Personal strategy on Finpension 3a

Investing / Brokers
21

I would keep it simple on the third Portfolio, yet count on some re-balancing bonus.

Based on your prior Portfolio, what about:

  • 40% Equal Weighted Regions aka 10% US, 10% Europe ex CH, 5% Japan, 5% APAC, 5% EM and 5% World Small Cap => addresses the point that regions can sometimes become too expensive/riski like currently US
  • 20% World Quality & Value as Counterweight to Quality (10% Each) => Gives you some Growth but also offets the Impact
  • 20% Switzerland aka 10% SMI and 10% SPI Extra (Mid&Small) as Home Country Bias
  • 20% Diversifiers with 5% RE CH, 5% RE World, 5% Gold and the remaining 5% as either Global Aggregate (CHF Hedged) or Global Corporate (CHF Hedged)
22

Perhaps a specific question about finpension Global 100: The list is available:

S&P 500 Index 66 %
EURO STOXX 50 Net 10 %
MSCI Emerging Markets Investable Market Index 10 %
MSCI Total Return Net Japan Index 6 %
FTSE 100 Index 3 %
SPI 2 %
MSCI Pacific ex Japan Net 2 %

As I have an IBKR account, I can enter all the ETFs from finpension myself. What is the difference if I take it from fp?

23

tax savings if you take it for 3a.
Plus you get the institutional TER and not the consumer one, sometimes.

24

I came up with the following with ChatGPT :slight_smile:

  • strong Swiss tilt with a lot of dividend flows
  • hopefully doesn’t correlate too much with the other 2

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As GPT-based stuff is completely unable for any backtests (it just hallucinates numbers as it sees fit), I wonder where I could do an ETF backtest for the last 5 years? Also, what do you think of this dividend-rich idea?

EDIT: I added some thought and came up with the following final candidate instead

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  • full CHF security
  • MinVola UBS fond is actually quite nice in performance, same as Small&Mid Caps from Swisscanto (the UBS one is awful)
  • a bit of European stocks to counterbalance the Mag7 on the other portfolios
  • Real estate belongs to a Swiss PF
  • Crypto exposure because of my personal conviction (and because Gold is at ATH all the time already)

Comments welcome. :slight_smile:

25

Normally, I would say dividends don’t matter. But they are tax-advantaged here. So, maybe? But it mainly just doesn’t do USA and calls that a dividend strategy.

I understand that you want to explore things with inconsequential amounts of money. Two things:

  • Good results do not imply good plans, and vice-versa. 5 year backtests have next to no information about future returns.
  • To increase returns gets harder and harder. All that additional time spent and the increased complexity for another maybe-maybe-not 0.1%? Investing in a better paying job has often a higher return.

makes no sense in a 3a, not even if you are @stojano. Tax treatment, security, and flexiblity is just that much better outside.

1 Like
26

It does Swiss bias with a tax-free divident tilt that should be stable income, lower in good times and more stable in bad times. Plus some anti-US tilt with EU ESG.

Considering I have over 50k is the other two accounts, and those are heavily US-tilted, it sounds like a fair balance.

I’m convinced of a huge BTC appreciation so this is a no-brainer booster for long-term on the portfolio metrics. Would you even then say so?

27

Because you can keep it in taxable account and pay no tax. There is no specific advantage to have it within 3a framework unless you are trying to shield from wealth tax.

Let’s say you believe BTC will grow 100X (20.25% CAGR) in 25 years. When you will withdraw 3a, you would end up paying lumpsum tax on that appreciation.

So let’s flip the question other way, what advantage you see while keeping BTC inside 3a versus outside 3a?

I think @stojano case is different. He only invests in BTC so he is simply maximising BTC everywhere.

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28

Almost zero. (Tax advantage, albeit minimal for 5% of 7k yearly = 350CHF).

But the question is not where I want to keep my crypto, but the “what do I buy with my 7k yearly?”.

But if I have to (=choose to) keep max 3a every year, and we accept the assumption that BTC will 10x in 20 years, what do I hold in that 5% instead of crypto?

  • Bonds? Nah
  • High yield? Ridiculously low growth
  • Stocks? Already have a lot of them elsewhere

I would probably keep my third 3a account solely in a mixed crypto index fund if I could, even though I’m a crypto-averse investor. It’s most probably an asset class that is going to fly and rebalancing and indexfunding will keep the winners in your basket over the decades to come.

29

That portfolio is weird.

  • why misleadingly label the funds as “dividend stocks” when they are based on the bog-standard SPI and MSCI World/Europe/EM indices?
  • why ESG?
    • and why on DM and EM but not on non-factor CH?
  • why CHF hedging?
    • and why on Europe and DM but not on EM?
  • why increased weight of Europe and EM compared rest?
30

Sorry I don’t understand your point
What’s your assumption for BTC is for you to decide. It can 100X or it can stay 1X or be 0.5X, who knows.

What I am saying is that from tax perspective, keeping BTC outside and everything else which produce income inside 3a is better. Or else you will end up paying tax on gains which are normally tax free.

If you don’t have any other asset in taxable account then sure BTC inside 3a is also fine.

——-

Let’s take an example. Let’s say you have 50K in 3a accounts and 50K in IBKR account.

Case 1 -: your portfolio is 100K BTC, then of course everything is BTC

Case 2 -: if your portfolio is 25K BTC and 75K stocks then it would be better to split (3a -: 50K stocks , IBKR -: 25K BTC & 25K Stocks)

Case 2 is valid if your assumptions are one of the following -:

  • stocks are not meme stocks with zero income
  • Stocks will underperform BTC
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31

It’s more about the tax treatment. When cashing out, you’ll pay taxes on the final value of your 3A (including capital gain).

If you believe that crypto will skyrocket, hold them outside of a 3A. The capital gain at sale will be tax free.

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32

Then better to invest in the less performing assets in our 3a
 At least we will pay less taxes at withdrawal


33

While I am aligned with the principle/Theory

I think we are really exaggerating about the taxable gain of Equities vs. BTC in 3a

We are talking about a max of 5% allowed Crypto investment in 3a

If those 5% are equities rather than crypto, and for similar performance, the tax gain would be : 5% x 2% (approx. dividends yield) x 30% (Approx. marginal tax)

So something like 0.03% p.a. ?