I was looking for a few opinions on the bond ETF’s that I have decided to purchase for the fixed income portion of my portfolio. The equity portion has long since been sorted and the amount I intended to put into bonds has been sitting in cash for a while.
Ideally I would be purchasing some CHF government bonds, but I would rather have cash and invest in equity than this option at the moment (based on the returns vs my perceived risk). I’m not comfortable investing more money into equity with the high valuations there are at the moment, I have a pretty good exposure anyway and with my investment portfolio my intention was always a 80/20 equity/bond split which I will achieve once I sort the fixed income portion. I want to have the additional asset class of fixed income in my portfolio.
iShares £ Corp Bond 0-5yr UCITS ETF (IE00B5L65R35 - IS15)
Being from the UK I do have some £/GBP. I am slowly transferring this to CHF as I’m intending on staying in Switzerland for the rest of my life. In the meantime I can invest in this fund, and as I hold the GBP currency already anyway, effectively no change in my currency effect. Didn’t want the interest rate risk of a longer duration fund.
US92189F4946 - EMLC - VanEck Vectors J.P. Morgan EM Local Currency Bond ETF
I am keen to have some level of risk/return in my fixed income portfolio. There is no point in having a USD hedged EM fund so went for this one with the local currencies. I see the etf is also quoted in CHF but the fund seems too small so went for the US exchange version…anyone have any information on the CHF equivalent, would this be my better option (the returns were lower - was this purely the currency impact?)?
BND - Vanguard Total Bond Market ETF
Ideally every government and corporation would issue debt in CHF, as they don’t, I opted for this fund. I realise that I open myself up to the currency impact, CHF vs USD. Seemed like a good core ETF for my portfolio though. Covering me in many future situations in the market and I am not sure how to get around the currency impact - if there is something similar in CHF I’m listening!
Do I have any glaring errors in my thought process? I’m I making any stupid mistakes (like I have in the past by buying negative yield CHF government bonds!)? Tax / execution perspective/errors?
Thanks for your help.