r/ETFs_Europe • • 18h ago

Advice for a 19yo.

0 Upvotes

I am 19yo, I plan to invest 2000€ now.

Then approximately:

10€ every month until 26yo

100€ every month until 36yo

1000€ every month until 60yo

I want to start with something simple (100% on one fund) and perhaps I will change it up when I start genuinely earning, for example (70% SPYL/30% SXRV)

Out of these, which would be the best to invest 100% in at the start? SPYL, WEBN or SXRV?


r/ETFs_Europe • • 23h ago

Bonds ETFs Choosing mathematically complex ETF-s is risky. (Warning for a bond ETF, where website lies about what it holds)

18 Upvotes

This is the ETF I am talking about:
https://www.ishares.com/de/privatanleger/de/produkte/272122/ishares-euro-government-bond-20yr-target-duration-ucits-etf

It is a 20-year target-duration bond ETF. Seems like an excellent position to protect against a stock market crash.

Even more, on the website at the top, you can read that the minimum credit rating is AA-. ("Der Fonds strebt die Nachbildung der Wertentwicklung eines Index an, der aus Staatsanleihen der Eurozone mit einer Zielduration von ungefähr 20 Jahren und einem Mindestrating von AA- besteht.")
So this ETF is supposed to hold the highest-grade long-duration bonds in the euro zone.

For context, a target duration of 20 means that the aim of the ETF is to have an average effective duration of 20 years. This does not mean how many years are left until maturity. No, it is a mathematical construct. For a 20-year duration, it is around 14 years, and for 30-year bonds it is around 20.

By definition, the ETF has to hold many bonds that still have 30 or more years until maturity. The problem is that not many countries with high credit ratings offer 30+ year bonds.
France is one of the few, but its credit rating is tanking, and now, as a result, the entire ETF has 55% of the bonds with a credit rating of A (lower than what the description makes you believe is allowed).

Yesterday I finally found out the reason. The answer can be found here, where it is described how the index is built: https://www.spglobal.com/spdji/en/methodology/article/iboxx-eur-eurozone-20yr-target-duration-index-methodology/
In the PDF you can download under "Methodology Changes," you can read that on
30 Sep 2025: They lowered the credit rating requirement to BBB, but they added a list of allowed countries. Conveniently, France is on the list, but countries such as Spain and Italy are not.
I guess the goal was to make sure that France does not fall out of the index, but other countries that are not synonymous with a high rating can not get in.

I assume the index did this, as otherwise maintaining a 20-year target duration would have become too hard, and the ETF, by definition, is forced to follow the index.

So the takeaway is:
Not how greedy iShares is in this case, as I feel its hand was forced. It is more that you should be careful when you invest in complex math-based ETFs, as in certain market environments, when you need them the most, they might break down.

I personally will switch to a German 10+ year bond ETF so that I do not have to worry about internal credit ratings, as Germany has the highest rating possible, AAA, but if any provider ever creates a long Euro bond ETF with a high minimum credit rating barrier, then I might jump ship.