ETFs Portfolio // Swissquote

Investing / Portfolios
1

Hello Dear community,

I’m sure this question has been asked billions of times already.
I’m looking to start my first portfolio.
I’ve opened an account with Swissquote, I know there are better options out there but I wanted to stick with a Swiss provider.

33 y/o based in Switzerland, not looking to move away any time soon, already maxing out my 3a every year.

Currently have around 40K CHF cash that I would like to invest + adding 1.5K CHF every month as of January 2022.

I would like to keep things simple, what do you think about the split below?

  • 20% Swiss Stocks: iShares Core SPI ETF (CHSPI)
  • 10% U.S. Stocks: Vanguard S&P 500 ETF (VOO)
  • 70% World Stocks: Vanguard Total World ETF (VT)

Also, I don’t think I’ll inverst the 40K in one go but probably 10K every month, what do you think of this approach?

Thanks for your precious help!

2

Just realise that the main Swiss core stocks are large global companies, so they are already in the All World ETF and also make most of their money outside of Switzerland.

And the same is the case for the S&P 500; VT is 60% US stocks, most part of that is SP500.

If you want to add local Swiss economy, something like SPMCHA or SMMCHA might be more diversifying IMHO.

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3

SPI → read about home bias on the forum (“Swiss overweight implies embracing additional volatility without necessarily gaining any expected return”)
S&P500 → already a huge part of VT

Not sure if you deliberately want to tilt large-cap global (mostly US) companies and increase the risk by increasing concentration - that’s not something inherently bad, and such portfolio depends on your preferences, investment strategy, and risk appetite (although scientific consensus says you should be doing exactly opposite - tilt small-cap value). In any case, it’s important to be aware of what you’re doing.

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4

I would also suggest to have only 1 ETF at Swissquote. Any trade will be quiet expensive. If you want to play with allocation, you can do it via a custom strategy with 3a funds.

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The cost for that over the next 20 years will be around 6’000 chf. Interactive Brokers would cost you around 550 chf.

That is without selling. If you include selling, then the cost will be around 12’000 chf for Swissquote and 560 chf for Interactive Brokers.

This does not include the opportunity cost of that money.

With Swissquote you will end up with around 645’000 chf after 20 years. With Interactive Brokers you will have around 660’000 chf.

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Thanks for the suggestion, Dr. Pi,
I’m already maxing out my 3a pillars, so I’m trying to optimizations my savings, currently in cash

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If you want to use Swissquote as your main borker account, you should invest in one of their “flat fee” listed ETF.

For example: VWRL denomited in CHF :slight_smile: It will cost you 14 CHF (9 + 2 + 0.85 + 1’500*0.15%) each month if you invest 1’500 CHF/month

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This one?

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How do I find the other flat fee listed ETFs?
Thanks

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Yep this one :slight_smile:

For their listed ETF, you can find them here: The Swiss leader in online banking (swissquote.ch)

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Buy VWRL quarterly.

Job done, costs minimized (*), DCA achieved.

(*) Apart from switching brokers, which you likely will do sooner or later, after some time looking at how much they are charging you. :grin:

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Is there a limit to that?

I already invest each trimestre based on monthly amounts put aside (try to hit 10k-15k but don’t always make it)…I have the chance to invest more as an “on the top” …should I not do a lump sum rather than wait?

Not talking too much about marketing timing, but now doesn’t seem too bad.

ps. I am not yet at IB (looking into it though as my fund grows).

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Not sure what you mean by limit?

Sure, windfalls you handle as you want.
I was talking about regular “same amount” intervals.
At swissquote it’s probably cheaper the fewer trades you make - thus quarterly (4) or every 2 months (6) instead of monthly (12 buys) is likely less costly.

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I’d add some exposure to crypto currencies. Bitcoin is available on Swissquote.

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You answered my question, thanks. I was referring to the context of lump sum vs averaging over the year. I wanted to confirm if your point was based on optimizing costs or more investment averaging.

I agree fully for less frequent and bigger systematic investments and that any « one offs » respect the same investment strategy but as a lump sum as soon as available in addition (rather than increase the amount of the systematic investments and slowly combine the one off into the systematic)

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Here is a simulation with a constant 4.25% return for VWRL and 4.5% return for VT with all fees from SQ and IBKR included. For SQ I simulated buys every month, every other month as well as quarterly.

The difference between VT@SQ quarterly and VT@IBKR is 25k.

  • 3.4k of that is the quarterly fee
  • 6.8k are costs of FX, transaction taxes and buy costs
  • 6.3k are costs of FX, transaction taxes and sell costs for the final sell
  • 7.6k are opportunity costs of the money lost too fees and quarterly investment.

EDIT: made a mistakes(Bimonthly and quarterly investments miss 1500 or 3000 chf), will correct shortly

Is corrected now, However I didn’t include transaction taxes.

Edit: the transaction taxes make quite the difference.

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Come on, guys, don’t push! Let a man catch his breath.

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Fees for VT on SQ are not the same as VWRL, did you take it in consideration ?

  • Fees for purchasing 1’500 CHF of VWRL on SQ = 14 CHF (9 + 2 + 0.85 + 1’500 x 0.15%)
  • Fees for purchasing 1’500 CHF of VT on SQ = 30 CHF (25 + 2 + 0.85 + 1’500 x 0.15%)
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Yes, however I didn’t include transaction taxes, so every buy at SQ is 5 -10 chf too cheap

With transaction taxes included:

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I don’t know how to thank you guys, so much wisdom that you shared with me :slight_smile:

So, you convinced me, I’ll go for IB then.

I’ll invest quarterly 7K CHF (1.5K x3)

  • Do I stick only to VT in USD or should I go for a second EFT as well?
  • It is wise to do a first larger investment? Let’s say 20K to start?

Thanks

T