Implementation · from Europe

Investing from Europe

Setting up the portfolio from France or Europe: life insurance, brokers, and the UCITS equivalents of US ETFs.

Why the backtest runs on US tickers

The signal is measured on price history, and that history has to be long, clean and total-return (dividends reinvested). US-listed ETFs have decades of it. The European UCITS instruments a European investor actually holds mostly don't — many are recent, and clean total-return series for them are hard to source. So the engine measures the signal on the US tickers, and the investor holds the matching UCITS (or, inside a life-insurance contract, the matching fund).

This is sound because the signal is a relative ranking, and a ranking doesn't depend on the currency it's measured in. Converting every price from dollars to euros multiplies each one by the same exchange rate on the same date; when the strategy compares assets to pick the strongest, that common factor cancels. A European investor watching the same assets in euros sees the same winner and the same monthly rotation. Currency moves the level of returns experienced, not their order — and order is all the signal uses.

Where the European instrument tracks the same index as the US ticker, only in another currency, the ranking carries over exactly. Where the closest available instrument tracks a related underlying rather than the identical one — the life-insurance contracts force this in a few sleeves — the proxy is still chosen on what it tracks, never on which version flatters the backtest (a faithful proxy can hurt the numbers as easily as help them). Those mappings are in the two sections below.

A proxy is still not the fund: tracking error, fees, the share class's currency, the roll yield of futures-based ETCs and counterparty structure all introduce drift. Replicable doesn't mean identical — it means the rotation an investor follows in euros is the one the dollar backtest measured.

European equivalents

EU regulations (PRIIPs / MiFID II) have blocked retail access to US-listed ETFs since 2018. European investors can replicate the strategy using UCITS-compliant instruments listed on Euronext, Xetra or the London Stock Exchange. The list below gives the closest equivalent for each asset in the production portfolio.

Availability varies by broker and country. The WisdomTree ETCs (AIGE, AIGA, AIGI) are structured as debt securities, not fund shares — check your broker's eligibility rules. Liquidity is lower than their US counterparts; use limit orders. These equivalents have not been backtested on this platform.

Life-insurance replicas of the US strategy

Four composite universes in the picker, under the Assurance-vie group, replicate the production 70/30 inside a French life-insurance envelope using only the funds those contracts list: 70% US equity (SPY+QQQ) + 30% real assets (world energy IXC and a broad-commodity basket, top-2 held, short-government refuge SHY on the commodity sleeve). Each simulation proxy is chosen to match the fund the contract actually holds, decided on the underlying — not the backtest: the held energy fund is broad, non-US energy (Spirit 2's is European, STOXX 600 Energy; Swiss Life's is world energy), so the closest listed proxy is world energy IXC, not US XLE; and the broad-commodity fund is an equal-weight, ex-agriculture Bloomberg energy-and-metals index, so we model it with an equal-weight blend of energy, gold, silver and base metals rather than the energy-heavy DBC (which keeps agriculture and over-weights oil).

Comparable wrappers exist in most European countries — Luxembourg life insurance with its "security triangle", Belgian branch 21/23 contracts, Portuguese seguros de capitalização (with a holding-period logic close to the French "8 years"), Italian polizze vita, the Swedish kapitalförsäkring — each with its own duration, tax and protection rules. The replication logic described here carries over: adapt the strategy to the catalogue of the wrapper you hold, rather than the other way round.

The tables below map each held fund to its US simulation proxy. Where the proxy is a composite, no single US ETF tracks the fund's underlying, so it is built from several US ETFs at fixed weights, rebalanced monthly — an equal-weight energy-and-metals basket for the broad-commodity sleeve.

The four contracts below are the ones the form can clone. For each: the reference contract — the one whose catalogue drove the mapping — where it is taken out, and its operational parameters. Two contracts from the same insurer offer NEITHER the same catalogue NOR the same conditions: check each holding (ISIN) and the general terms of your own contract. We have no commercial relationship with these brokers or insurers.

For a monthly-signal clone, two operational parameters weigh as much as the catalogue: the cost of rotation (arbitrage and transaction fees, charged on each reallocation) and the DELAY between the arbitrage order and its value date — every day of gap between the signal and execution is a source of divergence from the reference strategy. The cards below summarise these parameters, as recorded on the date shown: the general terms in force prevail.

All four are honestly labelled replicas, not diversifiers: they run the same momentum logic, the same sleeves, and the same defensive discipline as the production 70/30, so their monthly returns track the US account closely. They put the same bet in a second, tax-advantaged envelope — useful for sheltering the strategy, not for decorrelating from it. They are read-only here and never traded.

Accessing US ETFs from Europe

A European investor who wants to replicate a strategy built on US-listed ETFs quickly runs into a regulatory wall. Under the PRIIPs regulation, a US ETF that does not publish a "key information document" in the European format cannot be offered to retail clients by European brokers: neither IBKR Ireland, nor DEGIRO, nor Trade Republic will let you buy a SPY or an IWF. This is not a limitation of your broker — it is the European rule.

The remaining route is a broker operating under the US regulatory framework that accepts non-US residents. Two examples: Alpaca, which combines a full API — suited to programmatic execution like the one described here — with a pleasant web interface, and tastytrade, a well-established platform that also offers an API. Both provide modern interfaces and commission-free trading on US stocks and ETFs, with no custody fees — to be tempered, for a euro-based investor, by the currency-conversion costs (EUR↔USD) on the way in and out. Eligibility, however, depends on your country of residence (most EU countries yes, Canada no, for example), to be checked case by case.

An often-underestimated advantage: protection in the event of broker failure is markedly higher under the US regime. SIPC covers securities up to $500,000 per client (including $250,000 in cash), and several brokers — including Alpaca — add "Excess SIPC" coverage running into the millions; on the European side, the directive's guaranteed minimum is only €20,000 per investor (raised to €70,000 in France, £85,000 in the United Kingdom). One essential clarification: under both regimes your securities are segregated and remain your property, returned even if the broker fails. These guarantees cover fraud or a failure to return assets — not market losses.

That leaves funding. Sending dollars to a US broker from a euro account is often slow, costly, and tends to trigger scrutiny from banks. The tool that unlocks this is Wise, which provides genuine US bank details (account number + ACH routing number) in your name: the broker then receives the transfer as a domestic, first-party deposit — local, fast, usually free. The process is identical at Alpaca and tastytrade: you link your Wise USD account exactly as you would link a US bank.

To reconstruct those euro capital gains — the weighted-average cost basis converted at the exchange rate of each operation — this site has a client-side tool: the multi-currency cost basis calculator (nothing leaves your browser).

Two jurisdictions

Holding the US leg at US brokers and the European replica in domestic wrappers is not only a tax matter: it splits the portfolio across two legal systems. The point is not immunity — it is a cap. No single jurisdiction's emergency measure can freeze everything at once.

Each side carries its own tail risk. In France, the Sapin 2 framework allows authorities to suspend withdrawals — and even internal arbitrages — on life-insurance contracts during a systemic crisis; US accounts know nothing of it. Conversely, measures affecting US accounts would leave the domestic layer untouched.

The asymmetry matters. A European investor lives in euros, so the survival layer — cash buffer, guaranteed funds, domestic income — belongs on the home side of the border. A freeze abroad can be waited out; a freeze at home is the one to design against.

The weak link is the bridge itself: transfer rails (e-money institutions, FX services) carry no deposit guarantee. Treat them as pipes, never as vaults. The failure of one provider, though, is recoverable in degraded mode — direct wires between a broker and a domestic bank do work, at the price of friction and questions from the bank — and a named US bank account can be opened with some effort.

More importantly, living off the foreign side does not actually require transfers at all. A payment card issued on a foreign account spends those funds directly at a European checkout — the card networks convert at the point of sale, with nothing to repatriate. A working card on each side of the border is what keeps daily life running when transfers turn slow; transfers can wait, groceries cannot.

True capital controls are a different animal: they can constrain every rail at once, and no new account bypasses them. That is the final reason each side of the border must be able to live on its own for a while — the survival layer at home, a spendable layer abroad. The price of the US leg, finally, is its estate-tax exposure, covered above.