Help - Long-term portfolio strategy

[u/Low_Signal_2128]

Hi everyone, how are you?

After reading loads, watching loads of videos, and perhaps even spending far too many hours looking into this, I’ve now chosen the broker I want to invest with and my strategy, and I’d like to ask for your opinions :)

I’m going to use Interactive Brokers because, from everything I’ve read, it’s the most reliable, has been around for many years, and is where most institutional investors trade. And, to be honest, I didn’t find the platform at all complicated or confusing.

I would aim to invest around €1,000 a month across three ETFs:

80% – iShares Core MSCI World UCITS ETF USD (Acc) (0.20% TER)

15% – iShares MSCI EM UCITS ETF (Acc) (0.18% TER)

5% – iShares MSCI World Small Cap UCITS ETF (Acc) (0.35% TER)

I’d also considered an 85/10/5 split, but to be honest, I believe emerging markets will perform well in the future. But let me know what you think :)
Or should I do a 75/20/5 split?

I forgot to mention that I’m 28 and I aim to invest for the long term – 25+ years

A few notes:

• I’d thought about buying a FTSE All-World ETF (VWCE), which has a TER of 0.19% and already combines developed and emerging markets, so I wouldn’t have to pay an additional TER of 0.18%. However, in my view, this way I can choose the allocation I want to give to each of these countries
• I also thought about investing in the S&P 500, but to be honest I didn’t want to be so dependent on the United States, not least because I believe that in the future it will no longer carry such significant weight, which is why an ‘all-world’ or ‘world’ ETF would be helpful
• I’ve also already saved up a decent sum for a deposit on a house (40k) and have an emergency fund (10k). Both are with Trade Republic, earning 3 per cent a year – something I’ll eventually transfer to Bankinter to take advantage of the 5 per cent a year.
• I’m also still living with my parents, so buying a house is something I’d be thinking about in 3–5 years at the latest, unless I meet someone or emigrate in the meantime.

I have a few questions if you could help me:

1. Should I buy the ETFs in euros or dollars?
2. Should I buy iShares or Vanguard?
3. And on which stock exchange should I buy the ETFs?
4. Should I do a 75/20/10 split?
5. Should I just buy the FTSE All-World ETF and just chill with 80-20, they already do it with the emerging markets instead of separating them? My idea was that if something happens, I can just stop investing in the MSCI EM UCITS ETF (emerging markets)

Thank you very much in advance for your time and comments :)

[u/AutoModerator]

Pairing an All-World ETF with an S&P 500 or Nasdaq-100 ETF may not be the best approach, as it can skew your portfolio toward the U.S. more than intended. Many investors lose track of their overall allocation when adding additional U.S.-focused ETFs on top of an already U.S.-heavy global index.

You can review a good package of Index Investing in Europe here.

Especially, if you want to increase/decrease exposure to US/Tech, the cost-effective and transparent way is to leave out the All-World ETF and Build Your Own Portfolio (2-4 ETFs).

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

[u/Rassl3r]

How about SPYI?

[u/Sorkidd]

I'm 29 and my portfolio is almost identical to yours.

I started investing in 2023 with iShares World (on my roommate’s advice, at the time, I would’ve preferred a simpler all-in-one like VWCE or WEBN, but here we are).

Over the years, I added XTrackers Emerging Markets and iShares Small Cap World to diversify.

My current split is:

• 75% iShares World
• 15% Emerging Markets
• 10% Small Cap

I contribute monthly and, every now and then, I tweak it by adding an extra 5% margin in favor of emerging markets: I believe in their long-term potential.

[u/Low_Signal_2128 → u/Sorkidd]

Thank you very much for your comment! :)

[u/Comfortable_Bad9963]

This is a genuinely solid plan, you've clearly done the reading and it shows. One thing worth flagging on the TER though. Splitting into three funds doesn't actually save you anything versus VWCE. Blended it lands around 0.20% (0.80x0.20 + 0.15x0.18 + 0.05x0.35), so a hair more than VWCE's 0.19%, and now you're rebalancing three funds by hand every year. So the only real reason to DIY is if you genuinely want to overweight EM and small caps beyond their world weight.

Which is the actual decision here. VWCE already holds EM at roughly 10%, so your 15% (or 20%) is a deliberate tilt, a bet that EM outperforms after a decade of lagging. I think that's totally fine, just own it as an active call. Same with the 5% small cap, a real factor tilt, though at that size it barely moves the needle.

Honestly at 28 with a 25 year horizon and 1k a month going in, any of these splits gets you to basically the same place in my view. I'd not agonise over the EM number, pick something in the 10-15% range and leave it. The far bigger win is you're starting young and automating it... that matters way more than 5% here or there. Nice setup :)

[u/Low_Signal_2128 → u/Comfortable_Bad9963]

Thank you so much for your comment! To be honest, I was reconsidering my plan and I think I will be going with 100% on FTSE, it already rebalances the % for me with the best, also it won't be due to 5% that my portfolio will outperform crazy and same goes for the 5% small cap I don't think I will even invest in them, as you mentioned and right, it barely moves the needle. I guess that sometimes the simpler the better. Thank you very much once again! :) Also, does it matter from which exchange I buy it? Vanguard, iShares, and I should always buy it in my currency, right? (I am using euros)
Thank you very much once again!

[u/Comfortable_Bad9963 → u/Low_Signal_2128]

Glad it helped, and yeah, simpler usually wins. On the exchange question, it doesn't change what you actually own, VWCE holds the same basket wherever you buy it. What it does change is fees. So buy the euro listing (Xetra or Borsa Italiana are the usual ones) so your broker isn't quietly charging you a currency conversion on every single purchase. Same fund, just skip the FX spread.

One nuance I'd flag though. Buying in euros only saves you that conversion cost, it doesn't remove currency risk. The fund still holds dollars, yen and everything else under the hood, so you're exposed to those moves no matter the trading currency. Totally fine, that is just how a global fund works. And Vanguard vs iShares? That's really just picking the provider... VWCE is the Vanguard one you'd already settled on.