OK, so please don’t kill me for my stupid questions. I was thinking about investing in ETFs for a bit and just wanted to try it out (with CHF1000) in order to get a feeling for the tools and the whole setup (I want to invest at least CHF10000 later on). I wanted to invest like recommended by this guy at The Best ETF Portfolio For Switzerland In 2021 - The Poor Swiss (20% CHSPI and 80% VT). I wanted to buy VT and opened an account on DEGIRO for it. I found VWRL instead of VT (no VT at DEGIRO it seems) and I have no idea why but I was thinking this is exactly the same ETF. So I purchased it fo about CHF800. Now it turns out it’s not even close the same ETF:
The TER is higher on VWRL than on VT
VT holds also small caps, while VWRL only hold larger caps. In practice, VT has more than twice the number of stocks of VWRL
VT is American, so you can reduce greatly the withholding on dividends, this makes another about 0.15% fee for VWRL
VT 5 years performance is 54% while VWRL is only 38%, this is extremely significant
So what should I do now?
Hold until I make enough to sell and then sell?
Or just hold it until I retire?
Call DEGIRO and ask them to undo the order? Is that even possible?
My goal is to invest more and more in VT and CHSPI. I already have 97% of my 3a in VIAC and in stock with the global 100 strategy.
Yeah… I’m currently opening the IBKR account but it seems to take an eternity to review my documents.
I’m probably just pissed that I’ll lose the few CHF because of my stupidity, that’s why I’m asking about holding VWRL until I make enough for the sell to be profitable.
There are people on this forum that lost 10k at the beginning of their investment careers (due to some 3a insurance scam). It doesn’t matter if you sell the ETF now for 980 CHF or whatever, because this mistake is nothing compared to others. It’s probably one of the cheapest mistakes I’ve read in this forum.
That’s why you should be happy, sell it and invest it on IBKR (I know it takes a couple of days till you are approved).
As @thepoorswiss is also a forum member it would be useful to involve him in the discussion; in case of mistakes in his data he could amend the blog post
You bought what is, by and large, an equivalent (European-based) product.
Even though the gods of micro-optimisation (and Cortana, their chosen prophet preaching us the virtues of index funds) might make you doubt and lead you to believe otherwise.
The small share of small caps (that have underperformed large caps for a couple of years now) doesn’t make a substantial difference. Neither does the large number of stocks at the tail end (of miniscule) holdings.
I still stand by my assessment not long ago that VT is a bit more efficient - between 0.1% and 0.3% “better” a per year. So roughly a percentage point in 5 years or so. But otherwise VWRL is a very reasonable substitute.
If I understand it correctly, you are at the moment investing CHF 1’000 and want to expand to 10’000.
IBKR has a custody fee. If you spend less than 10 USD in trading fees each month, you will have to pay the remainder. These 10 USD per month are much higher than any TER difference between VT and VWRL and most certainly higer than the difference in potential profits. On the other hand VWRL is on the free Degiro list of free ETFs, so you can trade it once a month without fees.
So my advice is: By all means stay with Degiro and VWRL until you have a much higher investment. According to some finance blogs the sweet spot seems to be at around 60’000 USD.
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