Ask HN: How to invest safely in Europe?

- the same principles apply regardless of the market, you can just pick European equity or bond funds and add them to your portfolio (as long as they're available on your investing platform)

- you don't have to limit your portfolio to US and/or Europe, you can invest internationally

- historically the European markets have performed worse than the US. That won't necessarily continue in the future but keep in mind that you're making a similar assumption (that the future will be similar to the past) when you expect a 6-7% return from American funds.

- many of the the big US companies are international anyway - for example when you buy Apple stock, even though you're investing in an American company, you're betting on Apple's performance everywhere in the world including in Europe

- investing in companies that are traded in a different currency adds another moving part to the machine; you can be hurt or benefit from the movement of the exchange rates in addition to the stock/bond price fluctuations

Europe is a harder market for sure. There are less internationally recognized names, so you have to do more research.

To some extent this is also why it is much harder to run a successful start-up in the EU.

- MSCI Europe Custom ESG [1]

- Barclays Euro Govt. Bond [2]

Please note Meesman offers a very limited selection of funds (5 total). As such I am quite sure the Meesman company did good research on what funds best represent certain markets.

If you'd like to invest in the European markets, I suggest you take a look at both. These funds can be bought elsewhere as well, of course.

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[0]: https://www.meesman.nl

[1]: https://www.blackrock.com/lu/intermediaries/products/305363/...

[2]: https://www.blackrock.com/lu/intermediaries/products/228477/...

https://www.mintos.com

But in any case, there's no reason why you can only invest in European things (and in fact that would be stupid). The starting strategy for most people should be a mixture of index funds covering the whole world (weighted by market size) and bonds. The proportion of stocks/bonds is determined by your tolerance for risk. You can fiddle with this (for instance as a European it might make sense to overweight European markets because of exchange risk, on the other hand you might prefer to overweight American markets because you already have exposure to the European economy from living there) but you almost certainly want to invest somewhat internationally.

I'd forget bonds personally. With negative real interest rates, bonds are just the safest way to lose money slowly.

You mention elsewhere you want to avoid currency risk in an ETF. You won't be able do that completely, but to keep it to a minimum you'd need an ETF composed of smaller European companies which have less of an international presence.

I'm unexpectedly in the market for a good European ETF myself as the provider of the two I currently hold (iShares) have just announced they're both being delisted, so I'll have to sell those and re-buy something else, with all the cost and risk that entails, which is pretty annoying. I'm currently considering the "iShares Core MSCI EMU UCITS ETF", which tracks 252 Eurozone companies, but again, these are generally big multinational companies so you're not really protected from currency risk.

There are three problems broadly speaking. First is the currency, American index funds are in dollars while you don't have dollars. There are a couple of index funds that are quoted in EUR/GBP, above.

Second you need to find a bank that offers trading accounts and allow to buy these. It is god awful to find one. European banks are simply disconnected from the stocks market, they don't run brokerage and might not even know what it is when you ask for it. The only thing they sell and know about is their shitty in-house investment plan that's losing money every year.

Third is taxation. American have lax taxation because it's local and they depend on it for their retirement. On the other hand Europe can have high taxation which really kills your profit and some classes of assets have dual taxation (US export + EU taxes) that makes even the best investment worthless.

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 investing in European ETFs that reflect strong national markets. However, investing in European markets probably requires more research and market knowledge than the fire-and-forget approach US-based ETFs are famous for.

National NASDAQ equivalents such as TECDAX might be interesting, too. Keep in mind, though that these typically are much more volatile than NASDAQ because these indices don't comprise tech giants such as Amazon or Apple but much smaller companies which often are unknown to the general public but in many cases still are market leaders in their respective categories. Therefore the risk higher is higher - but so is the potential return.

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.

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.

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.

A reasonable investment strategy involving ETFs will involve investing in companies throughout the whole world. Not just European companies or US companies. Ideally you want to have an investment strategy that maximizes return for your risk profile. That strategy is independent of where you live. There are S&P 500 ETFs in the US and there are S&P 500 ETFs in the EU (try googling for "S&P 500 UCITS ETF").

> At the moment the safest bet seems to park money in monetary/government bonds that however don't return more than 1.5% on average. The "good ETFs" you mentioned that have a 6-7% return are anything but safe. They aren't as "safe" as bonds. the "good ETFs" you mentioned likely invest in companies, the stock market has a high degree of risk and volatility. That is fine in the sense that with greater risk comes greater reward. You should just keep in mind that if you want something safe you shouldn't be looking at anything that invests in equities.

> Can somebody provide some suggestion references about good investment strategies with a low risk profile in an european context? I've written a lot about it on my blog: https://indexfundinvestor.eu/2019/05/29/the-step-by-step-gui... I also have suggestions to books there.

VEA gives you exposure to European Developed Markets (equity). FEZ is the Euro-Stoxx 50 (equity)...