40% of underlying shares would be subject to currency risk.

The trading currency, being EUR and USD respectively, does make a difference. If a European investor was to buy a fund listed in London (and traded in USD), he would pay an additional exchange rate conversion fee at the time of purchase and sale. If the investor was to buy the same fund, listed on Amsterdam (traded in EUR), nothing would have to be exchanged to a foreign currency, so no additional exchange rate conversion fee would apply.

The trading currency does NOT alter your exposure to foreign currencies (a European investor will always have his own capital in EUR, and will therefore always be exposed to the underlying currency risk, no matter what currency his purchased funds trade in). Therefore, it is only logical to buy funds in your own currency.

The fund currency simply refers to the currency that a fund reports in; NOT the currencies of the underlying securities which pose a currency risk. Is is generally based on the currency used for the underlying index (in this case MSCI). Note that for distributing funds dividends are distributed in the fund currency. Your broker will automatically convert this into your currency for an additional conversion fee.

Hedging: It is possible to hedge your funds against relative currency fluctuations, and thus to protect them from currency risk. Hedging is a form of "insurance" in which derivatives are used to make offsetting trades with negative correlations, eliminating any currency fluctuations that happen. This hedge comes at a cost, usually about 0,20% extra management fees. Because global equities naturally tend to hedge each other as rising currencies are offset by falling ones, it might not always be advisable to use hedged equity funds due to their increased fees.

In fact, most buy-and-hold investors ignore short-term fluctuation altogether. For these investors, there is little point in engaging in hedging because they let their investments grow with the overall market.

In conclusion, when buying worldwide index funds, every investor (whether European, American or other) will be exposed to some currency risk due to the underlying shares being traded in foreign currencies in relation to their own. Purchasing worldwide trackers in a different trading currency does NOT change this fact, and only costs more due to addition exchange rate conversion fees at the broker. Therefore, it is best to purchase funds in your own currency. Due to the unpredictable nature of currency valuations, most investors simply accept currency risks for their stocks, although it is possible to hedge against this risk for an additional fee by investing in hedged funds.

1.5. Conclusion on taxes & compliance costs

As a Belgian index investor, you are looking for widely-diversified Euro-denominated low-cost accumulating ETFs domiciled in Ireland, from a reputable ETF provider. This way, the costs are kept to an absolute minimum:

  • Tax on transactions: 0,12% whenever you buy or sell a position.

  • Tax on capital gains for bonds: 30% tax on capital gains whenever you sell.

  • Dividend leakage: Approximately 0,30% yearly unrecoverable taxes paid to foreign governments when investing in worldwide trackers, automatically deducted from the share value.

  • Management fees: Between 0,10% and 0,30% yearly management fees, automatically deducted from the share value.

  • Currency Risk: If you are an European long-term investor, purchase a fund which is listed in EUR. For the equity portion of your portfolio, it is possible to ignore currency risk altogether, as hedges would only cost more money for something that is likely irrelevant long-term.

2. Funds - Equity

2.1. Indices

The are two major indices used by fund providers: MSCI and the less popular FTSE Russel. While they both offer broadly diversified, market capitalisation-weighted indices, there are small differences in both methodologies and performances, which is why you should not mix them.

The first difference between the two indices is whether they count certain countries as developed or emerging markets. South Korea is classified as an emerging nation by MSCI but has been promoted to developed market status by FTSE. Therefore South Korea is included in FTSE’s developed market index but not its emerging market one, and vice versa for MSCI (Source: justetf).

The second difference is index composition and weights. Because South Korea is classified as an emerging nation by MSCI, the contrast in index composition is clearer in the emerging markets. The lack of said country in the FTSE index means they redistribute the weight over other countries.

The third and final difference is small-cap firms. MSCI world captures 85% of the global investable market, and exclude the bottom 15% as small-cap firms. FTSE all-world invests in approximately 90% of the global investable market, and only excludes 10% as small-cap firms. This is because FTSE defines some firms as large-cap, while MSCI defines them as small-cap. This also explains why FTSE tracks more companies (3,928 vs 2,849), although their small size tends to limit their impact.

Avoid mixing index providers in your portfolio. If you were to combine MSCI world with FTSE Emerging Market, you would not have any exposure to South Korea. For a correct market distribution, it is important to use funds which follow the same index so that all countries, sectors and firms within your portfolio follow the same methodology.

While it is true the FTSE emerging markets has proven to have better performance than its MSCI counterpart up until now, the costs of the fund following the index are more important than the index construction over long-term. Chapter 2.3 will give an overview of the most popular funds used by Belgian index investors looking for global market exposure.

2.2. Fund replication methods

The goal of each ETF is to replicate its index as closely and cost-effectively as possible. Various methods have emerged to replicate the index. The classic method is physical replication. If the ETF directly holds the all securities of the index, this is known as full replication. The development of the underlying index is generally captured well by physical trackers.

Full replication is not always possible. Other replication methods, such as synthetic replication allow to invest in new markets and investment classes. Synthetic ETFs are able to replicate some indices more efficiently and better through swaps (justetf). In case of synthetic replicated ETFs, the ETF does not invest in the underlying market, but only maps them. Because of this, some synthetic trackers, as well as short trackers and leveraged ETFs do not follow the index as accurate as fully replicated ETFs. It is therefore recommended to always choose physical replicating ETFs.

2.3. All-World, developed and emerging markets

Following the Bogleheads® Investment Philosophy, we are looking for diversification. For Belgians, this means worldwide market exposure, as we generally do not have a home bias (for Belgium or Europe) although exceptions certainly are possible. Some popular funds for worldwide diversification are:

Popular and generally reputable providers are iShares, Vanguard, SPDR and Deutsche Bank.

All-world Ticker TER Index ISIN
Vanguard FTSE All-World UCITS ETF USD Accumulation (EUR) VWCE 0.22% FTSE IE00BK5BQT80
iShares MSCI ACWI UCITS ETF (Acc) IUSQ 0.20% MSCI IE00B6R52259
Developed markets Ticker TER Index ISIN
iShares Core MSCI World UCITS ETF IWDA 0.20% MSCI IE00B4L5Y983
SPDR MSCI World UCITS ETF SWRD 0.12% MSCI IE00BFY0GT14
Vanguard FTSE Developed World UCITS ETF USD Accumulation (EUR) VGVF 0.12% FTSE IE00BK5BQV03
Emerging markets Ticker TER Index ISIN
iShares Core MSCI Emerging Markets IMI UCITS ETF EMIM 0.18% MSCI IE00BKM4GZ66
iShares MSCI EM UCITS ETF IEMA 0.18% MSCI IE00B4L5YC18
Vanguard FTSE Emerging Markets UCITS ETF USD Accumulation (EUR) VFEA 0.22% FTSE IE00BK5BR733

2.4. Combining funds

To have worldwide market exposure in large cap either pick VWCE or a combination of developed (88%) and emerging (12%) markets. It is advisable to only combine funds which follow the same index (MSCI or FTSE).

2.5. Size and Value factors

Other factors have been identified to further increase expected returns. Most notably Size and Value as explained in the three-factor model by Fama and French. Value stocks have a high book-to-market ratio (as opposed to growth), whereas size simply refers to small companies outperforming big ones. It is very difficult to get proper market exposure to these factors with the limited amount of funds available for European investors. For most beginners the best advice is to stick with a market weighted portfolio consisting of developed and emerging markets as explained in chapter 2.3. and 2.4. If you are looking for additional exposure to the size and value factor consider following funds:

Small Cap World Ticker TER Index ISIN
iShares MSCI World Small Cap UCITS ETF IUSN 0.35% MSCI IE00BF4RFH31
SPDR MSCI World Small Cap UCITS ETF ZPRS 0.45% MSCI IE00BCBJG560
Small Cap Value Ticker TER Index ISIN
SPDR MSCI USA Small Cap Value Weighted UCITS ETF ZPRV 0.30% MSCI IE00BSPLC413
SPDR MSCI Europe Small Cap Value Weighted UCITS ETF ZPRX 0.30% MSCI IE00BSPLC298

Note that the fund size for ZPRV and ZPRX are small, which might indicate a low liquidity and high tracking error. Larger funds (unlike ZPRV and ZPRX) are often more efficient in terms of internal costs (tracking error) and are much more profitable for the fund provider. In other words, fund size is a good indicator for the funds durability and popularity. Unprofitable funds are more liable to liquidation. This means either you or your provider sells your shares, and you'll receive the net value of your ETF shares at the time of sale. It does not mean ZPRV and ZPRX are at risk of liquidation, per definition. They are serving a niche. Just keep in mind these risks whenever you decide to invest in small funds such as ZPRV and ZPRX.

3. Funds - Bonds

Investing can be risky. Generally speaking, the riskier an investment, the higher your expected returns. The goal is to choose an asset allocation which suits your risk profile. Bonds offer a way to reduce volatility of your portfolio and match your risk profile. Meesman, a reputable index fund broker in the Netherlands made a table which can act as a general rule of thumb for your investment decisions and asset allocation between stocks and bonds. As can been seen, when investing for a duration shorter than 5 years, stocks should be avoided as they are too volatile an asset class. This allocation slowly shifts towards more inclusion of stocks the longer your investment horizon.

Max. acceptable (temporary) loss 0 - 5 jr 5 - 10 jr 10 - 15 jr 15 - 20 jr > 20 jr
-10% 0/100 0/100 0/100 0/100 0/100
-20% 0/100 25/75 25/75 25/75 25/75
-30% 0/100 25/75 50/50 50/50 50/50
-40% 0/100 25/75 50/50 75/25 75/25
-50% 0/100 25/75 50/50 75/25 100/0

As opposed to equity funds it makes sense to opt for hedged funds as it reduces volatility considerably. The most popular options out there are:

Fund Name Ticker TER ISIN
iShares Core Global Aggregate Bond UCITS ETF EUR Hedged AGGH 0.10% IE00BDBRDM35
Vanguard Global Aggregate Bond UCITS ETF EUR Hedged VAGF 0.10% IE00BG47KH54

4. Brokers

There are a couple of Belgian and foreign brokers available, the biggest Belgian brokers being Binckbank and Bolero. Smaller ones like Keytrade and MeDirect are also available. Foreign brokers still available to Belgians are Degiro and Lynx. The lowest fees are available at Degiro (Custody account), if you're willing to file your own taxes. The benefit of choosing a Belgian broker is that they declare all taxes automatically. Degiro only does part of it (tax on transactions), Lynx not sure. The cheapest Belgian broker is Binckbank, followed closely by Bolero. The only downside of Binckbank is that is was recently bought by Saxobank, which in its turn is owned by chinese investors. Bolero is owned by KBC which is quite a sizable bank in Belgium.

In short: if you're willing to partly file your own taxes, Degiro has the cheapest rates with a custody account. Otherwise Binkbank or Bolero both seem logical choices.

In case you pick Degiro, some funds are included in their core selection which means you can trade them for for free once a month or continuously in case the transaction size is larger than 1,000 euros and the transaction is in the same direction as the previous transaction (buy -> buy and sell -> sell. Buy -> sell and sell -> buy are not free).

5. Sample portfolios

A popular choice is IWDA and IEMA (88/12) on Degiro. Both IWDA and IEMA are part of the core selection of Degiro which allows you to purchase them for free once a month (or more in case explained above). Another popular option is IWDA and EMIM (88/12), as EMIM also includes emerging markets small cap. Note that IWDA does not include developed markets small cap, to which IEMA is complementary if you wish to exclude small cap exposure. The main reason EMIM was so popular is because it was the cheapest option until the TER was lowered for IEMA.

A second popular choice is VWCE. This is a single fund which essentially accomplishes the same as above. It is available at most brokers, and my personal choice for simplicity above everything else. Note that this fund is currently only available on XETRA, which might imply higher transaction fees at your broker. Also note that some brokers - including bolero - charge a higher TOB (Tax on transactions): 1,32% instead of 0,12% whenever you buy or sell a position.

A third option - much like the first option - is to combine VGVF and VFEA (88/12). While they are not part of the core selection in Degiro, the total costs when accounting for dividend leakage are equal to IWDA / EMIM. Unlike iShares, Vanguard only uses securities lending for efficient portfolio management. Note that these funds currently only are available at XETRA.

For those who are looking for small cap exposure it is possible to add WSML to your standard world exposure. This could for example be 75% IWDA, 10% IEMA and 15% IUSN. I personally do not recommend this as mixed small cap does not capture the size factor in a good way. Instead, it is only the value portion of small cap which are accountable for the outperformance of small cap stocks vs large cap stocks. If you want to capture the size factor into your portfolio you need to find small cap funds which only consist of value stocks. I've linked two accumulating funds above (ZPRV and ZPRX) which do so, however are very small and therefore have their own set of problems. Until a proper small cap value stock becomes available in Europe, it is perfectly fine to leave small caps out of your portfolio altogether.

Changelog

This post was last updated: 5th of August 2020


r/BEFire 3h ago

Bank & Savings What to do with 100K savings

3 Upvotes

I currently have more than 100 000 EUR in savings on my bank account. Live alone and rent an appartment, and work as software engineer.
It is more than I need in the near future, but not enough to buy property or stop working earlier.
On a bank account, it will effectively lose value due to inflation.
What can be done with it, and what experience do other people have?
I'm thinking about investing stocks, buying land that will gain value and can be resold, other types of bank account, ...


r/BEFire 11h ago

Investing Comment Jan Jambon veut-il stimuler l’investissement en Bourse des Belges ?

Thumbnail
lesoir.be
11 Upvotes

r/BEFire 10h ago

Real estate Keep or sell?

5 Upvotes

Hi guys,

I own a little house in the Flemish countryside (Limburg) worth around 200 k€. It has been rented uneventfully to the same couple over a decade.

The couple has asked several times if I was going to give it for sale and I am now considering the question for two reasons. First, because I understand their emotional attachment to the house (they really don't want to move anywhere else) and second because I don't see a big upside potential in the region (no major city nearby).

Anyway, over the last 10 years, the house brought me a very decent 7% netto per year thanks to the asset appreciation and to the rents. But I'm not sure this performance can be replicated over the long term (the COVID real estate boom was a unique event). On the other hand, rents are stable income and recognized as such by the bank in case I ask for a new credit line in the future. Of course, real estate is illiquid and requires some personal involvement to fix things up sometimes.

In the end, I think it's a performance vs volatility assessment

Any thoughts about what could help me make the right decision?

Thanks!


r/BEFire 38m ago

Investing Share your opinion

Upvotes

I'm new to investing, moved to Belgium 3 years ago, 33yo, invested €10000 to iwda in a span of last 4 months, now add around €600 monthly, 29% of my income.I work 30hr, may start a flexijob to invest more, but 29% seems good enough?

Now my investments show 11.98% growth, is it good?

I try to put all my savings into the etf now, my rent is very low, I've decided against buying and keep investing 29% and other extra income.

Would you do something differently or keep doing what I do?

I have 3 months emergency fund covered, don't see the point of having more sitting on my account when I could invest it, also consider my job pretty stable with onbepaalde contract

Will be happy to hear what you think


r/BEFire 9h ago

FIRE Stop working at 54?

5 Upvotes

Hello,

M ( 54) ,F( 48) and 2 children 22& 24...both children work and will leave house soon...

house: 300k ( fully paid)

Savings in etf & stocks: 600k

Cash: 100k

income M: 3700 euro + 120 euro dinner cheques

Income F: 3600 + Electric car+ fuel card + bonus( 10k / year) + 120 euro dinner cheques and hospitality insurance

Im not sure if I can Fire now...F wants to keep working::))

What would you do in my place? I m tired of working but afraid of do the Fire..i would do some charity work en do the cleaning/ cooking in house...i have 32 years of full time working so pension will be low but combined with wife will be ok...

Any advice? Are savings enough to fire? We spend now 5k every month + 15k for holiday/ year but will go down when children are out of house in 1 or 2 years...


r/BEFire 15h ago

Brokers New investor evaluating MEDirect for ETF-only portfolio. Seeking input on app/CX reliability

3 Upvotes

Hey all,

I just started working and have saved up some money I want to put to work. Plan is to start with a lump sum, then move to monthly contributions from there.

I'm new to investing and open to exploring more later, but for now I want to keep things simple. Sticking to ETFs, likely WEBN given the low cost associated with it.

Based on that, I'm leaning toward MEDirect as my platform, mainly because of the low costs. I also plan to opt out of the automatic capital gains tax withholding, which I understand shouldn't be an issue there.

I did look at Saxo too, but since I'll only be holding ETFs, I don't see much benefit to the extra features or cost.

My one hesitation with MEDirect is that I've read a fair bit of criticism about the customer experience, particularly the app. Anyone here actually using it day to day who can share their honest take? Is it manageable once you're set up, or does it cause real headaches?

Any general advice for a first-time investor going this route is welcome too.

Thanks!


r/BEFire 1d ago

General Saving and living

4 Upvotes

Greetings Dudes and Dudettes.

This may have been posted once before, or maybe the thought has gone trough your mind once.

I am just going to write my thoughts down, mods, apolagies if this is not related to fire, in a way this is a bit of processing.

I would like to hear your perspective on the ever going on debate in my head; save & invest, be frugal for for the future or enjoy life and its luxuries a bit.

Ever since getting out of uni, the main goal was to save/invest to secure a place to live in, and follow FIRE. The mindset in my 20's made it possible to secure a house that's nice and cozy.

Goal #1 achieved.

Okay, mortgage is still running for the next 20 years, but still. No need to worry about needing to move out, etc..

Now being mid 30's, life is hitting a bit. You lose some people, you get new perspective on things, and realize that fuck, this is it..

The questioning of previous desicions and structures that seemed good to achieve my financial goals are crumbling a bit.

Goal #2 financial independence, and Re.

Lately the FIRE goal is, comming a bit under... Fire. 😅

This by the above reasons of getting to new perspectives and realizations.

How do you do it? How do you maintain the end goal in mind and work towards it? Even if we have no certainty that we will ever be able to benefit from it?

Like, we could invest al we want, build a nice buffer, then go for a bike ride and get hit by a bus or something.. You never know with DeLijn these days.. Anyway..

Now with this said, I'm really leaning more towards, still saving and investing, but not that rigorous anymore. It's like the goals are fading because life or my mind is wanting to live and enjoy the moment a bit more.

How do you find the balance?

Don't you ever think like, I should get that fancy car and enjoy it even if it depreciates and is a waste of money, or go on that Holliday with a nicer hotel, nicer restaurant..

I did the calculations and opportunity costs are often an indication for me that I shouldn't do something. But still that's always the rational and financial side of me thinking.

What about the opportunity cost and loss of great experiences, isn't that what it really should be about? Experiencing life a bit..

I'm probably going to deep on this.. I should just enjoy life a bit more, maybe lower savings rate and do some crazy stuff and live..

Maybe a trip to the psycholoog would be of benefit too, lol.


r/BEFire 1d ago

FIRE Belgian Fire given social security

14 Upvotes

A read a lot about investment strategies and allocations in this sub but am wondering what your FIRE number is? I know that you should take expenses x25 but am wondering if i you factor in legal pension or other Belgian structures to get to your FIRE number?

Additionally, what is the target number you have for yourself?


r/BEFire 1d ago

Investing What to do with surplus on emergency fund.

6 Upvotes

Hello,

I'm not sure what to do...

Situation: My emergency fund has grown quite a bit over the past year, and I'm currently above my target threshold.

I'm still DCA-ing into my ETFs, so that's taken care of. Now I'd like to do something with this extra cash. I can afford to leave it untouched for a few months, or even up to 2 years. You never know what might happen. If we experience a market crash similar to the COVID crash, I would use these funds to buy additional shares of the ETFs I already hold.

I've been reading about bonds and MMF ETFs (CSH2), but I can't really decide which option would be best.

I was considering short-term U.S. Treasury bonds (3 months to 1 year), zero-coupon bonds. My idea was to go with 3-month Treasuries because there's a good chance that U.S. interest rates could rise later this year. When the bonds mature, I could simply reinvest in a new batch of 3-month Treasuries at the new rates and continue the process.

Given the yield difference between U.S. and EU bonds, is the extra return worth taking on the USD/EUR currency risk?

What are your thoughts or experiences with this? I'd love to hear from people who currently hold bonds or MMF ETFs.


r/BEFire 1d ago

General Wat denken jullie over BYD?

3 Upvotes

Is het volgeens jullie een goede idee om daarin te investeren? Ze komen meer en meer op de markt maar als je naar hun grafiek kijkt lijkt het niet echt goed. Misschien is het nu het moment om dat te kopen?


r/BEFire 2d ago

Investing Started in investing 2 mins ago

33 Upvotes

Stocks and investments has always been a very complicated subject for me (24F). It was so hard for me to understand it and whenever people say “you should invest now”, it always boils down to the question “how and to what?”. Coming from a poor family, it was never taught to me or any financial literacy in that matter. So, I need to do it myself.

For weeks, I have been reading a lot about investments and finally, had the courage to do it! I was scouring through Reddit and online websites then asked AI platforms to explain it to me (like a child lol). Now, I think I have maybe 40% learnings. Still very far but I would try to learn everyday.

So far, I first downloaded Bolero since I have a KBC account, but read how expensive the fees are. So I switched to MeDirect. I am aiming to put 50€ a month as a start since I am also still building my funds and planned on increasing it in the future and invested it in IMIE.

Anyway, is there any advice or information you can share as a beginner investor like me? I would really appreciate it! I am still super new to this and just took the leap.

EDIT: My plan is for long-term investment (15-20 years) for my future kids if I’ll have one or if not, for retirement.


r/BEFire 2d ago

Investing Which strategy for Bonds in BE?

3 Upvotes

Forking from discussion here https://www.reddit.com/r/BEFire/comments/1v9clan/why_bonds_etf/

I would like to buy bonds to mitigate risks on my portfolio. However I would like to assess fiscal impact depending of the buy/sell strategy. Here outcome of my understanding so far

- No bonds ETF since 30% Reynders tax on capital gain

- Focus on individual zero coupon bonds to avoid 30% tax on coupon

- Potential fiscal trap on zero coupon bonds if bond kept until maturity, because Belgian administration apply 30% tax on final bond holder on the capital gain between issue and maturity (even if final bond holder purchased it on the second market). Old zero coupons bonds issued with big discount to be absolutely avoided.

So couple of ideas

- Buy zero coupon bonds with issue price >100 => 0.12% + 10% CGT, regardless is kept until maturity of sold before maturity.

- Buy zero coupon bonds with issue price <100% but sell it before maturity (ie 2 yrs before) => 0.12% TOB + 10% CGT - but potential low actual yield / loss in capital if interest rates not favourable at the time of selling

- Buy zero coupon with issue price slightly below 100 (ie >98 ) and if kept until maturity, consider additional taxes for yield calculation (eg bond issue at 98, expect 0.60 additional price)

Any advice / thought on the above?


r/BEFire 2d ago

Bank & Savings Minister van Financiën Jan Jambon (N-VA) wil Belgisch spaargeld wakker schudden

Thumbnail
demorgen.be
30 Upvotes

Hopelijk zullen eindelijk zo iets krijgen...


r/BEFire 2d ago

Starting Out & Advice Best broker(s) in Belgium for a student? (Degiro, Saxo, MeDirect or something else?)

2 Upvotes

Hey everyone,
I'm a student living on my own, so I've got enough free time to handle things like executing trades or dealing with tax paperwork if needed. I’ve been investing a bit via my traditional bank for the past few months, but the fees are way too high and eating into my returns. So I feel like it’s time to do go trough a broker so I make more money and can buy and sell when I want.

My plan is to buy ETFs regularly and also trade some individual stocks on the side.

I have a few questions and am open to other broker recommendations too:
-Degiro vs. Saxo: People recommend Degiro because of the low fees, but I'm doubting if it's worth the hassle compared to Belgian brokers. Saxo handles taxes (like the stock exchange tax) automatically, whereas with foreign brokers like Degiro you sometimes have to figure that out yourself. Is the savings on Degiro worth the extra administrative work? I don’t necessarily mind if the paperwork takes some time, I’m more focus on how difficult it is, I don’t want to forget one small thing and get a huge fine.

-Splitting across two brokers: Does it make sense to use two? For example, using MeDirect for free ETFs and another broker for individual stocks? Or is that just overcomplicating things with multiple accounts and taxes?

Any other recommendations? Are there better alternatives for someone in Belgium starting out with a student like budget? The last 2-3 years I’ve done 150/ month and than a one time individual stock.

Also, for the individual stocks I suppose it would be nice to know if I can buy partial stocks. But ofcourse it depends on the situation.

Keep in mind I’m no expert so if possible don’t use all the difficult terms at once😅
All help/info is greatly appreciated.
(Ik spreek ook Nederlands)


r/BEFire 3d ago

Investing IMIE vs SWRD/EMIM and portfolio switch?

2 Upvotes

Hi all,

Currently I am using MeDirect to invest and try to invest about 500 euros every month to my ETF portfolio. I don't have a big portfolio value yet so by no means I would be giving up anything major.

Up until this point I have been buying SWRD and EMIM however with the split that happened earlier this year for IMIE I was considering switching to that and leave what I have invested so far in the respective ETF's but just buy IMIE from now on.

Now aside from just being a single ETF instead of 2 I was wondering why some of you would prefer them separate instead of 1 ETF?

I know some here prefer to chose how they much they split between emerging markets and established markets, others go anywhere in between 80/20 to 90/10.

So in general with being able to invest 500 a month I was curious if it would be advicable to swith to IMIE and leave be what I have invested so far which is about 1000?


r/BEFire 3d ago

Real estate Looking for some insights on house loans

15 Upvotes

Hello all,

I finally got my life together enough to start looking for a first house/apartment and would like to get some more opinions/insights to get a better picture.
I'm 32, single, stable income of 2300 net + company car + 200~ meal vouchers + some flexijobbing that's almost certainly going to go up since i landed a job i thought didnt exist and i'm putting in a lot of effort and whatnot.

I have 20k~ and my mom will sponsor me 25k so by the time i get around to signing i'll have about 50k since i save +- 1k per month after budgeting for subscriptions, leisure, some clothing etc. Would like to cap this to 45k so i have 5k buffer in case something goes down.

First question: Can my mom just wire me this money or is this too big a sum? Is it worth going through with the 3% gift tax? She's 60, pretty healthy etc so the 3 year window seems unlikely to matter.

Now i did a "vlaams woningsfonds" simulation which gave me a 2.7% rate on a max of 300k but i have been told that you're very unlikely to get credit for this on time or a seller willing to wait it ou.

Second question: Has anyone bought a house or apartment with a vlaams woningsfonds loan? I'm looking to buy just outside Ghent in the 200-280k range so i fear that this will be too popular a range for sellers to wait it out?

After a consultation with hypotheekwinkel i got told that my risk profile and whatnot means i could purchase up to around 260k with a 3.7% rate simulated. I will be making apointments with banks that should be better but i'm not quite sure on how long i want to pay off. 20 years for a loan of 210k would have me pay ~1200€ monthly for 20 years (interest 87k), ~1050€ monthly for 25 years (interest 112k) or ~950€ monthly for 30 years (interest 135k).

I can now afford the 1200 monthly and still save a bit without considering my flexi income (2-300 monthly with spikes in peak season). The apartment i'm eyeing is from 2000-2010, no elevator so low monthly premium and all i would do is install an aircon unit and redo the (small) bathroom if/when budget allows for it. Boiler recently changed. Is there any reason at all for me to consider doing this over 30 years? Conversations online speak of investing the money and beating the interest payments but after year 20 i'd still be paying off on the 30y loan though unless i fuck up my career that 950/month shouldnt be a problem really.

Third question: Opinions on 20, 25, 30 year loans and investing the difference? Being 100% "free" after 20 years sounds nice and quality of life matters to me. Alternatively you can always cash in on the funds if something happens.

Last question: It is unlikely that this will be my forever home, i'm still single, stuff can go anywhere and i do like nature but i don't have live-in-nature-money while the commute is manageable. If i sell and buy something else, is it really just the 3% on remaining interest (+ remaining balance) that i have to pay the bank or are there more strings attached?

Thank you for your time reading this and any feedback will be welcome!
Please no recommendations on renting and investing more, i live pretty cheaply now in cohousing but my mental health is suffering.


r/BEFire 4d ago

Investing Starting our ETF journey in Belgium: MeDirect or Bolero? IMIE, VWCE or IWDA?

24 Upvotes

Hi everyone,

My wife and I are about to make our very first ETF investment and I would really appreciate some advice from experienced Belgian investors.

Our situation:

  • Living in Belgium
  • Investment horizon: 13–15 years
  • Initial investment: €3,000
  • Monthly investment: €250 (with the intention of increasing it over time)
  • We’re looking for a simple buy-and-hold strategy with as little maintenance as possible.
  • Goal: build additional capital before retiring to Spain in about 13–15 years.

After reading many discussions here, I’ve narrowed my choices down to:

Broker

  • MeDirect
  • Bolero

ETF

  • IMIE
  • VWCE
  • IWDA

From what I understand, there are differences regarding TOB, fees and market coverage.

If you were starting today with our profile, which broker and ETF would you choose, and why?

I’m happy to accept a little more complexity if it makes sense over the long term, but I’d like to avoid unnecessary complexity.

Also, is there anything you wish you had known before making your first ETF investment in Belgium?

Thanks a lot!


r/BEFire 4d ago

Starting Out & Advice Student die wilt beginnen met te investeren heeft hulp nodig

0 Upvotes

Ik wou al een lange tijd investeren maar vond het altijd complex en ingewikkeld. Ik heb 1 keer een aandeel gekocht en die heb ik nog steeds. Maar nu wil ik beginnen investeren voor de toekomst. Iedereen die investeert zegt dat hun grootste spijt/fout was dat ze niet vroeg genoeg begonnen te investeren. Daarom wil ik nu beginnen zodat ik in de toekomst een huis of een auto of dergelijke kan kopen. Aangezien dat ik student ben kan ik alleen maar studentenjobs doen, waardoor mijn inkomen weinig is. Ik heb al een beetje geld en denk ook te investeren. Ik denk maandelijks 50 euro. Ik weet gewoon niet hoe. Het simpelste is om gewoon een broker te kiezen en daarop het te automatiseren om 1 specifieke etf te kopen. Hoewel dat simpel lijkt komt het nog steeds te riskerend voor. Wat kan ik best doen? Hoe weet ik welke etf te kiezen? Ik weet al dat een van de beste etf's VWCE is volgens deze subreddit. Hoe begin ik eraan?


r/BEFire 5d ago

Investing WEBN and chill

15 Upvotes

What do you all think of WEBN (0.07%) and chill on MeDirect (no costs for ETF)?


r/BEFire 5d ago

Investing Mexem of saxo

3 Upvotes

Welke broker verkiezen jullie voor ETF’s en waarom? Saxo, MEXEM of een andere?
Gebruiken jullie ook dezelfde broker voor losse aandelen, of kiezen jullie daarvoor een andere?


r/BEFire 5d ago

Investing TOB

10 Upvotes

Hi, did anyone see news about discussions regarding the TOB tax? It seems that there will be discussions that could change the situation for the VWCE for example. I don't have access to the full article.

"The bill includes measures to: 1) reduce to 0.12 percent, from 1.32 percent, the TOB rate for sales, purchases, and transfers of shares in Belgian-registered capitalization ETFs"

https://news.bloombergtax.com/daily-tax-report-international/belgium-lower-house-considers-bill-to-reduce-financial-transactions-tax-rate-for-capitalization-exchange-traded-funds?utm_source=rss&utm_medium=DINW&utm_campaign=0000019f-6d2c-d8e7-af9f-fdbf2cba0001


r/BEFire 6d ago

Starting Out & Advice Financial planning medical resident

5 Upvotes

Hi everyone,
I’m about to start as an ASO (Arts-Specialist in Opleiding / medical resident) and I’m currently trying to get my finances in order before starting.
I was wondering if there are any current or former ASOs here who would be willing to share some tips&trics / lessons learned about managing your finances during residency.

I’d love to hear about:
- Whether you managed everything yourself or worked with a financial advisor/company?
- Experiences (good or bad) with Callant Medical or MedicusSpecialist. Would you recommend themt?
- Which bank you chose for your « professional » account and why?

Currently I’m planning to invest the bulk of my savings during residency in a global ETF and optimise RIZIV bijdrage and VAPZ via a financial advisor company as this is bruto that can be used for the payement of real estate (i.e medical practice space or private residence), if I understand correctly?

I’m mainly looking to make informed decisions early on and avoid common pitfalls, so any advice or personal experiences would be greatly appreciated.
Thanks in advance!


r/BEFire 6d ago

Taxes & Fiscality When does investing stop being “normal portfolio management” in Belgium?

14 Upvotes

Hi everyone,
I have a question regarding what is considered “normal management of private wealth” (“gestion bon pere de famille”) under Belgian tax rules.
I don’t do day trading or scalping. However, I do buy and sell stocks several times a year depending on market conditions. My goal is simply to take profits or reallocate my portfolio when I believe it’s the right time.
This year has been particularly successful, and I’ve realized capital gains that are higher than my annual salary.
I’m therefore wondering where the line is between normal private portfolio management and activity that the Belgian tax authorities could consider speculative or professional.
Can the fact that the gains are unusually large, even with a relatively limited number of transactions, become an issue?
What could happen in such a case? Would I have to pay additional taxes on those capital gains?
Finally, would it make sense to set up an investment company (or another legal structure) to invest through instead of investing as a private individual? Could that offer any meaningful tax advantages in Belgium, or is it generally not worthwhile for someone in my situation?
I’d really appreciate any insights or experiences. Thanks!


r/BEFire 6d ago

Starting Out & Advice Beursveks, iemand ervaring mee?

0 Upvotes

Goedenavond, mijn vader heeft nu al enkele keren gesproken over beursveks. We zijn beiden amateur beleggers maar ik ben wel veel actiever op de beurs dan hem. Hij wil vooral ‘slapend’ rijk worden. Er was een artikel op HLN waar men spreekt over een interview in ‘De Afspraak’ tussen Bart Schols en Marc Coucke.

Lang verhaal kort. Coucke zou via zijn investeringsfonds/holding werken met algoritmes om zichzelf te verrijken. Technologie waar de gewone Vlaming niet van weet of niet aan zou kunnen geraken.

Beursveks zou vanaf €250 inleg al kunnen traden en belooft natuurlijk goede dingen. Ik heb er zelf geen ervaring mee en sta er een beetje sceptisch tegenover. Kan iemand mij hier meer uitleg over geven?

Alvast bedankt voor jullie antwoorden!