After 6 years and 1 month or 2243 days, I finally ended it. I ditched my active funds account at Beobank. While the performance was decent, it was nowhere near as good as my own portfolio or even the performance of the popular All-world tracker VWCE.
What is decent? Starting with €10,000 on 8 September 2015, my portfolio steadily increased in value, and in 2017, I added another €10,000.
Finally, at the time of closing on 28 October 2021, My investments accumulated to a closing value of €30,285.16 after tax on market transactions (NL: TOB). That’s a solid 51.43% total or 7.16% annual return.
My five fund portfolio
While I started with five active funds and ended with five. It wasn’t the same five throughout the 6 years I had this account.
In the table below you can find all funds, I held throughout the years and at what price I bought and sold them.
The difference of €19854.90 and the deposited €20,000 mentioned above is due to the number of shares bought by Beobank. While I transferred 20K to my Beobank investment account I had no control over the final amount purchased so not every euro was used to buy funds.
|Fund name||ISIN||Start date||End date||Initial investment €||Entry costs €||Final amount € (after TOB)||Total return €||Percentage|
|Frankin US Opps A acc EUR HDG CAP||LU0316494391||10/09/2015||28/10/2021||4,499.89||112.03||9,748.84||5,248.95||116.65%|
|Fidelity Pacific Fund EUR CAP||LU0368678339||10/09/2015||28/10/2021||6,499.84||141.72||10,334.30||3,834.46||58.99%|
|JPMorgan Funds Europe Equity Plus Fund A (dis)||LU0289228842||10/09/2015||15/03/2017||99.03||0 (converted to Accumulating)||0||–|
|JPMorgan Funds Europe Equity Plus Fund A (acc)||LU0289089384||15/03/2017||28/10/2021||3,483.37||0||4,524.90||1,041.53||29.90%|
|Robeco QI Emerging Conservative Equities B DIS EUR||LU0582532197||10/09/2015||28/10/2021||3,998.52||87.92||3,884.06||-111.46||-2.86%|
|La Française LUX ForumGlobRealEstateSecur R EUR D||LU1013051393||08/09/2015||22/03/2017||43.68||0 (converted to Robeco)||0||–|
|Robeco Capital Growth Funds – Robeco Sustainable Property Equities||LU0187079180||22/03/2017||28/10/2021||1,372.28||0||1793.06||420.78||30.66%|
Over these 6 years, I received dividends from time to time. While welcome, it was hard to reinvest them through Beobank, so I ended up just cashing them on 2 occasions. This does change the total return slightly to the upside.
Instead of €20,000 deposited and €19,854.90 actually used, in theory in only had €19,478.97 “invested” after withdrawing the dividends. Taking the dividends into account, my total return becomes 55.48% or 7.63% annual.
To put this return into perspective:
If I invested in the S&P 500 in September 2015 and stopped in October 2021, assuming I took an accumulating ETF, my return on investment would have been 156.01% or 16.71% per year. More than double the return!
So why did I invest with a bank knowing it would suck?
A brief history: why did I start this Beobank portfolio?
It was evident from the start that it was improbable my five actively managed funds would outperform their indexes or the S&P 500. So why did I even bother?
- It was the first time I invested a more significant amount in the stock market. Till then, I was busy trying to get rich quickly with Forex, which, as you might have realized if you follow this blog, didn’t work out.
- I wanted to detach some money from my personal portfolio to break the cycle of constantly getting rich through Forex. At that time, I was already with Beobank for credit cards I still hold:
- Beobank FlyingBlue Mastercard
- Beobank Visa cashback now Extra Mastercard
Thus taking the step to invest with them was smaller.
- I wanted to see what the real-world difference would be with my own money.
When I started this investment account in 2015, I was still in the becoming-rich-with-forex mindset. It was only 3 years later, in 2018, that I would give up on it completely. Having this separate account meant I would still gain from the ongoing bull run in the stock market.
Forex was the bane of my existence for a long time. Luckily I was able to drop it and move on. Another 3 years later, having matured more, I was confident I could manage this money better.
Comparing Beobank portfolio to Personal investments
While it’s not 100% fair to compare my portfolio to that of Beobank due to the distinct difference in management and type of funds, I still want to take a moment and look at the performance difference. Both are -in a sense- actively managed. One contains 5 professionally managed funds; the other is ‘managed’ by yours truly.
A clear-cut winner
It shouldn’t come as anyone’s surprise that my portfolio is miles ahead of my bank’s account. It’s not obvious just looking at total return, but take the total duration into account and the difference in the annual return is clear as day!
|Portfolio||Start date||End date||Total duration||Total return||Annual return|
One of the big downsides to the actively managed funds was the yearly expenses. At roughly 1.69% yearly, they always ate into my profits. A 2% entry fee for every purchase adds to the worse performance of the Beobank investment account. Even my bad decisions to buy Lemonade or Frequency Therapeutics barely put a dent in the performance.
Why I decided to stop it now
With my portfolio being a clear winner, it’s clear as day that investing in my Beobank portfolio’s active funds was pointless. Stopping sooner would have been preferable from a financial point of view.
The only reason I didn’t do it sooner was purely practical. I never felt like going to a beobank branch, as this was needed to close my positions. In hindsight, this has cost me a couple of thousand euros at least.
Another reason was already alluded to earlier. I have grown more confident in the strength and quality of my portfolio. In just 3 years and 7 months, it grew extremely fast to a point I couldn’t ignore it anymore, and the opportunity cost was getting too much.
Even before closing my Beobank account, I already knew what to do with the money.
Once my money was freed from the clutches of the active funds and the bank, I quickly transferred all but €285.16 to a new Interactive Brokers investment account!
A separate Interactive Brokers account for hyper-focused investing
I choose Interactive Brokers for their ultra-low commission and their renowned name in the business.
Opening an account was straightforward and similar in experience compared to other Belgian brokers. They required:
- Personal and contact information
- Income and tax residency information
- Information on trading experience and objectives
- Bank account information
Using my Belgian ID as proof of identity, Interactive Brokers approved my account within hours, and I could deposit my Beobank investment money.
The biggest downside to IB is probably that they don’t handle your country’s taxes. In my case, that means the tax on stock exchange transactions aka TOB (Taks op Beurstransacties). Luckily declaring TOB isn’t difficult. Thanks to a great Reddit post by user mdotinvested (2020) it only takes minutes.
Adequate. If I had to use one word to describe my whole experience in one word. Beobank provided a satisfactory service but at a high price. Too high. Knowing what I know now, having matured more in investments, I would not recommend going with Actively managed funds through a bank. This conclusion is not purely for the account of Beobank. I would advise against it for anyone contemplating engaging with a traditional bank/investor platform.
Eventhough Beobank provides satisfactory services, that doesn’t mean there aren’t any (major) grievances:
- A big annoyance I discovered while making this post was how convoluted the reporting of Beobank is.
It’s challenging to find all my transaction history. Even worse, I couldn’t find the exact sale and purchase documents of the JPMorgan Funds Europe Equity Plus Fund A (dis) and La Française LUX ForumGlobRealEstateSecur R EUR D. As a result, I can only assume some costs based on the portfolio overviews I received every quarter. I can’t even generate a report myself as I can with Interactive Brokers.
- To close my investment account completely, I had to go through the branch. Their investment portal layout is also very confusing and doesn’t invite me to invest myself. Though a bigger annoyance is that not all securities are available on their platform.
- After going through the branch, transactions take ages to go through. All of my transactions with Beobank took around 3 days before it was executed; this is ridiculously slow. Though after researching and feedback from readers I realize this is normal for this type of fund.
- For all of the above subpar experience, you pay a high cost. For all the funds I had I paid the following:
- 2% entry fee
- Of which 0.69% commission for Beobank
- 1.69% yearly running cost
- 0.00% exit fee (do have to give credit here, at least they don’t charge this)
- 2% entry fee
To be fair, these points are not specific to Beobank as they don’t really cater to investors. At least point 4 is inherent to working with banks and active funds. that alone is already reason enough not to go with any traditional bank for your investments.
- Interactive Brokers UK. (n.d.). Application. Interactive Brokers U.K. Limited. https://www.interactivebrokers.co.uk/Universal/Application
- /r/BEFire. (n.d.). Index/c5_what_about_taxes – BEFire. reddit. https://www.reddit.com/r/BEFire/wiki/index/c5_what_about_taxes
- /u/mdotinvested. (2020, December 26). Stock exchange tax declaration in Belgium – A tutorial. Reddit. https://www.reddit.com/r/BEFire/comments/kkj1lx/stock_exchange_tax_declaration_in_belgium_a/