My first IBKR and Finpension Portfolio

Hi all
Newbie here still studying to create his first IBKR and Finpension Portfolio.
I have a little question regarding MSCI® World ex Switzerland Index.

I want to have it in my IBKR account (US Fund domicile) but i still don t find any product unless it include emerging market as well.
The only choice that suit my need is Swisscanto (CH) IPF I Index Equity Fund World (ex CH) Responsible NT CHF from Finpension; and now comes the troubles :slight_smile:

What do I calculate for taxes?
From what I have studied so far in this forum (gold mine), when investing in American shares it is always better to opt for funds domiciled in the USA.

Can anyone help me?

1 Like

Welcome to the forum!

Am I right to assume that you are not very long time in Switzerland?

An IBKR account is a part of your normal, so called taxable, wealth. You pay income taxes on anything you earn, deposit cash to IB and buy “securities”. An individual investor is better served by low-cost, diversified index funds. The value of funds at IBKR is a part of your wealth that you put into the tax declaration, dividends are added to your income for tax purposes (in Switzerland).

Finpension is mostly know here as a service provider for 3a scheme. This is a tax-advantaged “saving” scheme: the amount you can pay in is limited, tax-deductible. 3a assets are not declared for taxes, but are blocked.

is a fund that you can only buy under the 3a scheme. It is very good, because it has additional tax advantages available only to pension funds. And as it is in 3a, there is nothing to declare for taxes.

AFAIK, there is no ETFs on vanilla MSCI World ex CH.

US investors like to segregate US stocks from the rest of the world, so all world funds are not common. VT is the golden choice recommended here, but there is also for example URTH without emerging markets.

1 Like

Thank you for your response Dr.PI.

Actually i’m already “few” years here in Switzerland (and i’m swiss guy too because of my Mother, but born and lived in Italy), but i was never interested to my financial situation, such as investment (and I’m a little ashamed for it if i think it with my current state of mind)

By the way: yes, I know (now) how it works when it come to invest to the 3a Pillar (7056chf capped for 2024 that will be 7258Chf for 2025).

I red really a lot in the last 2 weeks in this Forum especially your different examples to take taxes advantage from our investment.

So now (before i literally push any botton to buy any etfs) i was studying to create my long term portfolio (20+ years)

Thank you again for your response.
I will check the etf that you recommend me and, maybe, if it s not a problem, i will share with u all my choices justifying themselves with the logic and thought from which they were born.

Hi all
Here the Newbie again :slight_smile:

As mentioned above, I would like to share with you all my idea and strategy (with the reasoning behind my decisions) for creating a portfolio with a minimum estimated duration of 20 years.

My basic idea is to invest 100% in stocks (given the duration of the investment, assuming that I am aware of the very probable drawdowns that this type of asset allocation brings with it) trying to cover the entire world with an imbalance towards the US and CANADA markets.

The portfolio is distributed as follows:

  • WORLD ex CH + WORLD incl. CH (only developed countries) 56%
  • CANADA 10%
  • EMERGING 8%
  • All EUROPE 15%
  • SWISS IMI 3%
  • PACIFIC ex Japan 3%
  • JAPAN 5%

For tax advantages (IBKR vs FINPENSION) it is divided as follows:
FINPENSION:
World ex CH 25.6%
JAPAN 5.00%
PACIFIC EX 3.00%

IBKR:
WORLD incl CH 30.4% (URTH)
CANADA 10.00%
EMERGING 8.00%
ALL EU 15.00%
SWISS IMI 3.00%

Below a premise: which ETF I considered optimal for my strategy and which one I prefer, as well as the % weight on the total portfolio.

Having already optimized all my fixed expenses and calculated approximately (worst case) the variable ones, I calculated a >50% monthly savings to invest. (Therefore the monthly amount, as well as the annual amount, reported in the image is greatly underestimated.
Obviously increasing the monthly/quarterly amount of the investment, will automatically change the % of allocation destined to IBKR.


Here instead is an image of all the calculations made based on the geographical allocation for each ETF (with the relative real weight on the portfolio)


From what I have studied so far I think my strategic plan is quite good.

I would be very happy to have a constructive discussion with you who are much more experienced than me. :slight_smile:

In addition to this, there are other doubts that torment me; one above all is:
How convenient is it now to start investing (PAC aka Accumulation Plan) in the ETFs that I have chosen given the market in ATH? (therefore Finpension only cash?)

Excluding to proceeding with a PIC(aka Capital Investment Plan) because I think is absolutely senseless with market ATH.

Thanks all in advance :slight_smile:

First of all, you have clearly thought it through and you know what you are doing. It all seems intentional.

Only two questions would be -:

  1. Would you be fine if after 20 years , your portfolio returns lower return versus one fund portfolio which only invests in VT in IBKR & “similar mix like inside” Finpension ?

  2. Are you aware that Truewealth is cheaper than Finpension at this moment?

If answers are yes, all looks good :slight_smile:

1 Like

:clap::clap::clap:

Your portfolio is too complex. How much do you expect it to be in 1 year, 20k? What do you want to achieve with a zoo of funds like this?

Not worth to bother with optimization. One all-world fund such as VT will do the job.

Total market is a simple and reliable strategy. But if you insist on overweighting US (chasing past performance) and Canada, add a total US market ETF (VTI) at IBKR and Canada index fund at Finpension.

Markets are close to ATH almost all the time.

1 Like

3 posts were merged into an existing topic: Truewealth 3a Pillar

So you are telling me that I have fallen into classic overfitting… I see :sweat_smile:

But if you insist on overweighting US (chasing past performance) and Canada, add a total US market ETF (VTI) at IBKR and Canada index fund at Finpension.

Actually i want to cover all the World (like VT yes) but don t be so much overweighting with US (VT 62.9%).

That s why i considered to have so much ETFs in my Portfolio (so US will be ca. 40%).

:thinking:

Well, then you need to add World ex US ETFs. Canada is too small to matter.

Yes i want an imbalance towards the US and CANADA markets but not that much :sweat_smile: :sweat_smile: /

Good question. The response is of course no :slight_smile:

I’m so sorry if my ideas / reasonings may seem strange. I just want to do things right

In this field, most important is to start.

2 Likes

I totally agree!

So, let’s do things most easier.

FINPENSION:

  • Swisscanto (CH) IPF I Index Equity Fund World ex CH NT CHF 97%
  • Swisscanto (CH) Index Equity Fund Switzerland Total (I) NT CHF 3% (to include Switzerland)

IBKR: (edit)

  • iShares MSCI World ETF (URTH) 95%
  • iShares Core MSCI Emerging Markets IMI UCITS ETF (Acc) 5%

Does it look less like a zoo and more like a serious portfolio? :smiley:

URTH is more expensive and less diversified than VT. Any particular reason to have US ETF on MSCI World an Irish on MSCI emerging markets?

Are you underweighting Emerging Markets on purpose?

Btw. On Finpension, you can have one fund per portfolio. Like this, you don’t need to rebalance and can direct money specifically to a chosen fund.

I see. It was only because i wanted to add Emerging Market with a separate ETF.
So it will be better to just choose VT and eliminate Emerging ETF

I thought was a good idea to have US ETF on MSCI World because of taxes advantage.
IE fund for EMERGING because i red your excel file regarding taxes on dividend (but maybe i’m mixed too much things)

Is 5% too much?

Huh, you probably won’t get any DA-1 refund for many years.

No, too little :laughing: (my mistake).

If you want to have separate ETF for world and EM, maybe a combination of VEA & VFEM could be interesting

However just make sure you really need this separation.

Why would it happen?

I m thinking about it.
Are weeks that im study for a good strategy but now im more confused then before :rofl:

In certain aspects of life , knowledge is a boon.
But I think in investing, it becomes an obstacle because people go into overthinking and over analysis mode (including me) . There are few aspects that one should apply and rest is only for academic purposes or for advanced investors

  • diversification
  • Low costs
  • Long term
  • Tax efficiency (as much as possible but not going down the rabbit hole)
  • Simplicity

Index fund investing helps people achieve a lot of above mentioned principles. One ETF strategy using VT is one of them which is easiest.

To lot of my friends , if they don’t want to think too much , I recommend to buy VT or ACWI or WEBG (depending on their situation) once a month and that’s it. And I can tell you, they are generally better off verus me :slight_smile:

There is a tendency amongst everyone to think that they can build this great portfolio but what exactly is the objective ?

A -: build a great portfolio

Or

B-: track an index

Or

C -: Build wealth over time using equity investing

After lot of thinking , I realised. For me , it’s C. I should not really care if I am 100% tracking an index as long as I aim to track an established and diverse index and I don’t care if my portfolio is great as long as it is diverse enough and cost efficient.

5 Likes