Market neutral portfolio with 3rd pillar as part of your assets / Possible? Desirable?

Dear community

I just came across this forum today and the discussions are awesome, top notch content!

Just a quick summary about myself: I’m 28 years old, Swiss and live close to Basel, together with my girlfriend. 2-3 months ago I learned about the FIRE movement and was surprised that it is actually possible to achieve that. I was always trying to save money, but this changed everything for me. That’s why we are moving out of our 2’200 CHF apartment into one that only costs 1’000 CHF per month (in 8 weeks). I also optimized some other living expenses. Now I’m looking at a net savings rate of around 1’800 CHF per month (out of my 5’350 CHF net salary). Not great not terrible. This will further increase with my future carrer development.

I saw a lot of youtube videos and read Gerd Kommers book “Souverän investieren mit ETFs und Indexfonds”, so I’m all set for my passive investment journey. I chose VIAC for my 3rd pillar (sold my Vitainvest 100 World in UBS, it will be transfered tomorrow) and Degiro for my ETFs. By end of this week I will have:

10’000 CHF in VIAC
3’300 CHF in Degiro

570 CHF of my montly savings rate will be transfered to VIAC. Hopefully this will be only 20-25% of my monthly savings in the near future. But that’s why I’m running into some troubles achieving an overall market cap neutral portfolio. I’m forced to invest 40% into CHF, so Switzerland will be significantly overweighted. Currently I plan to do this:

Degiro (0.22% TER)
70% iShares MSCI World
15% iShares MSCI World Small Cap
15% iShares MSCI Emerging Markets IMI

VIAC (0.52% TER)
3% cash
25% SPI Extra
12% SMI
40% World
10% World Small Cap
10% Emerging Markets

Currently my 3rd pillar will be 75% of my invested assets, in 5 years probably around 30%. In 10 years close to 20% (depending how my salary increases and thus my total savings rate). So Switzerland’s part of my portfolio will decrease over time. But it will remain overweighted.

Should that concern me? Should I change anything about my ETF selection? Or isn’t the overweight of Switzerland that bad as I will be less concerned about fx risk?

Thank you in advance for your feedback.

1 Like

I still haven’t pulled the trigger. Any advice?

Your portfolios seem fine to me.

I don’t think Switzerland is overweighted in it. For instance, I keep 20% of my portfolio in Swiss stocks. In 10 years, you will have less than that. Not everybody on a home bias, but I think it makes sense.

I would personally not invest in the two small cap funds you choose and simply use world to replace them to make it simpler. But I don’t think it will make a large difference.

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