I was already asking about it earlier in the thread. Basically SPI = SMI + SPI Extra.
Please don’t look at past performance as a main reason for your decision what to invest.
I don’t get it why when investing globally, you’re fine with market capping, but in Switzerland you have a problem with Nestle, Roche and Novartis. Yes, these are huge companies. If they split into 10 smaller companies, would you feel better? The logical market capped choice for Switzerland is SPI, not SPI Extra. Does VIAC offer the SPI anyway?
No Viac doesnt offer the SPI directly, you would have to create it out of Extra and SMI.
I just dont feel comfortable having such a heavy weighting of the top 3 in my viac portfolio. I am already exposed to Nestle Novartis and Roche via VT/VXUS at their appropriate market cap. Why overweight them again with viac?
Your total exposure to the big three within VT is around 1%. Within SPI it’s 47%.
If you put 40% of your 3a into SPI, then the exposure will be 40% * 47% = 19%.
If you, however, go for SPI Extra, then you will have 40% exposure to very small companies, probably much more attached to the Swiss economy than NN&R.
Nestle is a multi-brand giant with factories in many countries. I can imagine it provides a better regional diversification than SPI Extra. What SPI Extra provides, is maybe a better industry diversification.
The following statements are my opinions towards the swiss top3
Thats perfectly fine, exactly what I want
Not so good
Still too much.
3 companies, 19 % is imho too much for any portfolio.
I agree, however Nestle Roche and Novartis together have a big US exposure.
With SPI Extra you are not invested in some tiny companies, but invested in some suprisingly large companies. Lindt&Sprüngli, Lafarge Holcim etc. these are all big companies just not among the largest 20.
Dude, it’s not 19% in your whole portfolio, just in your pillar 3a, which should only be a small portion of your whole portfolio.
NN&R have a total market cap of $570 billion. Lafarge Holcim has $30 billion, Lindt has $17 billion. These are little kids compared to NN&R.
Anyway, either choice will be good. I just think you’re not being consequent. If you don’t like to put money in giants, then you should overweigh medium and small caps in your whole portfolio. Aren’t you uncomfortable that 2% of it belongs to Apple?
I guess going with the SMI here over the SPI Extra wont make much difference, at the end of the day its just a personal preference/choice.
I additionally chose a 15% allocation in World Small Caps, so I am tilting even further towards small caps (within VIAC).
Oh I am absolutely not being consequent here, I know that.
It’s not that I don’t want to put my money in giants, its just that I don’t want to put it into the swiss big 3.
Apple has a market cap of 930billion and makes out 1,6% of VT, thats fine.
A while back I was toying with the idea of a 10-15% swiss allocation for my entire portfolio (see _MP’s 3 fund portfolio, minus the bonds part), I was going to use the SMIM or SPI Mid.
I don’t see anyone here recommending using ~15% SMI for this “home bias” part of the portfolio. Why? because its not diversified enough and NN&R are hugely over weighted. I took this same reasoning and applied it here. Of course we are talking about much smaller absolute numbers here so it doesn’t really matter. (max 6768p.a.)
With VIAC I am forced to have a 37% swiss equity allocation. SPI EXTRA seems like the best choice to me out of the available 3. If I could choose freely I would only pick World + EM, maybe a bit of SC.
They are not overweighted. They are market-cap weighted! And I’m not suggesting going for SMI, but SPI (if it’s at all available).
I think if you go for this, you give an even bigger bias to Switzerland, because the smaller companies are very often local companies. If you however include the biggest companies, you overweigh pharma and FMCG.
I just got the answer from IB to my request to make SPI Extra available. You can trade it there now. Just search for its symbol CSS1
One share of the etf is worth 1800 CHF so it’s not very easy to rebalance if you invest small amounts.
It is also awailable on Swissquote but doesnt semm to be available in CT
I dindn’t know either. I just asked whether it can be bought or if not, why not?
First they said they’ll check if they can do it. After two or three weeks or so without news I asked again and after another week they asked me to check again if I can find it now. Maybe 3-4 weeks in total.
There have been other CSIF securities available when I asked, so maybe it was no big deal for them
If you invest in the global 100 with 97% equity, then you need to invest and hold it for the long term and make regular payments. What is your strategy then for the ones among you who are thinking to also buy property in Switzerland?
It would not make sense to use this ETF as a guarantee no?
if you plan to use your 3a for real estate in let’s say 10 years, a 100% stock strategy is probably not what you should have. if the crash happens before the purchase, goodbye house
you could buy 100 % stocks today and reduce it 5-10% every year, for example
Yes and no. I would certainly look so that I can spread my money evenly over several 3a accounts (can be at the same provider). It helps with your taxes when you dissolve them separately (also from second pillar) in each year.
3a accounts can be used as collatoral. I don’t know which value you will get with securities in it. Long term, it should certainly give higher yields. The worst case scenario is that they drop in value and the bank asks for additional collatoral to cover their loan. If you can’t provide it, they may ask their money back. This can end in a nasty spiral.
Basically, the bank will generally consider your pillar 3a for 50% of its value if invested in stocks. Pledging is a good way to let your money works for the long term, as you are not cashing it out, but the minimum financing requirements are a bit harder to comply with since they won’t consider the the whole value of your portfolio.
Personally, I consider pledging as the most efficient way to finance my future house, you get the house and your money is still working for you simultaneously.
This is actually a good point. in the case of an equity 100% 3a pillar, does it really make sense to spread it evenly? Ok you save tax but you may lose some compounding effect (unless you spread it only 100% equity 3a pillars).
@nugget and @joey: i can see that you are putting in place your own strategy. Are you then also purchasing positions in your other portfolio for the rebalancing? What did you use for SPI extra?
No I wont be changing my other portfolio. I treat the SPI Extra in my viac portfolio as my swiss allocation. If I would start maxing out 3a contributions, VIAC will be 15-20% of my net worth when I retire. 40% swiss exposure out of that 15-20% is what I am comfortable with
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