Yep, a couple of months ago I was seriously looking into that because it annoys me to have a lot of cash sitting and there doesn’t seem to be any good growth options in CHF, but that’s US$ which is on a losing trajectory vs the CHF over many years. If I was in the US I’d be in BIL/SGOV for sure. Then, of course, I’d start worrying if they default because…reasons.
Exactly my point above.
Which is miniscule in Switzerland, though. My point about goals stands though, someone who’s in a position not to need growth should be sitting it out in my opinion, and gainz be damned, I am not in that position.
Not all, but 10% for sure. The rest I’d keep in because ====>
I started worrying about last June, driven by the incessant hammering and fearmongering about fundamentals, then since this year have a bigger worry, a rogue player
It’s like watching a scary movie and the monster is crawling about but hasn’t shown up, still no buy signal yet
Interestingly, for now this thread manifests fear while market indices go from one ATH to another. Also developed ex US, while emerging markets haven’t reached 2021 levels yet, from a quick look. Not sure if it happened before. Is it because US investors euphoric about the prospectives of Trump 2.0?
Don‘t look at 2001 to now. Look at YTD, or ynov 24 / Jan 15 25. since trump, us loses against pretty much all, even against EM which otherwise are loosing markets.
Not enough to set a trend but IF this continues until Oct 25, this will break the trend and trend followers will push the US back by 30% (vs the World).
Bring it on. I would welcome that.
Maybe then the VOO-only shillers on reddit are a little more quiet, and my pulse is going down a bit, not reading the nonsense arguments they bring all the time
I mean, how much does it cost to start investing in WEBG or FWRA? Maybe even splitting 50% VT and 50% to an alternative ETF of choice?
Not much, a few hundreds CHF maybe.
I agree, it is not optimal and I liked not having to think and every month buying as much VT as possible, but I don’t see buying WEBG/FWRA as market timing or inherently wrong.
At least not so wrong to risk it all.
I’d also like to add my two cents to the discussion, even if my knowledge on the subject is somewhat limited. I can understand the concerns surrounding broker selection and fund domicile (especially the US situs issue), and I’m able to compare options like a low-cost broker (e.g., IBKR) versus a Swiss solution (SQ), or evaluate the differences between ETFs such as VT and FWRA.
However, what still puzzles me - despite all the current FUD and my efforts to grasp the situation - is this: what’s the point of investing in a world ETF if it doesn’t fully cover the U.S. market? Isn’t there always a risk of liquidity issues with such an ETF? If the main concern is the potential loss of access to U.S. markets or significantly higher costs, wouldn’t liquidity - meaning the ability to sell existing shares - be the biggest risk, regardless of the broker or ETF chosen?
FWIW if the access to US markets breaks down you probably have other problems to deal with
It would be a major crisis (and have pretty severe aftermath, everything is connected and the US financial system is enormous and pretty much entangled with everyone else)
edit: personally I tend to not optimize for those kind of black swan event, esp. when everything around breaks as well.
What I might think about instead:
increased taxation of foreign investors, it could even be in a way that financial markets are not punished while investors are (probably using a synthetic ETF is a plus for that)
US slowly becoming less relevant as it retreats from collaborating with the rest of the world (I wouldn’t try to time this, and would keep holding a global ETF)
Thank you for your contribution. This brings me back to the irrational aspect of the current situation: we are making assumptions based on the election of a single person for a four-year term. However, it is highly unlikely that Trump will run for a second term.
In this context, are these reflections truly relevant? Are we distorting reality out of fear, or is there a real and plausible risk?
Some changes are definitely possible (the foreign investor taxation is part of an executive order signed a few weeks ago, and it’s inline with the tariffs stuff that seem to be moving forward).
Something very drastic breaking the US financial system doesn’t seem very likely to me (there’s finance/hedge fund people in power now that would have nothing to gain from it), but maybe my priors are wrong.
I would also say this is not the same situation as 8y ago, now all branches of government are aligned and there’s no legacy GOP people in place, so we should expect more direct/effective action this time (whatever that is, there will be less people trying/able to block it).
They are not, but we are not agreeing on the context. If the concern is that Trump will do his stuff for 4 years and go away leaving the US in a state of politics as usual, then no action is warranted. If the concern is that Trump will either not go away or shift the way US politics are done in a meaningful way that breaks the trust the world has in the US creditworthiness and their stock market (deregulation, for example), then things can change meaningfully.
Market makers should provide liquidity for such an ETF. The risk is that market makers run out of money to do so. I find it less likely to happen than the scenario above. That doesn’t mean everybody should worry and get out of investing in the US but my personal assessment tells me it is not the most optimal way forward for me.
They hold some assets in the US. I’ve not been able to find a conclusive answer as to which they are, though I find highly likely that, for stocks and ETFs, US stocks and ETFs are held in the US and others, in particular UCITS, are not. It’s just high conviction on my end, though, not actual knowledge so I still consider the risk of other assets being held in the US as existing, though pretty low.
I like this thread as it brings some scenarios to the table without the noise of the daily news.
I don’t have a significant VT position. My invested Positions are heavily home biase. Roughly 40% VTI, 25% SMI, 25% SMIM/SPI Extra, (Swiss mid/small caps),10% IEMG
Main Reason for this is that I don’t liked directly investing in Germany, Italy, France, Greece, Japan… at the time I decided the allocation. And as we have learnt in this forum, investing in swiss companies that earn their money in Europe is somehow equivalent to exposure in Europe. Also SPI Extra/SMIM had outperformed S&P500 in CHF at the time I backtested my allocation.
However I hold my securities at IBKR and VIAC, so I am in the same boat
So my question is why not move a significant position to SQ and increase the home bias for a couple of years?
There is nothing wrong with moving part of SQ. The general consensus suggests that fees tend to be higher at SQ than at IBKR. This brings us back to the issues of fees, risk, and optimizations - topics that have been discussed multiple times without reaching a clear agreement. Everyone makes decisions based on their own situation and preferences.
(h) The United States will continue to welcome and encourage passive investments from all foreign persons. These include non-controlling stakes and shares with no voting, board, or other governance rights and that do not confer any managerial influence, substantive decisionmaking, or non-public access to technologies or technical information, products, or services. This will allow our cutting-edge businesses to continue to benefit from foreign investment capital, while ensuring protection of our national security.
Also that’s the same order that threaten to do a lot of economical stuff to china (remove dual taxation agreement, threatens foreign listing in US stock markets, etc.)
Sure Europe or Switzerland is not seen as the same adversary obviously, but the administration has used the argument that economic security is national security quite a lot (and sees disfavorable trade balance as a threat)
The rest of the policy talks about limiting Chinese investments into American infrastructure, military complex etc. and they don’t want Americans to invest in Chinese companies.
From an American standpoint I can understand these points. I wouldn’t want e.g. the majority of Swiss electricity companies to be owned by China.
The part I quoted was the one most of us here would affect (foreign index fund investors).
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