Part 3 - Stocks
Written by Editor on June 6, 2026
TL;DR
The exact equity ETFs behind my 75% stock allocation: a 30% Market sleeve (US, ex-US developed, and EM) and a 45% Dividend & Value sleeve built around three funds. I chose to leave my US exposure unhedged - hedging protects in a strong-dollar year, but costs too much over time.
Selecting ETFs
This post is part of an 8-post series on the construction of my portfolio.
In part 1 I set my target allocation: 75% stocks (tilted toward Global Dividend/Value), 10% bonds, max 10% cash, 2.5%-5% gold. To turn my asset allocation into a working income stream, I need to select (part 2) and buy financial products. We start with stocks.
Please do not forget. Choosing between distributing or accumulating versions of ETFs or different funds can have taxation implications depending on your situation. A wonderful world of dry tax liabilities, dividend leakage, historical cost valuation and other fascinating concepts awaits you. Not in scope here.
Let’s take a look at some products.
Because I do not mind maintaining my portfolio and I am interested in the financial markets, I go for a granular design with a relatively large number of products for these two categories. If that is not for you, this post has a simplified version of my portfolio based on the same principles.
Market - 30%
Taking into account my extra conditions for currency allocation and regional allocation I started with a simple basis:
| ISIN | Name | TER | EU | US | Other |
|---|---|---|---|---|---|
| IE0006WW1TQ4 | Xtrackers MSCI World ex USA UCITS - EUR - ACC | 0.18% | 55% | 0% | 45% |
| IE00BYYW2V44 | State Street® SPDR® S&P® 500 EUR Hdg UCITS - EUR Hedged - ACC | 0.05% | 0% | 100% | 0% |
Table: ETF building blocks for market stocks
Then I compared the SPDR ETF to this unhedged version to check the differences:
| ISIN | Name | TER | EU | US | Other |
|---|---|---|---|---|---|
| IE00B6YX5C33 | State Street® SPDR® S&P® 500 UCITS - USD - DIST | 0.03% | 0% | 100% | 0% |
Table: ETF building blocks for market stocks
I used justETF’s comparison tool for this. Remarkable results. The hedged version does protect in years where the dollar appreciates in value, like 2025. But if you look at the Returns overview, hedging is downright expensive. You leave a lot of money on the table. So I decided not to hedge. This post gives some more info about hedging.
To tilt towards Europe and Asia + Emerging Markets and get closer to my target regional allocation, I use these two funds:
| ISIN | Name | TER | EU | US | Other |
|---|---|---|---|---|---|
| IE00BD45KH83 | iShares Core MSCI EM IMI UCITS - USD - DIST | 0.18% | 0% | 0% | 100% |
| LU2581375156 | Xtrackers Stoxx Europe 600 UCITS - EUR - DIST | 0.07% | 100% | 0% | 0% |
Table: ETF building blocks for market stocks
So, here we are for our setup:
| ISIN | Name | Weight | EU | US | Other |
|---|---|---|---|---|---|
| IE0006WW1TQ4 | Xtrackers MSCI World ex USA UCITS | 35% | 19% | 0% | 16% |
| IE00B6YX5C33 | State Street® SPDR® S&P® 500 UCITS | 45% | 0% | 45% | 0% |
| IE00BD45KH83 | iShares Core MSCI EM IMI UCITS | 10% | 0% | 0% | 10% |
| LU2581375156 | Xtrackers Stoxx Europe 600 UCITS | 10% | 10% | 0% | 0% |
| Total | 100% | 29% | 45% | 26% |
Table: Selected ETFs
Remarks- Look at the TER of the State Street® SPDR® S&P® 500 EUR Hdg UCITS. Extremely low for an ETF that includes hedging. As mentioned, unfortunately the real cost of hedging is in the returns.
- The EU part in Xtrackers MSCI World ex USA UCITS isn’t only Eurozone - UK and Switzerland make up almost 20% of that 55%. Because of this, the ETF only has +/- 30% real exposure to EUR.
- Similarly, STOXX Europe 600 covers Europe, not the Eurozone - including the UK and Switzerland (35% combined, non-EUR). STOXX 50 sticks to the Eurozone only, but I prefer this broader one. But again, it means giving up some direct EUR exposure.
- Average TER ~0.10%. Good.
Dividend & Value - 45%
This one I approached a bit differently. The basis is a value fund and the two largest world equity dividend funds in the UCITS space. Together they are by far the biggest part of this category. To make the regional weighting close to the target weight, I use a third fund. These three funds are in the table below.
| ISIN | Name | TER | EU | US | Other |
|---|---|---|---|---|---|
| IE00BL25JM42 | Xtrackers MSCI World Value UCITS 1C - EUR - ACC | 0.25% | 26% | 47% | 27% |
| IE00B8GKDB10 | Vanguard FTSE All-World High Dividend Yield UCITS - USD - DIST | 0.29% | 27% | 44% | 29% |
| NL0011683594 | VanEck Morningstar Developed Markets Dividend Leaders UCITS - EUR - DIST | 0.38% | 66% | 16% | 18% |
Table: ETF building blocks for dividend & value stocks
To nudge the regional weighting even closer, I could add funds like the ones below. I skip them for now to keep things simple - but feel free to use these as satellites.
| ISIN | Name | TER | EU | US | Other |
|---|---|---|---|---|---|
| DE0002635299 | iShares STOXX Europe Select Dividend 30 UCITS | 0.32% | 100% | 0% | 0% |
| LU0292095535 | Xtrackers Euro Stoxx Quality Dividend UCITS | 0.30% | 100% | 0% | 0% |
| IE00B652H904 | iShares Emerging Markets Dividend UCITS | 0.65% | 0% | 0% | 100% |
| IE00BYYXBF44 | Invesco FTSE EM High Dividend Low Volatility UCITS | 0.49% | 0% | 0% | 100% |
Table: Alternative ETF building blocks for dividend & value stocks
My chosen setup for this category:
| ISIN | Name | Weight | EU | US | Other |
|---|---|---|---|---|---|
| IE00BL25JM42 | Xtrackers MSCI World Value UCITS 1C | 45% | 11% | 22% | 12% |
| IE00B8GKDB10 | Vanguard FTSE All-World High Dividend Yield UCITS | 45% | 12% | 20% | 13% |
| NL0011683594 | VanEck Morningstar Developed Markets Dividend Leaders UCITS | 10% | 6% | 2% | 2% |
| Total | 100% | 29% | 44% | 27% |
Table: Selected ETFs
Remarks- Vanguard FTSE All-World High Dividend Yield UCITS and VanEck Morningstar Developed Markets Dividend Leaders UCITS may look similar but are quite different because they follow different indices. The Vanguard ETF is much broader.
- The TER of dividend paying equity ETFs is a lot higher than for the previous category. Some younger funds have a lower TER, but their small fund sizes make them unattractive. But this is something to keep an eye on.
- Regional allocation is close enough. Average TER is ~0.28%. A bit on the high side and something to guard.
- iShares Emerging Markets Dividend UCITS has a much higher TER than Invesco FTSE EM High Dividend Low Volatility UCITS, though both perform about the same and pay a quarterly dividend. Pity the Invesco fund is small (€250m, July 2026) because I prefer its broader index.
What is next?
These two categories are quite complex compared to the rest. So this was the hardest part! Next is part 4 which is about bonds.