3a solution from Finpension

Has anybody been able to figure out figures like the dividend yield and the total number of holdings for each of the funds at Finpension?

The factsheets show only if a fund is accumulating or distributing but it doesn’t state the percentage. Also, the factsheets show the top 10 holdings but not the total number of holdings.

Yes they changed factsheet format in July. Before everything was there. Look at factsheets of corresponding MSCI indices, the replication should be pretty exact.

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Finpension looks interesting. Does it or VIAC have a stop-loss option?
Thank you

  1. Of course not, there are funds traded once per week.
  2. Stop-loss is of no use for a long-term boglian investor. If market crashes, you buy more.
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I’m kinda glad they don’t, that’s the best way to teach people not to gamble with their pension money :slight_smile:

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Note 2: as it was pointed by respected forum members, the tax advantage actually exists for US and Japan stocks only, which are available as separate funds. So to maximize the tax advantage, one should allocate money deposited at finpension to US (better situation than Irish ETFs) and Japanese “Pension Fund” equity funds.

Therefore soon I will be 99% US at finpension.

I don’t think it’s just US and Japan. For one, you definitely get the same tax advantage for Swiss stocks as in 3a you’re exempt from Swiss withholding and income taxes. UK generally doesn’t levy withholding taxes on dividends, as far as I can tell, so you get the same tax advantage.

Australia and Canada also waive taxes on dividends paid to pension funds according to the double taxation treaties. And there may be other countries. However, I don’t know whether the CSIF pension funds can/do benefit from this.

Overall I estimate the remaining withholding taxes in 3a to be fairly small compared to the income taxes you save with 3a. I.e. I wouldn’t bother with making the investment strategy more complex given that you don’t pay withholding taxes for presumably the 4 largest allocations in typical Swiss strategies (and there are also non-reclaimable withholding taxes for both US and IE world ETFs). It’s noise compared to various other decisions. Or am I missing something?

Yes, therefore you don’t have to put them to 3a.

Same here.

0% withholding tax.

Maybe, but I haven’t seen anything about it.

Maybe one thing: for a “correctly” geographically weighted portfolio you need a lot of US!

I don’t understand. From a tax perspective US and Swiss stock are the same with regards to the difference between 3a and taxable assets. You have to pay full income taxes (and no non-reclaimable WHT) on dividends outside 3a and no income taxes (and no WHT) at all on dividends in 3a. That’s assuming you invest in US stock via US ETF with a qualified intermediary broker and in Swiss stocks directly in Switzerland. Also assuming you can claim back the full 15% via DA-1 (i.e. your effective income tax rate is high enough).

Thus, I don’t see why US stock would be better in 3a and Swiss (and Japan, UK, maybe others) stock wouldn’t.

In this case there is no difference. However lots of people have concerns about keeping a huge part of own wealth in US ETFs.

Of course for 3a products you are also not taxed on dividends, but considering that US stocks pay less dividends than stocks from other (developed ?) countries, you don’t win here.

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Disclaimer: I am no tax expert and others here are way more qualified than I am to talk about these topics. I also don’t know Finpension funds which I haven’t studied at all.

So let me get this straight:

MSCI USA has a dividend yield of 1.29% - while MSCI Europe has 2.44%.

So you’ll optimise the tax advantage by

  • going 99% US in pillar 3a, thereby saving 15% withholding tax on every 1.29$ paid out and not “not paying” income tax on 1.29% dividends.
  • …while shifting your European holdings to a taxable account and paying income tax (at which rate) on a higher 2.44% dividend yield?

PS: I won’t dispute that one of the quotes above suggesting pension fund funds for US exposure was from myself - it just doesn’t seem though-through if/when this increases your share of higher dividend-yielding funds in taxable accounts… :wink:

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Well, you are right!

Purely from costs and taxes point of view one should do exactly the opposite - keep only Europe+Japan in 3a and maximize US at IB. But this move is more of a tactical nature. One of the issues is the potential loss of access to US ETFs. Second is that I committed to buy certain developed markets ex US ESG ETF, which wouldn’t be possible if 1 comes true. So I want to buy as much as possible of it now, and for this I increase US allocation in 3a and decrease at IB. If 1 comes true, it would be easy to increase US allocation at IB via options and decrease this allocation at IB. Not very straightforward, but these are my thoughts now.

I noticed that all or most of the index funds offered by Finpension (Index funds – finpension) are accumulating. So in that case, does the dividend yield really matter? I must be missing some point here…

Dividends, actually received or implied, are being taxed as an income anyway.

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So looking at the index funds available at Finpension one could go for the following fund I suppose?

CSIF (CH) I Equity Europe ex CH ESG Blue ZB CH0507420005

There is also a non ESG variant but seems to perform slightly worse YTD. Note that the ESG one is new so there is no data for previous years in order to compare.

@Dr.PI

Dividends, actually received or implied, from funds held in a 3a account are not taxed.

Yes. But they would be taxed if you keep the same geographic segment in a taxable account.

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And yes, in case of tax-sheltered funds it makes even less difference if they are distributing or not. Different things got mixed up in a discussion.

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There is now MSCI Canada, a normal and a ESG one, at finpension. A self-made MSCI World ex USA ex CH can be done even more precisely.

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