This. As the FED/SNB rates are just 1% apart now, hedging costs are currently just 1%/year.
The main risk in main knowledge is the currency variation of USD/CHF pair that can reduce the CSIF World performance compare to the CSIF SMI the day I move to cash.
I just felt more comfortable with an allocation closer to the MSCI World.
IMHO, the bigger risk is the macroeconomic forces at play. In brief, thereâs a coming short squeeze on the US dollar given the pressure on global US-denominated debt (government, corporate, household). The US federal reserve has set up swap lines with 15 allied nations (probably Turkey soon too), to provide short term eurodollar liquidity. Non-swap line nations are seriously screwed. They will scramble for US dollars, sending it higher and higher. US equities will rise as global capital seeks safety, creating a bubble. Most if not all currencies will fall, and many will fail. Emerging markets will suffer badlyâexcept maybe commodities in the long-long run.
This is the Dollar Milkshake Theory. Google it (Brent Johnson) if you want to details. If you donât, then at very least avoid investing in non-swap line nations (ie. any emerging markets). Katusa Research explain it well, although theyâre focused on commodities.
Regarding allocations in VIAC, I think thereâs few options for us other than US equities and gold. The Swiss franc is safer than the euro. I will rebalance at the end of this month, but havenât figured out what Iâll do yet.
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EDIT BY MODERATION:
Referral codes are not allowed anymore on this forum. This is not VIAC marketplace.
Might want to edit your blog post about it:
" UPDATE 03.09.2018: I donât have codes anymore. But ask on the forum if another reader can share one with you."
Hello all,
I hope this is the right place to post.
Iâm mulling over whether my wife and I should contribute to our VIAC 3a pillar in 2021 - if so then weâd do so in January. We both have the Global 100% strategy. The alternative would be to put it into our VT funds through Interactive Brokers.
I have crunched the numbers in the following way, and would appreciate anyoneâs feedback on if there is anything I havenât taken into account. All the figures below are based on returns after a period of 25 years.
Option 1 - Do not contribute to VIAC, invest in VT through IB instead
13766 CHF earning 5% interest in VT with fees of 0.08% through Int. Brokers: 45 697 CHF
Option 2 - Contribute to VIAC
13766 CHF earning 5% interest in VIAC Global 100 with fees of 0.52% through Int. Brokers: 40 954 CHF
Tax saving by us both contributing to VIAC 3a: 2000 CHF
Tax saving of 2000 CHF invested in VT, earning 5% interest in VT with fees of 0.08% through IB: 6639 CHF
Option 1 - Return in 25 yearsâ time: 45 697 CHF
Option 2 - Return in 25 yearsâ time: 40 954 + 6639 = 47 593
Saving by taking option 2: 1896 CHF
The tax saving may seem less than one might expect, though my wife is taking a few months off beyond the end of statutory maternity after our 2nd baby was born last week, and we live in Canton Zug, which is tax friendly anyway.
You forget that dividends are taxed in a taxable account and that you need to pay wealth tax on your taxable net worth.
Taxes on dividends and the wealth tax are higher than the difference in cost.
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Aha. Thank you. I hadnât figured those into my calculations.
Pillar 3a is a non-taxable account, right? So this makes it even more attractive for me to go with VIAC�
Yes, but there will be a ~5% tax on withdrawal of a pillar 3a account.
I want to contribute the full amount for 2021 (6,883 CHF) right after year end on VIAC 100 and be part of the rebalancing on Jan 4th 2021. I just contacted VIAC and they told me the only way to be part of the rebalancing would be if they get the money the same morning of Jan 4th before they start the process of rebalancing. I have an account in PostFinance and I think if I generate the wire transfer order today with value date Jan 4th it will arrive on Jan 5th and therefore I will miss the rebalancing and will have to wait until Feb. I should have done the transfer with value date today to arrive in VIAC on Jan 4th but I didnât think on it until nowâŠ
Do you know if I make the transfer from Revolut with value date 4th of Jan if it will arrive automatically the same morning 4th of Jan? I think Revolut has immediate bank transfer for SEPA payments (in EUR depending on the receiving bank), but no idea about transfers to Swiss IBAN WIR Bank in CHF, most probably same issue like with PostFinance, isnât it?
I canât ofer help for 2021 but it is interesting from wealth tax perspective too. Money get debited on 31.12 so not in account / year end balance anymore. Get credited on first working day of Jan and invested accordingly.