A new low commission 3A/3rd pillar ETF solution from VIAC


#81

It’s not the same:
Freizügigkeitskonto in 2nd pillar is used when you are not currently connected to a Pensionskasse, either because you are unemployed or you are self employed. This is where your 2nd pillar money will be stored until you connect to a new Pensionskasse.

The big 3a for self-employed people that don’t have a 2nd pillar allows you to pay up to 20% of your income or max. CHF 33’840 into your 3a.

Some people are able to hide their Freizügigkeitskonto from the new Pensionskasse and keep it there. The law is clear on this: Your money has to go to the Pensionskasse, but might be worth a try. Not sure what the risk is.


#82

@VIAC Will there be a minimum swiss allocation we need to have when creating own strategies? If yes around where will it be?


#83

Potential funds out there are CHF 150 billion (https://www.nzz.ch/finanzen/wenig-wertschriftenkonten-in-der-saeule-3a-ld.1293667) from 3a + Freizügigkeit , and the example AUM 100 million wud be only 0.07% of these funds. Even if most people are & remain chicken & prefer cash accounts to ETF’s, big institutions over small start-ups, I’d think it makes a potentially very interesting business case financially with those numbers.
In addition to the 3a money, for my early retirement (still a few years away) I’ve looked at some options for the Pensionkasse money (Säule 2), and if not leaving CH the options are very very limited (mostly accounts paying very low interest). Viac solution will be very interesting for me for that too, and glad to hear this being offered soon.


#84

There is only a currency minimum of 40% for the CHF. So if you choose the MSCI World ex CH hedged or the MSCI World Small Mid Caps ex CH hedged in addition to other foreign investments you can go without a swiss equity allication. :slight_smile:


#85

Privately I hold VUSA and VEUR, which are listed in CHF on SIX. Would this also be allowed, or only ETFs, where the base currency is CHF?


#86

The above mentioned funds are both indexfunds with a zero TER. Credit Suisse (who manges these funds) charges us directly for asssets held within these structures and not the customers within the fund. I think we have comparable and most of the time even better products to choose from. You will see all available products directly in the app once our release 2 is public.


#87

Are you refering to the ETFs I mentioned? VUSA and VUR are Vanguard index funds. They don’t have anything to do with Credit Suisse, and don’t have a zero TER.

http://www.six-swiss-exchange.com/funds/security_info_en.html?id=IE00B3XXRP09CHF4

SIX website lists these market makers for the ETF:

  • Commerzbank AG
  • Flow Traders B.V.
  • Goldenberg Hehmeyer LLP
  • IMC Trading B.V.
  • Optiver V.O.F
  • Susquehanna
  • Virtu Financial Ireland Ltd.

#88

I think VIAC are referring to the funds they mentioned above your post. They wont offer VUSA and VEUR directly, but instead they will offer institutional funds with a TER of 0% from their existing partners (Credit Suisse, BlackRock etc.)

I’m not a huge fan of the mentioned MSCI funds, and not sure about the hedged part inside the 3a framework (e.g. is it necessary/worth it), but we will see what they will offer. Look at the current offerings to get an idea.


#89

I don’t see how they are better products than the one from Vanguard. The CHF Hedging is something you definitely don’t want as a long-term investor, or? It only costs you money. The differences between MSCI and FTSE indexes are minimal.


#90

What does better mean? If I have a “VIAC-fund” tracking the S&P500 index for 0% TER I would say its better than VUSA no?

Yes I absolutely agree on this when investing in regular taxable accounts (eg. IB / CT). I am just wondering that in the 3a framework the conditions of these hedged products might be better (institutional access?) an thus worth considering.


#91

Do you mean CHF hedged for currency minimum ?


#92

I have the feeling that your product is not well known from some people working in the banking sector. I got a phone call few weeks ago from my adviser trying to convince me not to transfer to Terzio but he never mentioned VIAC.


#93

Most of people are too afraid to manage this type of stuff themself and on a mobile app… for now


#94

who pays your advisor?


#95

I definetly agree, that a hedge for a long term investor is not a very good thing to do. This is why we try to invest as much as possible in local currencies. But people sometimes fear the currency exposure. However most people don’t understand what a hedge actualy does and what it costs (interest difference, spreads, rollover) and often hedge trading curriencies rather than the risk currencies of the stocks they hold (i.e. Nestle trades in CHF but only makes +/- 1% turnover in CHF). So what the realy do is ending up paying more fees and sometimes even add additional risks as the short some currencies…

So why did I mention a hedged position? First we can’t offer a strategy of 100% foreign currencies (regulatory issue). Second the question I was referring to was, if there is a minimum swiss allocation - no there is not, but for the currencies. So if you do not want to hold swiss real estate,swiss equities, CHF Cash or so, you have to go for a hedged position. Sorry…

I’m realy looking forward to read your feedback, once you are all using our newest Realse by the end of the month :smiley:


#96

That’s why I asked about the Vanguard ETFs (VWRL, VUSA, VEUR). They are traded in CHF on SIX, but have no hedging. So this would be a way to bypass this 40% minimum. I guess it’s in the end cheaper to have a 0.07% TER without hedging than a 0% TER with hedging, because I can imaging the hedging will, in the long run, hurt the ETF by more than 0.07%.


#97

I see - but not the trading currency is relevant in this perspective. For example VWRL hast approx. 2.6% exposure in Switzerland / CHF and could be bought at SIX 100% in CHF. But we look at the 2.6% rather than the trading currency.


#98

I think people here are keen on the exact underlying limits:
What fraction of CHF exposure (according to your definition) is the minimum requirement for a portfolio with VIAC?
=> clearly for most people in this forum , a <5% (according to switzerlands weight in the global economy) would be a natural or preferred choice
what is the maximum unhedged international (USD) exposurer allowed?
Thanks!


#99

I totaly agree, that a +/-3.5% allocation would be the preferred choice. Due to regulatorry limits we have a minimum CHF allocation of 40%. But there is no swiss equity minimum. This is why we offer both, the MSCI World ex CH and the MSCI World ex CH Small Cap, as a CHF hedged and unhedged. So anyone out there can create it’s on strategey with as little as possible constraints.


#100

I guess the regulator (the Swiss state) made this requirement of minimum 40% CHF exposure in order to reduce CHF volatility.

So if I understand correctly, a portfolio of only Nestle shares would not be a viable 3a pillar portfolio, because it has too small CHF turnover? If so, how do you check what is the currency exposure of each security? Can you find it somewhere online?