Mustachian portfolios

If you trade with a Swiss broker and don’t want to have US domiciled funds, you will be better served by XDWL (0.19% and listed on SIX in CHF) for lowest overall cost.

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If you trade with a Swiss broker and don’t want to have US domiciled funds, you will be better served by XDWL (0.19% and listed on SIX in CHF) for lowest overall cost.

Thanks! I didn’t know about XDWL. Bit new to ETF investing. What’s the main reason you would want to go with US domiciled funds? Dividend tax efficiency?

…unless you compare actual returns on justetf, and note, that the (by a mere 0.1%) “more expensive” iShares ETF has so far slightly outperformed the “less expensive” Xtrackers ETF, since the latter’s inception.

I wouldn’t optimise to the last base point.

Yes, tax efficiency. Keep in mind that there are probably hardly any (inexpensive) brokers left that will let EU retail customers buy US ETFs. With the notable exception of Interactive Brokers - and possibly some of their resellers.

Also it seems tax matters could get a bit more complicated and/or nasty, whether in Switzerland or after a move abroad.

For the 10th time: SWDA is not the same as VWRL. SWDA is VEVE (0.18%). SWDA is missing Emerging Markets.

A match for VWRL would be an ETF based on MSCI ACWI, but these are very expensive. Well, there is a cheaper one from UBS, but it’s fresh and has almost no AUM.

When in doubt, check this website:

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This is a wrong approach. You don’t want to deviate from the index by investing in an ETF

XDWL has a tracking “error” of 0.18%, which breaks down to 0.19% fees and -0.01% for securities lending. In other words, it tracks MSCI World nearly perfectly.

The best european MSCI EM ETF is indeed from Ishares, the EIMI (0.18% TER, includes EM small caps).

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Why not - if it works in my favour? But I‘m not saying to deviate significantly from the index - even though in fact the ETF will (optimised sampling, costs…)

0.18% is the (theoretically) expected tracking error - not necessarily the actual, due to various smaller factors.

In this case, for instance, the iShares SWDA seems to have smaller actual tracking errors than XWDL. Here, for example iShares listed a realised tracking error of only 0.09% for SWDA.

So even though the TER (which does not include all costs and deductions) might be a base point more, the ETF might have better replicated the index - and returned more. Thus my earlier question about the „obsession“ with TER.

In this case anyway, the X-Trackers XDWL is a distributing fund, whereas iShares SWDA is accumulating, which might (also) be a more important consideration than than 0.01% difference in TER (which, as we saw, doesn’t even necessarily mean a more „expensive“ fund had „worse“ returns).

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I have been thinking about this a lot lately. Do you think its best not to accumulate EM? I am considering it. I am also from a EM country (South Africa) and I know what’s going on back home and it seems things are just gonna get worse.

Hi guys, just wanted to clarify something. I believe that etf factsheets that are published include automatically the dividend reinvestment.

Consequently, for instance if you look at the SPI, the return include the reinvestment of approximately 3% dividend per year? I think this is clearly stated below the graph but i just wanted to make it 100% sure.

However, what about when you look at the index on Bloomberg for instance like here below for SMI. How are dividends taken into account when considering a specific index?

https://www.bloomberg.com/quote/SMI:IND

The charts showing growth of an ETF are accumulated and run against a total return benchmark. Indexes come in two forms: a price index and total return index. Price indexes are for example SMI, SPIX, SP500. Total return indexes: SMIC, SXGE, SP500TR.

But when it comes to Bloomberg, the tickers are confusing. SMI is the price index, but SPI is the total return. See the factsheets of SMI & SPI from SIX:

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There are three standards flavours of indexes actually: price return (PR), total return (TR) and net return (NR). The latter considers dividends net of withholding taxes and this is the one that funds mean by “performance”. Your Bloomberg link indeed only shows PR index without dividends.

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For NR index note that withholding tax assumptions that index providers make are often overly simplistic. Like for example they assume US always withholds 30% tax, but this is just not true for most investors: most countries have tax treaty and even when not you can go through Irish funds for 15% withholding. The fund industry perpetuates this little scammy trick because it makes their funds look better on paper than the benchmark with higher tax than it actually is in practice

Monthly FI savings:
80% VUSA, VTI
20% Gold ZGLD

3a savings with Viac:
30% Real Estate CH
20% CH Bonds AAA-AA
20% S&P ETF
15% SMI ETF
10% Gold ETF
5% Cash

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So 0% in Europe ex-CH, developed countries ex-US, and emerging markets?
Interesting! Why is that?

To be fair, this setup might change during time. But in my opinion EU has not the necessary flexibility nor needed mindset of the important countries (GER, FRA, ITA, ESP), to handle a potential next crisis well.

Hi Folks,

I was searching a bit while, but I couldn’t really find the solution. Is there a possibility to build up in Interactive Brokers exactly the same portfolio like VIAC’s Global 100 strategy? I have the ISIN numbers, but I couldn’t search at IB on the mobile / tablet version by ISIN.

I really like the diversification of VIAC’s Global 100, and of course the performance. This is amazing! Pretty stable, solid as a rock, and performs like a dream :rocket:

Any best practices, ideas?

Has any of you done the mirroring of the Global 100 strategy in Interactive Brokers already?

Thanks,
Mr.P :hot_pepper:

65% VT and 35 % iShares Core SPI will be pretty close.

For now, like everything else you could have invested in from start of this year. :smiley:
Let’s see when the drops start coming, where it goes. :slight_smile:

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There there is, it’s called VT.

  • Low fees of 0.09%
  • Over 8000 equties in 47 countries (developed and emerging) for a total market cap of 99%.
  • No bets on countries, market-neutral.
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Though the „market“ (index) itself is a big bet on one country in particular.

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Hi Mustachians - amazing forum!
I’ve just set up an account with IB and now I’m trying to figure out how to set up a reasonable portfolio for myself.

@nugget I like your portfolio idea of covering the world economy, 100% stocks & <0.1 TER. You have mentioned that the setup is close to VT (considering regions), but you have highly over-weighted mid & small caps (compared to VT). Is that also the main reason why you had to set it up using these 6 different ETFs?

I’m asking because I’m considering to go for a very boring portfolio and just go for 100% VT. Are there any other downsides of such a simple approach?