Details on my current portfolio

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I've been using my strategy for past 3 years. I've also been writing other blog about my journey in my native language, Finnish. For this blog, I am not going to repeat everything what has happened in last three years, but rather take a fresh start by explaining what I've been doing during those years.

My basic strategy is similar to what I explained on previous posts. On traditional investment funds, I use Finnish fund managing company called Seligson. It is the cheapest index fund managing company in Finland. For Americans, similar company is called Vanguard. Seligson offers both, passive index funds and actively managed funds. My main focus is on passive funds, but I also have few selected active funds to "spice up" my portfolio. I also have iShares S&P500 fund, which is traded on stock exchange.

My allocation

Currently my allocation stands as following:

• Seligson North-America 17.31% (passive, index)
• Seligson Asia: 7.58% (passive, index)
• Seligson Russian: Prosperity: 6.7% (active)
• Seligson Phoenix: 10.22% (active, special situations)
• Seligson Finland: 18.49% (passive, index)
• Seligson Developing markets: 13% (active, ultra-distributed)
• Seligson Europe: 22.01% (passive, index)
• Seligson Euro Corporate Bond: 1,39% (passive, index)
• Seligson Euro Obligation bond: 3.30% (passive, index)

S&P500 weight is currently so small, that I didn't put it into percentages.

My portfolio is over weighted on European markets, which I am slowly trying to fix. Seligson's index funds do not follow traditional market area indexes, like S&P 500. They follow "sustainability indexes", which means that they do not include companies, which are categorized as "non-sustainable". I do not want to mix ethics and investing, so for that reason, I am drifting over to ETF funds.

Few words about my active funds. Russian prosperity is actively managed fund, which invests all to companies based in Russia. Phoenix is actively managed fund, which seeks to find companies, ongoing a special situation, which makes their stock value drop drastically for short period of time. Examples of these situations are lawsuits, organizational changes and so on. Seligson Developing markets -fund is a feeding fund, which invests all their money to a large, ultra-distributed DFA Emerging Markets -fund, which normally is outside of scope for normal, private investor. Their portfolio consists of few thousand shares, all around developing markets. That is why I call it "ultra-distributed" fund. 

My bond funds are all allocated to Europe. Later on, when I start to raise my bond investment ratio, I will try to aim for broader geographical allocation. My bonds versus stocks ratio, is way below of my goal of 27%. Reason for that is mainly good returns on stock market. Interest rates in Europe are in all time low. Government bonds pay only ~1-3% interest, which is lower than inflation. I am waiting for interest rates to go up, before heavily investing on bonds.

On allocation by time, all of my purchases are made equally during 3 years. On most of my funds, the cost ratio for total costs is around 0.45%, which is way beyond my 1% goal. Only Russian prosperity, Phoenix and Developing markets exceed that. Russian prosperity is my most expensive fund, cost ratio around 2%. Phoenix has cost ratio of approx 1% and Developing markets has cost ratio of 0.75-1%.

Purchase commission on my funds is between 0 and 0.1%, except Russian prosperity, which charges 2%. Withdrawal charges are 0, for long time investors. I am pretty satisfied on my portfolio, especially the cost part. Later on, I will be expanding my ETF portfolio, and try to get my allocation towards my initial goals. All of my current funds are value accumulating funds, so they do not pay quarterly or yearly dividends. Reason for that is taxation. As I mentioned on my first blog post, Finland has 30% tax on capital gains. Value accumulating funds are exempt of this tax, before you decide to sell them all. For Americans, yearly dividends might be cheaper than value accumulating funds. On ETF funds, which I am going to buy, European ones are value accumulating and American ones pay quarterly dividend. That means 30% loss on every dividend because of taxation, but it provides opportunity to stabilize your allocation every time you get a dividend.

Please, do not take any of these examples as investing guide, but just an example, how you can build a personalized, index portfolio.