I discovered the Mustachian Post through Mr.Rip (retireinprogress) and I discovered him through the Englishforum
First of all I would like to thank you for all the helpful posts and advice in this forum. I’m reading the forum as a Guest for the last two months and I thought it’s time to make an account and introduce myself.
I’m 27 years old and I came to Switzerland in the Spring of 2016 right after my studies for work. I’m working since then for one the two big Banks in Zurich as a Data Scientist.
A challenge compared to the rest of the forum is that I’m obliged to use the bank that I work for as a broker since my role is classified as “Sensitive” due to my data access. That basically means at least 40-60CHF fee per trade! Anyone in the forum facing the same “challenge”?
To minimize these fees I’m making a big trade of 5000CHF the first Monday of every month. Furthermore I’m trying to use SIX (lower fees) as an exchange and find a version of the ETF in CHF (if possible) to minimize the FX fees as well.
I started this “strategy” at September 2018 (my first ever trade was buying the very top of the market before the collapse )
Here is my Target Asset Allocation* :
Category
Percentage %
Comments
S&P 500 - USA big cap
20
VUSD
USA small cap
10
CSUSS
Europe Big Cap
15
MEUD
Europe Small Cap
10
CSEMUS
Emerging
10
IEMG - I need to change it
Pacifix Ex-Japan
5
SXR1
REIT
10
REET + IPRP
Bonds
20
Mostly through PIllars 2&3, no more buying of bonds
What are your thoughts? What would you change in that allocation?
My Pillar 3 for the years 2016-2018 is with one of the Big Banks and starting in 2019 I opened a VIAC.
The goal is to reach around ~1.5M Net Worth at ~40 and FIRE
*That allocation is heavily influenced by Mr.Rip’s portfolio
If you have to pay 50-60 CHF per trade, you are a perfect case for using the Vanguard VWRL (on SIX in CHF). This is a relatively close match to the allocation you outlined (excl. small caps and REIT).
Find out what is the optimal minimum purchase and define a proper frequency (let’s say, in case of Corner Trader the fee is 0.2% per trade but a minimum of 20 CHF - easy math 20/0.002 = 10000 CHF).
For REIT exposure if you really want one, try custom strategy in VIAC. You can also increase your worldwide Small Cap exposure via a custom strategy in VIAC, which will help you create a complete portfolio with minimal yearly fees.
Too many funds, I’d cut 6. Don’t make it more complicated than it needs to be, esp. as you pay big bucks per each position. E.g. 5% allocation in “Pacifix Ex Japan”, the fuck it matters, I could understand limiting a stock position to 5%, but market indices are much more correlated anyway. Here’s a null hypothesis for you: VT or similar (VWRL) ought to be enough for anybody.
Other banks like ZKB, also offers passively managed funds.
It’s a lot easier for them to make a discount on their funds or managment fees than ETFs.
Moreover with funds, you avoid stamp duty.
That seems like a great fit and buying it on SIX in CHF is basically ideal! The optimal minimum purchase for me is 5k CHF resulting to the minimum fee of 50 CHF per trade.
I was thinking that I should make my allocation much simpler since I’m already struggling with managing it (for example choosing which etf to buy next).
I suppose I can change to something like the following, and get exposure to the small caps in VIAC using a custom strategy.
Category
Percentage %
Comments
FTSE All - World
65
VWRL
Emerging
5
IEMG - I need to change it
REIT
10
REET + IPRP
Bonds
20
Mostly through PIllars 2&3, no more buying of bonds
I will keep an extra 5% in emerging markets since the VWRL seems to have a low % in emerging markets.
That already looks much much simpler and manageable
Yeah completely agree. Even though I’m following this allocation for less than 6 months I already have problems managing it. I will start buying mostly VWRL from now on and let the ETFs I alraedy have to get marginalized instead of selling them.
I’m prohibited to use any broker other than the bank I’m working for. I have checked some funds from my bank but the TER was always more than double than the TER of an equivalent ETF (even though I have staff discounts…)
Furthermore ETFs seem like a better choice for my situation since I can just move them to an external broker in the likely scenario that I will change employer sometime in the future.
Ditch IEMG or increase it. 5% makes no sense at all. If it overperforms by 10% over time, you’ll see a 0.5% gain over your whole portfolio. Worth it? Probably not. You can get some additional EM exposure over VIAC if you wish. Or there is also VFEM (Vanguard Emerging Markets) listed on SIX in CHF if you wish. Or you could combine VEVE (Vanguard Developed Markets, also in CHF on SIX) and VFEM in your desired proportions …
Do you know if you can invest in external funds such as Truewealth, Simple Wealth etc? As much as they are considered expensive around here, they may still come out cheaper. They are not brokers after all…
I’m complicating it again for no reason… VWRL +REIT +VIAC should be more than enough.
You are right I can use services like True Wealth. As long as it is not possible to buy single stocks, options etc it is allowed.
At first glance it seems quite promising. Assuming an investment of 60k per year.
Scenario 1 Big Bank:
Transaction fee every month: 1%
TER VWRL: 0.2%
Fees: 720 CHF
Scenario 2 is clearly much better while I am in the accumulatiom phase (buying every month).
Thats definitely something to consider!
Thanks again
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