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 
Any best practices, ideas?
Has any of you done the mirroring of the Global 100 strategy in Interactive Brokers already?
Thanks,
Mr.P 
65% VT and 35 % iShares Core SPI will be pretty close.
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For now, like everything else you could have invested in from start of this year. 
Let’s see when the drops start coming, where it goes. 
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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?
I haven’t commited yet and am open to suggestions.
Targets of the Portfolio:
- Some home bias It seems some home bias has benefits
- https://personal.vanguard.com/pdf/icrrhb.pdf
- Portfolio has a total of 25% for Swiss equities
- Global diversification
- Exposure to value and size risk premiums
- Low total TER
Product Selection:
- CHSPI: Low TER and many holdings
- VXUS: Low TER Exposure to world without the US, including EM
- VTI: Low TER Exposure to total US stock market
- IUSV: Low TER and some exposure to the value risk premium
- IJS: Reasonable TER and high exposure to value and size risk premium
I looked at other funds with size and value exposure, but many have a very limited exposure to the risk premiums or contain some clause for active management(looking at you VFVA). IJS is a bit more expensive but offers good exposure to the factors.
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How would you summarize that paper? To me the tl;dr is not really a justification for home bias, it just says that investors have a home biases and in certain conditions it might be somewhat ok (but from what they say home bias is somewhat ok only for US, for the three other countries they would recommend investors to increase their foreign holdings).
From what I can tell, for a country like CH which no tax advantage and a concentrated stock market there should be even less justification for a home bias.
Figure 1 shows that the variance is the lowest with a home bias of
- 50% for Australian equities
- 30% for Canadian equities
- 80% for US equities
- 80% for UK equities
There is some tax benefit to holding swiss equities. Most Non-Swiss, Non-US equities will be have some non-recoverable withholding tax. I believe that holding Swiss equities will reduce currency risk a bit.
This is quite interesting as it is calculated in the home currency of each country. You can clearly see the risk/reward ratio sweet spots. I honestly would’ve expected some of the results to come out to 0% or 100% home bias. I’d love to see this analysis for Switzerland and somewhere in the Eurozone.
I wonder if they took into account tax credits that certain countries (e.g. Oz and Canadia) offer on dividends and/or capital gains from domestic companies. If not, I’m sure that would shift things significantly.
There is FX risk, just not directly. Roche and Novartis for example: only 2% of the revenues are made in Switzerland. The other big Swiss companies are similiar in that regard.
So the Swiss market is highly dependend on FX rates.
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You’ll be allocating more than half (55%) of your portfolio to one single country and jurisdiction.
As internationally diversified as some companies‘ businesses from that country might be, not all of them will be. There is going to be a huge bias for that one particular country.
And as well as its equity markets might have performed in recent history, past performance is no guarantee of future.
So are you feeling comfortable with that?
Well then, why not?
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What are you talking about? Investing less than 55% into the US stock market is an active bet against it.
That’s not the moustachian way.
…or, in other words, called diversification of investments.
Being narrow-mindedly fixated on MSCI / FTSE (All) World indices as the one and only benchmark (to align your investments with or consciously diverge from) is not the “mustachian” way to live by.
In my opinion.
And why would you be more diversified when underweighting USA?
Not putting all our most of your eggs in one basket is called diversifying.
Allocating less than 50% to one single country (and jurisdiction’s stock market) is not “underweighting” by many standards.
Sure, it will be comparing against these very two indices and/or world market capitalisation in particular. And using them as yardsticks might be quite popular. But market capitalisation should (IMO) not be regarded as the only possible (or “mustachian”) way of looking at the picture.
For instance, looking at the world’s total GDP, the USA accounts for “only” about 24% of it. Against this measure, it would thus be heavily overweighted by investing in VT.
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GDP != corporate profits and stock prices. There’s correlation but it’s far from linear. With so much stuff being produced in China today it doesn’t surprise me that USA’s own GDP is relatively low. “Made in America” is too damn expensive! But still much of profits flow to american megacorps even if much of associated GDP is attributed to China