Does this simple portfolio make sense?


#1

I’m about to invest for the first time. Probably going to open a CornerTrader account. Goal is to invest my first 30k over the course of 3 months, and then I’ll probably manage to invest 10k per quarter.

What do you think of this small portfolio?

  • 65% Vanguard FTSE All-World UCITS ETF
  • 20% Vanguard S&P 500 UCITS ETF
  • 15% iShares Core SPI

Since it’s the first portfolio, I want to keep it as simple as possible, until I understand things better. I’m particularly not sure about how much sense it makes to have All-World + S&P500. My idea is to have everything, with some bias to US markets and a smaller bias to CH market.

EDIT: I also recently opened a VIAC account and will max it out yearly.


#2

I thought CT is a good idea too, but I lasted 6 months and am now switching over to IB. I’ve spent way more on comissions and currency exchanges than I had planned to. This wouldn’t have happened if I went straight to IB.

As to your portfolio:

  • Vanguard funds have high spreads on SIX (~1%) and the TER of VWRL is not that attractive, even in comparison to other European ETFs.
  • you are missing small caps
  • you are missing EM
  • you are likely already biased to CH with your Pillar 2 and 3a (are you with VIAC? if not, consider to be. By law you’ll be required to be CH biased with 40% CHF denominated assets in 3a).

I’d suggest you go with Vanguard US funds in any of the following configs:

  1. VT
    around 8000 stocks over all caps

  2. VTI + VXUS
    around 10000 stocks over all caps

  3. VTI + VEA + VWO
    around 12000 stocks over all caps, easy to under/overweight the US or EM.

You may also add small cap bias if you wish to do so. There are VB and VSS as well as many others to chose from.

Of course if you insist on home bias, you can add Ishares Core SPI as well and still pay only 2$ per trade instead of 25$.


#3

Thanks for your reply!

What exactly happened? Aren’t the costs more or less transparent and you should be able to anticipate them?

Hm, the fact that I don’t even know why I would want small caps and why this aspect is not covered by “all world” shows that there is more research to do… :confused:
What’s interesting about small caps? More fluctuations, but less “going with the herd”?

True, I forgot to mention this. Just opened a VIAC account. This will be the first time I contribute to the 3rd pillar.

Thanks, I’ll look into these compositions over the weekend.


#4

I found myself wanting to buy more often than once in a quarter. And why should I, if I can contribute monthly at IB and save money, then at every rebalancing, with way lower spreads, with better currency exchange rates and possibly also with withholding tax.

The TER of funds is arguably the smallest cost contributor. I will keep both accounts (CT and IB), but will only contribute once or twice a year to CT, while I will do monthly purchases at IB.

My CT contributions will be mostly used to balance out my VIAC portfolio which is Small Cap tilted.

Regarding “Small Caps” - these are companies with small market capitalization ($300M-$2B, as per “investopedia”). They are generally more volatile but are thought to give better returns over long term.

edit: corrected small cap capitalization


#5

No institutional (especially ETFs) will ever go in the $100 million market cap territory. When they say small cap, they usually mean > $ 1 billion. Below there is not enough liquidity (especially compared to the size of their assets under management). For institutionals, stocks below $500 million is unknown territory. Which also means that this is where most market inefficiencies are located. Furthermore, around 1/3 of all US listed companies are below $500 million…