That’s what I’ll end up doing likely (short of moving everything to finpension) - although not perfect.
The ultimate goal however is to not do All World (e.g. VT) replication in 3a, but rather mimic just the Dev x US (e.g. VEA) part of it; and then hold the rest (e.g. VTI+VWO) outside od 3a.
But depends on the remainder of the portfolio of course, some might be able to strike a balance with a mix.
I have entered my 3rd year of 3a pillar with finpension. The first year I invested 99% in “CSIF (CH) III Equity World ex CH quality - Pension fund DB”, while the second year in “CSIF (CH) III Equity World ex CH Blue- Pension fund Plus ZB”; now in the 3rd year I’m back on the first ETF. Next year I’ll invest again in the second and so on… Do you think it’s the right strategy? Should I open a third portfolio with another ETF?
Unless for experimentation purposes, I‘d recommend to settle on less ETFs, not more.
Also, since it seems you just started out with pillar 3a, you can open more accounts later.
Splitting between the MSCI World ex CH and MSCI World ex CH Quality seems pointless. Same fund provider, same index provider, same custodian - there’s only negligible additional diversification provided by splitting between the two. As for the Quality factor part, you either be true a believer. Or not.
It’s not the same index, of course, as the factor is part of the index. E.g. the Quality index is quite a bit more concentrated. Top 5 positions of World ex CH are 11.9% of the index. Top 5 of World ex CH Quality are 18.9% of the index. The IT sector in the Quality index makes up 35.4% (21.3% of the market cap weighted index).
The Quality fund also costs an extra 0.13% in TER at finpension.
It actually makes sense if someone isn’t comfortable enough to invest 100% in factor-fonds.
I don’t see an issue behind investing in a mix of Bogle and Kommer/Felix.
Absolutely. The (only) true issue that required a slight attitude adjustment would then be his/her level of comfortableness. If you deviate (in your stock market index fund allocation) from MSCI World at all, you may just as well do it with conviction.
Whatever you choose, you’ll still be getting pretty much a similar investment results. Because Both they’re both they‘re both global stock market indices that have been and are extremely highly correlated. And the Quality index is - not only/strictly, but in effect - largely market-cap weighted as well. But out of these two very similar and correlated indices, why not choose the one that outperforms the other by two percentage points or so a year, over the long run?
If all you‘ve ever drunk before is Coke but someone just gave you a can of Pepsi-Cola that makes you realise how slightly better Pepsi tastes …why would you go on drinking them both in a 50-50 mixture?
The fact there are explainable factors to that outperformance, and that one believes in them going forward, is another story (but agreed, the best one we can have).
Yes, very important to note. Factor investing fans sometimes tend to argue there’s a god-given right to a factor premium going forward. But noone of us has a crystal ball.
Can’t do at VIAC, where I still keep some capital, but finpension has become my number one 3a provider for that reason. I still have a small position of an emerging markets fund outside of 3a, but otherwise all my fund holdings can be considered quality funds.
I’m not aware of any MSCI World Quality though that would is accessible for retail investors - except the iShares (ex-AUS) one in Australia.
Certainly not god-given and while I may have a crystal ball, I’m not much gathering the future from it.
That said, the evidence on the quality factor is among the strongest and most long-lasting though.
I don‘t mean random fund with the word „Quality“ in their name. I was referring specifically to funds tracking the MSCI World Quality index.
Even allowing for exclusions of a single country (e.g. Switzerland, like the CSIF funds available at finpension), I‘m aware of just this one from Australia (VanEck, not iShares as I seem to have mistakenly referred to above) that would available to retail investors. If it’s available in practice to European investors at all.
More about quality index investing in this discussion thread.
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