Home bias in your portfolio

Investing / Portfolios
1

Hi everyone,

Quick intro : 29M, single but planning to have in the next 3years some children.
I started to invest my hard earned money in VT and CHSPI with an allocation right now (80/20).

After consideration and reading about home biais, I understood that the home biais is more necessary for someone who want to retire in the country they are investing, here we are talking about Switzerland.

Two points came to my mind :
_ Swiss market represent 2.5% of the world, why are we not investing in an European ETF such as VEUR, which would diversify your countries and sectors by a lot and still give you the advantage of a strong currency, euro.
_ If you are not planning to retire early in Switzerland or can be subject of moving out of Switzerland for your job, going with VEUR would make more sense as CHSPI cannot be hold by someone out of Switzerland.

What are your thoughts about that ? Would you advise me to relocate my investment from CHSPI to VEUR ?

Thanks for your input :slight_smile:

2

Mine is on VEUR.
On my custom allocation in Viac, I have the SPI and SMI etf for 3% (2+1) of my investments.

3

Wouldn’t you need a wife or girlfriend to do so?

First, I‘m not sure it’s a strong currency. Particularly against the Swiss Franc.
Second, more than half of VEUR‘s holdings are from Non-EUR countries.
Third, keep in mind that home bias, let alone fund currency doesn’t make that much of a difference over the long-term (at least among developed countries and if you’re decently diversified).

The diversification from CHSPI to VEUR may be a good idea, just to diversify countries - but I wouldn’t much look at it from a currency perspective.

Huh? :thinking:

Foreign-domiciled investors can of course hold CHSPI!?

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4

I think you cant buy it outside CH. But obviously keep holding it, if you already have it.

But if you ever leave the country to another with capital gains tax. you should sell all your assets before leaving and re-buy at the destination to reset tax base to 0.

5

Are you sure? I don’t see a reason why this should be the case.

6

Who says “we” are not investing in European ETF such as VEUR? :wink: I have started to get some VEUR since one year now but not for “home bias” purpose but simply for the fact that I believe Europe might outperform US which is overvalued. I own VT so with VT I have a too large % of US stocks for my taste, adding some VEUR allows me to bring down the amount of US stocks in my portfolio. YMMV

7

It‘s not a ucits fund and only has a “Vertriebszulassung” for Switzerland.

8

Thanks everyone for your answer.

Do you think in that case, in my situation, it could be a good idea to switch my CHSPI allocation to VEUR ?

My job can bring me out of Switzerland to Germany/Danemark/Singapore or Irlande quite easily, I just prefer to be sure that I would still be able to finance an ETF and enjoy my compound interests :wink:

Or a home biais in Switzerland is still highly recommend ? Even though, I have my 3A and second pillar

9

Ah I see, I thought there’s a UCITS fund someqhere that replicates the SPI.

10

There is an Amundi MSCI Switzerland UCITS ETF. It doesn’t track the SPI but I would expect it to not be too far off.

11

Why? What benefit are you seeking to achieve?

Note that if you are employed you already have very large swiss bias via your salary and second pillar.

12

Indeed
. In that case, what is the purpose of following the Swiss index ?
I was checking also my 3A global 100 with Viac and I saw that I was leaning heavily toward Switzerland.

With those considerations, I’m wondering if I should not just bought 100% VT.

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