Strategy for investing in ETFs with high brokerage fee

Question

I've been investing in ETFs according to my strategy for almost a year; everything looks good but one thing bothers me.
My local stock exchange offers only three ETFs (tracking S&P, DAX and WIG20). That's not enough for my investment / diversity goals, hence I also buy ETFs from NYSE / NASDAQ (REITs, small caps and bonds). However, the brokerage fees are significantly higher for the foreign markets:

Local mkt fees: 0.29% of transaction, min. ~$1
Foreign mkt fees: 0.29%, min ~$10

Now, I've been buying foreign papers every other or third month to minimize the effect of fees. Unfortunately, the analysis showed that the fees were still robbing me of (potential) returns rather significantly. Moreover, if I have three US ETFs and buy one of them every three months in a round-robin fashion, that means each ETF is being bought only once every nine months!
That sounds like bad dollar-cost averaging strategy.

I had considered buying local mutual funds instead and have run a simulation. Turned out that just after two years I would be better off buying foreign ETFs - the funds have much higher management fees than ETFs!

So, to sum it up, what would be the best strategy / approach to:

• Achieve:
  • Diversity, both geographical and asset-class
  • Good DCA (dollar-cost averaging)
  • Low management fees (I'm thinking long-term)
• Evade:
  • High purchase / sale fees that diminish my returns

Answer 1

By purchasing ETFs you are achieving one of your goals: Low management fees. ETFs are notorious for keeping these fees low. However, they do also offer one problem that is not present with mutual funds: dividend and capital gain reinvestment is not automatic or fee free. Can you save up, purchase US mutual funds that mimic your ETF goals that also have lowish management fees and then reinvest distributions? That would save some transaction costs.

I really don't see a problem with the dollar cost averaging once per month as long as your goals are long term. If it were me, I would save up about $3500, then purchase the next ETF on my list.

Your cost are not that out of line with what we experience here in the US. My broker charges $7.95 for most ETF trades. Now, it is possible to develop a relationship with a broker in which you can get a certain number of trades for free. You may want to see what customer service can do at your broker or a competitor. Having a high balance helps in this regard.

Another thing you could do, and is something I often did, is get a side hustle to generate at least $120 per year. This would cover your ETF purchase fees. It is silly, but physiologically it made this kind of thing easier to accept for me.

When one just gets started in investing it is exciting and wonderful. However understand that this is a marathon not a sprint. Sticking with your plan these fees will be meaningless in 20 years.