What's your 3rd pillar asset allocation?

Struggling to replicate VT through VIAC without using CHF hedged funds, I’m not really sure how to approach this correctly. Obviously you have to overweight Switzerland massively as the law requires you to invest atleast 40% in CHF, so that’s why (without hedged funds) you are forced to invest 37% in Switzerland, 3% cash.

What about the rest? How did you manage this? I don’t like the idea of having 28% in SMI with the Global 100 solution. I’m thinking more about 5-12% SMI and 25-33% SPI Extra. The other 60% would be invested according to VT (so 60% x 55.3% for USA = 33% SP500 for example, 7% EM, 5% Japan, 3% Pacific ex Japan, 2% Canada). Leaving 10% left either for Europe ex CH or World Small Cap. As Switzerland (with 40%) is already part of Europe, 10% World Small Cap makes more sense.

What are your thoughts?

My recommendation is to look at all your assets together. Instead of mentally dividing them up in pots, make one strategy/asset allocation for all, taking into account the limitations and advantages of each pot.

E.g. 3a is only ~7k per year. Fees incl. currency exchange are more expensive. Dividends in 3a can compound untaxed. Switzerland and Europe have high dividends. If you choose a package with VTI, VEA and VWO, you could slightly reduce VEA for example.

Look at your assets holistically (together).

Edit: SLI is a variant of SMI that helps to reduce the strong weight of the 3 heaviest components (Nestle, Novartis, Roche make up over 50%). This might also be an option.

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I looked into allocating more of my VIAC 3p to REITs a while ago.

This is because REITs have equity like returns and owning some will slightly lower your portfolio volatility.

Under Swiss tax, REIT returns are taxed as dividends/income so they are very unfavourable to hold as a taxable investment compared to equity (no capital gains tax.)

3p could be a good solution as there is no tax on dividends when held in the 3p.

However, my conclusion was that it was more effort than it was worth for my current situation. You can only allocate a certain % (I think 30%) of your 3p to REITs so it would give you a max exposure of a bit over CHF2k a yr. At the start of a 40yr time horizon intra-year volatility is a bit irrelevant to me.

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