Personal strategy on Finpension 3a

Investing / Brokers
1

Hello,

Great content MP, you are doing a great job here.

I have a pillar 3a account with UBS fully invested in Vitainvest Passive 100 Sustainable Q (ISIN CH1110134157), which has performed well since inception (+11.6% in 3 years).

In the same timeframe (last 3Y) the finpension Global 100 strategy with either UBS or Swisscanto has only achieved +6% (over 3Y, not per year).

I realise it’s a different strategy but given its possible to customise your strategy to a certain degree, I was wondering if anyone had any idea on how to replicate the UBS Passive 100S in finpension.

Thank you

2

If you look at these strategies, they have following variables

  • allocation to Swiss equities
  • allocation to international equities (ex USA)
  • allocation to USA
  • how much of International and US equities are hedged vs unhedged

It depends on what exactly is the allocation for these items in each strategy. It is not Apple to Apple comparison.

Another thing you need to remember is that UBS passive fund in 3a have an additional 0.65% custody fees which is not part of TER. So the results you see on fund prospectus do not represent the total costs.

In my view, there is no way that exactly same strategy will perform better or worse on UBS vs Finpension. They are passive funds so they should perform the same. The main difference will be dependent on TER of funds and custody fees.
Total fees on UBS = 0.25 % + 0.65% = 0.9%
Total fees on FP = 0.39%

I suggest not to worry about what the allocation of UBS funds is. Just focus on what allocation you want. On finpension you can do it easily using multiple fund options.

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3

The reason behind my post is indeed because the fees with UBS are too high.

I already have a separate 3a with finpension and I want to transfer the existing UBS fund to a separate finpension 3a. It’s not about deciding what I want: I know that, I want something as close to UBS vitainvest passive 100 as possible, but on finpension. Hence I am trying to figure out how to best replicate it, while accepting it won’t be exactly the same.

4

Look, the composition of this fund is clearly stated for example in monthly factsheets or on information pages for this fund on many financial services websites. It’s a fund of funds, there are certain holdings of funds on Swiss stocks, on MSCI World ex CH, hedged and not, and on MSCI emerging markets, all presumably “Sustainable”. You will find very similar funds at finpension. If you check UBS funds offered by finpension, you might even get the same ones, or almost.

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5

I understand the urge to mirror the UBS fund in finpension based on your past experience. But if you look rationally, you also realize that the chances that an allocation similar to your previous UBS fund would outperform finpensions strategies (100% equity) in 50% of the case in the future, while it will be worse in 50%. No way to know. :wink:

Just as a thought, in case you get frustrated during the mirroring procedure. :sweat_smile:

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6

Got it.
I couldn’t find exact composition of Vitainvest 100. But I see Dr Pi mentioned some information about the composition. So perhaps that helps

7

When I look at the datasheet, it doesnt look to tell the same story:

Valeur d’inventaire (CHF, 31.05.2024) 105.90

So I suppose that the performance you’re talking about is the Dollar Cost Average (with CHF and not $) performance you got with this found since 3 years by investing a regular amount each month, isn’t it ?

I guess it’s the same value, with 0,1% difference, just no DCA

you have the composition here (Top Holdings): Rechtliche Bestimmungen (Disclaimer) | Swiss Fund Data

It looks to be pretty similar to what finpension propose by default for sustainable strategies with differing proportions

With finpension, think you have to add to the finpension fees the management, buying and selling fees of each fund that will compose your strategy

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8

Thank you, I did look at the composition and I don’t think there is a “very similar fund” rather it would require a customised strategy. I was wondering if anyone had already gone down that route before I pull up my Excel sheet and start crunching the numbers.

9

I guess maybe mirroring is not even what I want to achieve or at least not an exact copy, it’s more about a similar geo exposure since I usually torn between Global vs. Switzerland only investments since the average return is sometimes similar over the long term. I have a Global 100% portfolio with finpension 3a hence this transferred portfolio should be different in my opinion, hence why I am using the UBS vitainvest 100 as reference. It is different and successful so far.

10

Good point but what is the difference between those two values?

I was looking at this chart. If you scroll down to ‘Performance and Prices’ the default view is from July 2021 (fund inception) and the indexed fund price in CHF is 111 (+11%)

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I have meant underlying funds that constitute this UBS fund. There is really no magic, they are just index funds. Look at the actual composition at the bottom:

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12

Funny thought… the UBS 3rd pillar offer is quite bad (high TER and they don’t use WHT tax preferred funds). But when you have a look at lets say the Vitainvest 50 or 75 funds:
UBS Vitainvest Passive 75 Sustainable Q | CH1110134140

They are multi-asset funds, come with sensible asset allocations, relatively low TER and they are publicly tradeable. To be honest - didn’t see a Switzerland based multi-asset product with such attractive cost. For the traditional “don’t want to fiddle with investments and has less than 100% risk tolerance” investors - these funds are super good?

13

Unfortunately not really

We probably understand different things with “publicly traded”. For me it means I can buy them with many different brokers, not only at the issuing bank.

14

Thats exactly what I meant… you CAN buy these funds with any broker of your choice. Not only with UBS. Clearly, you don’t want to buy these funds with a UBS Depot / Fund account - but with lets say Swissquote - its quite a good deal actually.

15

So you mean for someone who would typically want to have a world equity strategy with overweight on Swiss equities then let’s say they have two options

  1. VWRL/FWRA + CHSPi
  2. UBS vitalnvest but buy at Swissquote

And you are saying option #2 is not really bad

I agree. It can be a one ETF strategy.

But I think CH domicile for this fund would be disadvantage for US allocation vs Ireland domiciled funds. Isn’t it?

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16

Hmm… not nescecarily for that profile. The traditional World plus Swiss investor is better off with two ETF. I am more talking about the more or less clue-less investor that doesn’t quite know what they are doing. For them, a 100% shares strategy is wrong as they simply can’t take the equity Risk. There, a Vitainvest 50 or Vitainvest 75 strategy was ideal. It provides automatic re-balancing.

Clearly, TER of 0.25% is only one side of the coint, the CH fund domicile is another issue. But still. These people so far only have the choice of 1.5%+ Wealth Management Mandates, 1%+ Portfolio Funds (generally active) or Robos that come at 0.6%+. UBS with their 0.25% offer signifficantly undercut this. VERY surprised to see UBS doing this haha.

So far, I recommended clueless investors to go to Avadis (Strategy 40 to 80). Going forward, I think I just recommend them to go to Postfinance or Swissquote and buy these funds. Clearly, thats not for you and me.

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