Ask HN: How to invest safely in Europe? • Hacker News Board

Re: Ask HN: How to invest safely in Europe?

#21

Post by user5994461 » Sun, Jul 28, 2019, 1:25 PM UTC

viraptor wrote: post #14

jacquesm wrote: post #7

Earlier quoted context omitted.

There is an exchange risk inherent in that which will turn your real estate speculation into a currency speculation.

Not sure if these are available in Europe, but Vanguard in Australia offers hedged indexes like this one https://www.vanguardinvestments.com.au/retail/ret/investment... specifically to avoid the currency exchange floating.

Vanguard doesn't really exist in Europe per se.

They have a range of funds in GBP in the United Kingdom, because the retirement system there is similar to the US. That's all.

There is a handful of funds in EUR through an European subsidiary, but it's laughable compared to what is available in the US and they are pretty hard to buy.

Re: Ask HN: How to invest safely in Europe?

#22

Post by hrydgard » Sun, Jul 28, 2019, 1:29 PM UTC

Probably depends on the country. In .se for example with any bank you'll be able to buy ETFs that are index funds that invest in the US, Europe or Asia markets with a yearly fee of 0.20% or less. Those will give you pretty much what you are asking for. Talk to your bank and ask for index funds and don't accept higher fees than 0.25% or so (depending on country, again).

Re: Ask HN: How to invest safely in Europe?

#23

Post by mruts » Sun, Jul 28, 2019, 1:35 PM UTC

Is there any reason why you want exposure to Europe in the first place? Maybe you just want American equity exposure without the currency risk? If so, you might be interested in ETFs that attempt to track the S&P 500 EUR Hedged Index. One ETF that does this is called theiShares S&P 500 EUR Hedged UCITS ETF.

I would not recommend European government bonds as most of them have real negative rates.

Is there any reason why you don't want just pure straight up American equity exposure? There's no reason you couldn't be buying American listed equities from Europe.

Re: Ask HN: How to invest safely in Europe?

#24

Post by mruts » Sun, Jul 28, 2019, 1:38 PM UTC

register wrote: post #10

emerongi wrote: post #6

Why do you want to invest in Europe specifically? There are European ETFs that track US indexes if that's what you're interested in. Europe is a harder market for sure. There are less internationally recognized names, so you have to do more research.

Because I don't want to deal with exchange rates risks as Jacquesm already pointed out.

There are euro hedged S&P 500 ETFs. One of them is this:

https://us.spindices.com/indices/equity/sp-500-eur-hdg

But, if I may ask. What is the specific reason you don't want currency risk? The dollar has maintained it's strength since the recession and if there's a currency pair where one might not need to hedge, it would be USD/EUR.

Re: Ask HN: How to invest safely in Europe?

#25

Post by nairobi222 » Sun, Jul 28, 2019, 1:50 PM UTC

There are euro hedged S&P 500 ETFs. One of them is this: https://us.spindices.com/indices/equity/sp-500-eur-hdg

But, if I may ask. What is the specific reason you don't want currency risk? The dollar has maintained it's strength since the recession and if there's a currency pair where one might not need to hedge, it would be USD/EUR.

Re: Ask HN: How to invest safely in Europe?

#26

Post by lrem » Sun, Jul 28, 2019, 1:59 PM UTC

barry-cotter wrote: post #18

register wrote: post #10

Earlier quoted context omitted.

Because I don't want to deal with exchange rates risks as Jacquesm already pointed out.

Deviations from purchasing power parity in currencies have a half life of seven years. Unless you’re investing for the short term the effects of currency fluctuations on returns to your portfolio will be swamped by differences in growth across national economies and their stock exchanges’ growth rates. In the long run currency risk washes out in differences in economic growth. You’re better off investing in the stock…

On a particular point: the number of vacant properties in Switzerland has exceeded the population of the capital. The safe property investment idea got too popular to stay effective.

Re: Ask HN: How to invest safely in Europe?

#27

Post by scribu » Sun, Jul 28, 2019, 2:12 PM UTC

BjoernKW wrote: post #20

Why do you want to invest in the European stock market specifically in the first place? There's nothing that keeps non-US citizens from investing in US market ETFs. That said, European economies are quite diverse. There are ETFs for the European market as a whole (Euro Stoxx 50, for instance) but they tend to fare worse than their national counterparts. In addition to simply investing in US ETFs you might consider in…

> There's nothing that keeps non-US citizens from investing in US market ETFs.

Actually, there is. Unless an ETF provider publishes key investor information documents in the format required by the EU, EU citizens are not allowed to buy those ETFs.

Since 2018, I have a number of US ETFs that I can no longer buy. I have to search for alternative UCITS funds instead, which are neither as diverse nor as large.

Re: Ask HN: How to invest safely in Europe?

#28

Post by AlchemistCamp » Sun, Jul 28, 2019, 2:26 PM UTC

scribu wrote: post #27

BjoernKW wrote: post #20

Why do you want to invest in the European stock market specifically in the first place? There's nothing that keeps non-US citizens from investing in US market ETFs. That said, European economies are quite diverse. There are ETFs for the European market as a whole (Euro Stoxx 50, for instance) but they tend to fare worse than their national counterparts. In addition to simply investing in US ETFs you might consider in…

> There's nothing that keeps non-US citizens from investing in US market ETFs. Actually, there is. Unless an ETF provider publishes key investor information documents in the format required by the EU, EU citizens are not allowed to buy those ETFs. Since 2018, I have a number of US ETFs that I can no longer buy. I have to search for alternative UCITS funds instead, which are neither as diverse nor as large.

That's not a problem for non-US citizens in general. It's a problem the EU imposes upon its own citizens.

Re: Ask HN: How to invest safely in Europe?

#29

Post by sprash » Sun, Jul 28, 2019, 2:51 PM UTC

How about don't.

Europe is in huge decline right now. Asset prices are artificially inflated, bond yields are negative and the export surplus can only be maintained because the Central Bank is devaluing the currency by printing money like there is no tomorrow. The house of cards will fall as soon as some major trade partner introduces tariffs.

The demand for credit is especially weak which shows you that nobody really wants to invest, because the future outcome is presumed to be worse than paying negative interest to the ECB.

Bedsides that there are major societal turmoils on the horizon. Crime is rampant, the quality of life for the middle class quickly decreasing and there is a huge demographic decline going on for some time now. Large youth unemployment in the periphery and a real estate bubble with stagnating wages in the center which boils away the middle class only shows you what the future will bring.

In the best case this will be like another Japan. In the worst case there will be civil war.

Re: Ask HN: How to invest safely in Europe?

#30

Post by seppel » Sun, Jul 28, 2019, 2:52 PM UTC

scribu wrote: post #27

BjoernKW wrote: post #20

Why do you want to invest in the European stock market specifically in the first place? There's nothing that keeps non-US citizens from investing in US market ETFs. That said, European economies are quite diverse. There are ETFs for the European market as a whole (Euro Stoxx 50, for instance) but they tend to fare worse than their national counterparts. In addition to simply investing in US ETFs you might consider in…

> There's nothing that keeps non-US citizens from investing in US market ETFs. Actually, there is. Unless an ETF provider publishes key investor information documents in the format required by the EU, EU citizens are not allowed to buy those ETFs. Since 2018, I have a number of US ETFs that I can no longer buy. I have to search for alternative UCITS funds instead, which are neither as diverse nor as large.

To my knowledge, EU citizens are still allowed to buy those ETFs, but EU brokers are not allowed to sell them. This means you can open an account at a non-EU broker (e.g. in Switzerland) and still buy them. This is perfectly legal, although it is a bit more work taxwise.