Starting my investing journey in Switzerland

Investing / Portfolios
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Hey guys,

Here is my first post on Mustachian. For a bit of context, I just came back home from a 4 years expatriation in Australia and decided to settle down in Vaud Canton. I would like to start investing slowly but I’m a bit unsure about which strategy to go for. I’m currently 30yo, have a stable 95k CHF income and no dependents, so a pretty long investment horizon.

When I moved to Melbourne in 2021, I had left about 40k CHF (still worth around 40k now) in a Credit Suisse fund that basically did not go up at all, as the positive gains were just eaten by the fees. Having come back now with about 155’000CHF consisting of my savings (that were held in a 5% HYSA account there) and my Australian retirement pension.

Now that I’m back I have started a Finpension 3a pillar in which I invest 604CHF monthly with the following strategy :

88.3 % CSIF (CH) III Equity World ex CH Blue - Pension Fund Plus ZB
8.3% Swisscanto (CH) Index Equity Fund Emerging Markets NT CH
3.0 % Swisscanto (CH) Index Equity Fund Switzerland Total (I) NT CHF

It’s also important to note that seeing as I missed so many years of 2nd pillar investing, I have a possibility to buy back about 50k CHF into my 2nd pillar.

I also created a IBKR account that I would like to use more for a “VT and chill” as I don’t have too much time to spend on my portfolio. So I basically have about 150k CHF to invest there, as I want to keep around 30-40k CHF as a safety net. I guess dollar cost averaging that sum over the next 1 or 2 years might be interesting or would you just drop it all into some ETFs at once ?
Do you have any suggestions on how should I best allocate those funds (maybe 80% VT and 20% in a Swiss ETF) ?

To be honest I’m a bit lost :sweat_smile:

Thanks guys for reading through and for your help !

Happy Easter to y’all :slight_smile:

Greg

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I’m just writing about some points that came to my mind reading your post:

  • “VT and chill using IBKR” is fine but please evaluate how much do you feel comfortable with the whole US domiciled ETFs held at an US institution (there is a lot of discussion on the forum about this). Both about the “estate tax” but also related to the latest events.
    As you are starting, try to make the best decision for you so you avoid regretting and having to change later.
    Also, make sure that 100% equity exposure is the right amount of risk for you.
  • Having a 20% home bias can be good, especially if, from what I understand, you are Swiss
  • Okay also for the Finpension strategy, the 3% CH exposure won’t change much, but it’s okay
  • For the 2nd pillar buyback I would do it later in life (you’re young, this money will be locked for a long time, …).
  • DCA vs lump-sum: it’s about your feeling.

Welcome back!

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Hey Oslasho !

Thanks for your answer :wink:

I agree with you, DCA would definitely feel more prudent for me.

I think I’ll go with around 20% home bias.

Cheers

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Hi campFIRE,

Thanks for your answer.

I do feel pretty comfortable about US domiciled ETFs. Also isn’t there a tax advantage to have US ETFs ? What I’m more worried about is the USD weakening against CHF and the impact it would have on a VT strategy. Would it really be 100% equity exposure as I would also hold some cash ? Do you recommend a more cautious approach ? I feel like I can absorb quite a bit of risk, having no dependants, a stable income and no huge expense forecasted in the near future.

I understand your remark regarding the home bias on my Finpension strategy, I will correct it. Does it make sense to have home bias on both IBKR and Finpension ?

Again thanks for your answer and hoping you’re having a great day :wink:

Gregory

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Also isn’t there a tax advantage to have US ETFs ?

Yes, there is!

What I’m more worried about is the USD weakening against CHF and the impact it would have on a VT strategy

If this concern comes from the fact that VT uses USD as fund currency, you don’t have to worry. As discussed in the forum multiple times, the fund currency is irrelevant*
If this concern comes from the fact that ~65% of VT are US companies, then you need to understand if the index tracked by VT is the right one for you.

Would it really be 100% equity exposure as I would also hold some cash ?

True, with cash and second pillar you won’t reach 100% equity exposure. But you will be quite close to it.

Does it make sense to have home bias on both IBKR and Finpension ?

As you prefer. Once you decide to have, let’s say, 20% home bias, then it’s not super important where you hold it (keep in mind the cost and the limitations of the 3rd pillar tho)

*1 kg of gold will be always 1 kg of gold, regardless of you buying it with USD or EUR.
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