First time investing - advice on my portfolio and broker

Investing / Portfolios
1

Hi all,

this is a great community you have here. I want to start investing in ETFs and I was wondering if you could share your thoughts on my portfolio and broker.

I am planning to invest CHF 25’000 per year using PostFinance into the following ETFS:

  1. 40% in Vanguard FTSE Developed Europe UCITS ETF @ 0.12% TER (bought on SIX in CHF)
  2. 40% in iShares Core S&P 500 UCITS ETF @ 0.07% TER (bought on SIX in USD)
  3. 20% in iShares Core MSCI EM IMI UCITS ETF @ 0.25% TER (bought on SIX in USD)

The total cost of investing per year on PostFinance would be CHF 95. I understand that making the same investment with DeGiro would be significantly cheaper (I have an account for playing around with them), but for a “buy and forget” strategy I somehow feel uncomfortable with institutions like DeGiro and would feel much safer with my assets being with PostFinance.

So there it is, I am curious to hear what you think!

1 Like
2

Hey Zuri,
congrats that you are investing!

I think doing like this is already soooo far better than not doing it at all, so any further remarks might be optimizing on a higher (and rather small…) level :wink:

so, since you dont mention any targets and only one boundary conditions of your investment, why would you not use the vanguard all world etf? it has all the ingredients you list. then you can add some different asset classes, for example. but make sure to have at least 2 funds, so you can rebalance.

but before I write too much - browse around this forum (especially the investment subsection), we established a nice knowledge base :slight_smile:

3

I had never heard about De Giro before. This is good to know! Their fees seem to be very very low, i would be very interested if anybody else has reviews or advice regarding them.

Regarding your strategy, I think it is already good enough. Some would argue that your asset allocation is 100% stocks, however I think that we are at the beginning of a bear market for bonds, so I like it like that.

One thing that would be nice to know is your investment horizon profile. When do you want to retire?
On a short investment horizon, the most important parameter is your saving rate.
The longer your investment horizon, the more important your investment yield becomes.

4

Hi all, thanks for the replies! I’ve spent a lot of time lurking on this forum (I found out about it by reading that post on Mr. Money Mustache).

So, the Vanguard FTSE All-World UCITS ETF seems to be the perfect ETF for my needs and the only reason why I tried to “replicate” it via the above three ETFs are the costs. All-World has TER at 0.25%, while the above bundle is on average at 0.126%. Since I don’t see a big advantage to buying a single ETF, I thought saving a bit every year is not the worst idea.

Regarding De Giro, I’ve read a bit more about them that makes me even more uncomfortable (For example the articles here: http://www.amsterdamtrader.com/tag/degiro). I’ll stick with PostFinance and pay their CHF 90 annual fee.

My investment horizon is very long, I am essentially saving for retirement 30 years from now. I have some savings accounts in EUR which are earning 1.4% interest, so I am not really going 100% on equity. (I should have invested 70% of those savings into ETFs 5 years ago, but I was just happy to be able to put money aside back then).

5

Indeed, De Giro seems to have had some weak balance sheet issues this year. Which is obviously not what we are looking for in a broker.
Nevertheless, it would be very interesting to wait 2-5 years and see where they are going. If they can manage to solve their issues, their services would be excessively interesting.

Thank you for bringing them to my awareness :slight_smile:

6

I’ve been thinking of switching iShares ETFs for similar Vanguard ETFs (S&P 500 and emerging markets), because they can be bought on SIX in CHF, saving on currency exchange fees. They also seem a bit safer, as there is no share lending. Also, they are distributing (iShares are accumulating), which could make taxes here simpler.

7

Post finance gives you back the 90 chf as “transaction credits” so if you make 3 transaction per year the account is free si to speak because the transaction costs would be more than the depot fee.

Distributing vs accumulating are treated identical tax-wise.

I agree that buying in chf on the six is usually better, but those etf are less liquid so you will pay more of a spread between the buy/ask prices.

Usually before 100k it doesn’t make sense to divide the investment in multiple assets and ETF. Given that we are still paying transaction costs it is usually better to just buy a all-world etf, ven with TER @0.25%. Don’t forget that usually the tracking error is less than that because of security lending. So in reality the TER should be less than 0.25%