Mustachian portfolios


#122

I am so new to all this investing business, that I’ll first invest a very small amount and keep the rest in cash and 3d pillar. I have to get used to these ups and downs first. If at some point Swiss bonds will start to bring some interest I’ll maybe buy such a bond ETF. I listened to several talks of experienced people on long termed investments and they say that stocks make more sense:


#123

Hello everyone. Very interesting thread so far. I also like @Knoch portfolio. My husband and I have just set up a De Giro account and want to start realizing a similar portfolio. Your feedback is appreciated!

Code Name Reach % of portfolio
VEVE Vanguard FTSE Developed World World 45%
VEUR Vanguard FTSE Developed Europe UCITS ETF Europe 30%
VFEM Vanguard FTSE Emerging Markets ETF EM 15%
VTI Vanguard total stock market ETF World 10%

This might be a silly question, but we plan to buy these stocks on the Swiss Stock Exchange. This is because we live in CH and hope to be here for a long time. The “backup” plan would be to settle in Europe so maybe it is also worth diversifying the currency in which we hold these funds?

We will also hold some cash and are considering our 2nd and 3rd pillars as counting towards lower risk investing.


#124

Well, your funds are overlapping and not even close to replicating world stock market: US weight in the world is over 55%, not 10-20%.

I don’t see at all how that implies that you have to buy on SIX. Also VTI you can’t buy there, only on american exchanges.

Currency of the fund doesn’t really matter (as long as it’s not some kind of currency hedged shit), it’s what inside of it that counts, more precisely the currency in which the companies are making money in.


#125

VEVE includes VEUR and VTI. The “Reach” of VTI is USA, not World. Also, last time I checked, VEVE had a very small AUM (only 150 million CHF). If you do want a hassle free solution, then just buy VWRL and forget these funny splits. I don’t get it, everybody here thinks they will come up with some magic formula that will beat the market capped mix. And then they have to bother about rebalancing. I guess it’s due to the feeling that a single ETF is just too easy to be effective.


#126

I will make huge adjustment to my portfolio and move the majority to ETF’s on IB. I think about just put it all into VT to keep things simple.

Does anything else makes more sense or is this a good first move into the ETF world? Maybe having VTI and then the rest of the world with something else? Thanks for your feedbacks.


#127

i’d advise you to

  1. if you have already ETFs at another broker, check the costs for transferring the shares vs. selling, cash out, wire cash to ib and buy back what you want
  2. first make a definite decision on how your portfolio should look like before altering it. fix it with an IPS to you have something to stick to.
  3. if you anticipate that you might change your opinion in the future about your portfolio, make reasonable assumtions on what costs are involved. however, with IB and US based ETFs, it won’t be much.

#128

Thanks for the info @bojack. I agree that it is best to keep it simple. So for now we want to buy a developed world ETF. VEVE is indeed very small, so the alternative is the iShares Core MSCI World UCITS ETF (SWDA, IE00B4L5Y983). On our DeGiro account we can buy it in USD on the Swiss Stock Exchange.

What I don’t understand is why we can buy a Vanguard ETF (VUSA, IE00B3XXRP09, another ETF we are looking into buying) on SWX in CHF, but we can only buy the iShares one in USD on the SWX. Maybe it doesn’t matter but I don’t understand it so if anyone has a simple explanation please do let me know!


#129

The Vanguard fund is trading in CHF and distributing dividends in USD. The Ishare fund is trading in USD accumulating dividends in USD.

What i have seen, it’s that funds which are accumulating need to be traded in the same currency as the dividends distribution.

Why not buy Vanguard Ftse All-world ucits ? this fund also includes emerging markets, ~10% of the total, which has no major impact on the return or volatility


#130

Thanks @wapiti for the prompt reply!!

Yes the Vanguard FTSE All-world is also good but we have decided to avoid China - although as you say the 10% weighting is not much.


#131

I guess the simple explanation is that the fund provider (iShares) decided not to offer it in CHF.

You can check on the fact sheet, on which stock exchanges, and in which currency is the ETF available. For example, VUSA is sold at LSE in GBP and USD (because of this, it has two different tickers, VUSA and VUSD), CHF at SIX, EUR at Euronext.

https://global.vanguard.com/portal/site/loadPDF?country=be&docId=2108

Or you can use JustETF:

I was considering buying VEVE at the beginning, because it has a much lower TER than VWRL. But in the end I don’t think this difference is so big. And VWRL consists in 90% of VEVE, because emerging markets have in total a very small capitalisation compared to developed.


#132

Hello all,

Just joined this forum and very happy to have found some excellent Switzerland related information, that’s really fantastic.

To share my targeted ETF portfolio I’m building (I have some more investments abroad, but that’s less relevant):

VEUR 24%
VNRT 24%
VFEM 24%
Intentionally somewhat overweight on EM, and no Japan for the moment
thinking to top up the equity part with some WOSC (Small Cap) later

ITPS 14% (for the time being)
Cash 14% (to be converted to bonds at the right time maybe)


#133

Thinking of modifying my portfolio this way:

40% EUR:

  • Here I’d like to converge to one single fund, tracking the STOXX600 index. I found this one with a low TER of 0.07%, but then it says “This fund does only have marketing distribution rights for Austria, France, Luxembourg, Sweden, Spain, Netherlands, United Kingdom, Germany, Italy, Norway, Finland, Denmark.”- anyone knows what it means in practice?
    https://www.justetf.com/ch-en/etf-profile.html?isin=LU0908500753

60% USD

  • 25% voo
  • 15% vioo
  • 15% vwo
  • up to 5% single stocks / precious materials / crypto / etc

I weight USD more than EUR even though I will most likely never live in the US, because I plan to invest also in real estate in EUR (I will eventually retire to an EUR country if not CH).

What do you guys think?


#134

Hi mustachians,

Here is my portfolio at the moment:

  • 40% equities (some ETFs, allocated according to MSCI ACWI by myself)
  • 40% fixed income (⅘ global government and corporate bonds single ETF hedged to CHF and ⅕ US/non-US TIPS single ETF hedged to EUR)
  • 15% commodities (⅔ commodities ETF, ⅓ gold ETF; I am reconsidering this allocation)
  • 5% cash

All of them are invested on (mostly IE and a few CH domiciled) ETFs, and mostly from iShares. Overall the portfolio has weighted TER of 0.13%.


#135

Hello r2d2,
go to have a look at my post about commodities to see what means commodities other than gold and the risk associated.


#136

Dear Mustachians,

First of all I would like to apologize for my lack of knowledge on the Topic and would appreciate any feedback.

1- I have bought some VUSA (CHF) (not much just to get started and not be paralyzed by inaction)
2- However having read some posts on the topic, I now think that VT is more diversified and probably closer to what I am looking for long term.
Therefore I have a first question: Is there any point in keeping both ETFs - VT having the majority - or absolutely none? I understand it would only increase US exposure.I don’t necessarily have a problem with it. Would then 80%VT and for instance 20% VUSA be ok to have a slight increase in US exposure or should I simply sell the VUSA now and focus on VT?
3- I can see that VUSA is domiciled in Ireland and VT is domiciled in the US. Does it make any difference from tax perspective?

thanks for the answer


#137

hey @maillekeule,

do it :wink:

the difference between 100%VT and 80/20 VT/VUSA, in case you are fine with both asset allocations, is you have double the transactin costs, more effort declaring taxes and managing your portfolio, etc…
overall, potentially very minor differences. unless you trade at expensive swiss brokers…
i dont see any other hard reason. however i also cant’t see any plausile reasoning on why to increase SP500 exposure over that of VT alone.


#138

it makes a lot of difference from the tax perspective. that is the reason why the Irish ETFs exist in the first place. For Swiss domiciled investors, it is fine to stick with the American versions of ETFs, because we are not hit by 30% withholding tax on dividends, but just 15%, and even that we can get back from the Swiss tax office.

I also own VUSA in CHF and later on I bought VT. VUSA is an unfortunate fund to keep, because it is hit by these taxes I mentioned above. That’s why I will replace VUSA with VFEM. VEUR would also be an option.

You might be tempted to close the Swiss broker, but I think, since I went through the trouble of opening an account there, I will keep it. In the end, it’s not bad to keep your portfolio split between 2-3 brokers, especially if you invest 90-100%.


#139

I’m a beginner here, so don’t take my words for advice, but my portfolio currently consists of

70% Vanguard FTSE All-World UCITS ETF
20% SPDR MSCI World Small Cap UCITS ETF
10% UBS ETF (CH) Gold (USD) A-dis

All traded in CHF on SIX via Corner Trader.
My bet on gold is that it will react inversely to stocks in crisis times and I will use it to rebalance. We’ll see how that goes.


#140

I like in your portfolio that it is simple and that you obviously put a lot of thought in your strategies.

I shudder a bit remembering the TER of SPDR MSCI World Small Cap (0.45%). And I really wonder why UBS named their gold etf “dis”. :thinking:


#141

I want to start a portfolio using VTI and VXUS. I choose these two funds over VT because of reasons listed here: Tax optimisation for ETF investing

I am still not sure about what allocation I should choose, should I just mirror VT every year? e.g. currently ~56% US 44% exUS?
Doesnt holding VT make more sense, because the allocation is adjusted automatically on the fly?

So lets say I go with the 56%US/44%exUS split now. and in 5 years time lets say VT is 49%US and 51%exUS, and I never adjust it, wouldn’t have holding VT all this time, made more sense and a greater return?

What would your guys strategy be for a VTI/VXUS(or VEA) Portfolio?