@glina, @nugget: is there a reason why both of you are holding more than 30% in SMI/SPI? I checked the individual setup for VIAC, and you can reduce the SMI/SPI part to less than 10%. Given the fact that Switzerland only accounts for roughly 3% of MSCI World, this allocation (also for Global100: 37% CH) doesn’t make sense.
I played around a little bit with the allocation, and you can allocate 20% to EM (max) and 40% to World ex CH. The remaining 37% can be split to 37% World ex CH hedged (I know, the hedging does impose additional costs), or something like 30% World ex CH hedged and 7% SMI/SPI.
I guess the main question is: is hedging better than allocating a high percentage to Swiss stocks only?
btw: not sure if any of you checked already, but the TER for the used ETFs are as low as 0.003% (CSIF SMI). All of the CS ETFs they are using are for institutional investors. If it wasn’t for the 6’826 CHF threshold per year and the 0.53% TER of VIAC (and maybe also the CS forex costs), then those funds would be a nice alternative. At least for me I was surprised that the TER costs differ that much for invididual vs institutional investors.
From the point of passive indexing, and given i would not want any home bias: yes, you are right, it does not make sense. however swiss regulations requires some fraction (35%?? anyone remembers the number?) if CHF-denominated (!) assets. VIAC has to enforce this, ant i think i remember their simulators don’t bother, but if you are setting your actual portfolio, this restriction applies.
I think CHF-hedged funds (world, i.e.) count towards that “swiss-fraction”, but i dont want any hedged stuff
correct and my stomach tells me i better go SPI extra than hedging, but i dont have good reasons beyond my stomach.
that’s true on paper. still CS (CreditSuisse) needs to make money out of those funds, and they for sure don’t accopmlish this via TER. they have higher spreads etc… I don’t think they are anywhere close to vanguard in terms of savyness
Indeed, I only simulated different options for the portfolio, but didn’t save it. Will check that, since I don’t have any money paid yet (only opened the account some days ago).
Totally agree. The TER is just one of the factors for the overall costs. My personal experiences with CS are also quite bad (but that wasn’t for ETFs). It was just interesting that institutional investors get much lower TERs. But ok, of course it’s not a fair game here (private vs professional).
Vanguard is definetely the best choice for mustachians
VIAC pays fees to CS (outside of the TER) that why the displayed TER is so low.
VIAC needs to follow the limitation of CHF assets, however if you look at the big picture in taking into account your overall portfolio (3a + non 3a), I would assume that home bias is small.
I’d assume there’s actually no spread. As @wapiti mentioned the fees are paid/negotiated directly from viac to cs and come out of the 0.5% cost of viac.
Wrong. They indeed have spreads!! Check out the factsheets. Besides the outrageous 0.75% FX markup these hidden spreads are also not highlighted by VIAC at all. I previously had a look at a few of their funds spreads here - worst contenders:
CH bonds: 0.35% spread
Emerging bonds: 0.50% spread
European Real Estate: 0.31% spread
… and mind you: Swiss Real Estate has 0.84% TER … while the mobile app says 0.00% …
Even if the spreads could be lower, they are aligned with the spreads found in ETFs.
The spread on emerging gov bond of the “Vanguard USD Emerging Markets Govt Bond UCITS ETF (USD) Dist” ETF is 0.2862% (info found under the market quality metrics).
If you multiply by 2 (buy and sell), it’s higher than the 0.5% (0.5% buy, 0% sell) of CS. Obviously, bonds are less liquid which imply higher spreads.
Concerning the FX fees, the line in bold from ther FAQ mentioned that the average fees are only 0.05%
Is there a fee for foreign currency exchange?
Yes, there is a fee. Due to VIAC’s intelligent calculation system, the fee for foreign currency exchange is ideally 0%. This happens when foreign currency purchases and sales are of equal size across all customers in our monthly rebalancing. If the purchase and sale volumes are not identical, the bank will charge a commercial fee of up to a maximum of 0.75% on the difference to be traded for foreign currency exchange. The resulting costs are then distributed to all customers and thus already massively reduced (see Academy for details). Historically, the average annual cost over all strategies is less than 0.05%. Usually these fees are hidden from other providers and are not disclosed to the customer.
The total TER of the real estate fund is not really transparent.
Disagree. IIUC spread is ask - bid, so in the CS case subscription + redemption. For the Vanguard ETF you mentioned the spread is 0.2862% - not multiplied by 2
The WIR Bank charges us 0.75% spread. This is the maxiumum which you pay on foreign currency. It used to be 1% at the beginning, which we were able to renegotiate to the new level.
This external spread is the optimized in two steps:
First with the personal netting; so if you buy and sell i.e. USD we first pool and net for each customer.
Then we optimize ist again over all customers with a general pooling and netting
On the final trade, either a buy or a sell trade, charges the WIR Bank the Spread.
Subsequently, a personal rate is calculated for each customer based on the individual trading volume. More on our pooling and netting can be found here: https://viac.ch/en/academy/pooling-and-netting/
Since a lot of money is flowing in at the moment, the optimization is rather deep at the moment. However, if, for example, in a very positive month, shares are sold via many customers, this can quickly move in the other direction.
At the moment, the general spread (so without personal netting) is moving around 0.50%.
And now to the mentioned 0.05%. This figure was calculated with historical data and some assumptions over all strategies. The basis is a customer, who adds the same amount of funds each year into the same strategy. He would end up paying spread on the initial invemtments and within the rebalancing for his allready invested funds. The idea behind it is a buy and hold approach, as we only offer a monthly rebalacing and are not a trading app. So if you shift your assets more often, you end up paying more of course as discribed above. I hope this explanation helps!
Regarding the discussion above, would you consider making the funds buy/sell spread more prominent for transparency? (currently it’s fairly hidden as one would have to check each KIID separately).
Does anyone have any idea when the next distribution will be for the CSIF funds?
Last year it was in the middle of May but this year I’ve only seen a distribution for CSIF World ex CH Small Cap (the very same day but different year).
The last distribution was on 16.05.2018 for most of them. This year very few got a distribution on 16.05.2019/ 17.05.2019.
The VIAC page contains links to all factsheets where you can see the latest distribution. I can put as example the fund for SMI (but it’s the same for most of other CSIF funds):
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, tu confirmes avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/
Durch das Lesen und die Teilnahme an diesem Forum bestätigst du, dass du den auf http://www.mustachianpost.com/de/ dargestellten Haftungsausschluss gelesen hast und damit einverstanden bist.
and my stomach tells me i better go SPI extra than hedging, but i dont have good reasons beyond my stomach.
