Which is your VIAC individual strategy?

[Goyero]

Hi all,

This is my first post after reading you for a long time so let me introduce myself first. I am from Spain, 34 years old, married with 2 kids, leaving in Schaffhausen since Oct 2017, 250K NW, 50-55% savings each month.

In 2019 and for the first time I invested the maximum amount in VIAC 100, same for 2020. For 2021 I am not sure whether deposit the full amount on the same portfolio for the third consecutive year or create a individual strategy, I was thinking on 20% SMI, 20% SPI Extra, 47% World Ex CH and 10% EM. I plan to stay in Switzerland until retirement and my idea is to have 5 3a portfolios to enable a staggered withdrawal.

Which is your VIAC individual strategy?

[Cortana]

Mustachian portfolios

Let us collect some portfolios here! (order might pe put into the list once it reaches a certain length) MP’s 3 fund portfolio 55% All World (Vanguart All Word/ Total Market) 15% SMIM (UBS ETF) 30% Swiss government bonds (iShares 3-7) the The ultimate buy-and-hold portfolio by Paul Marryman 10% SP500 10% US Large cap Value 10% US small cap Blend 10% US small cap Value 10% US REITS 10% international Large Cap Blend 10% international Large Cap Value 10% international Small Cap Blend 10% …

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. …

[dbu]

If anyone finds the info handy, I have just gone through aggregating the FTSE Global All Cap Index proportions vs. the funds offered via VIAC:

	FTSE Targets
US	56.50%
Canada	2.72%
Europe ex-CH (*)	15.03%
CH	2.46%
Japan	7.23%
Pacific ex-Japan	3.45%
EM (*)	12.61%

(*) Note: EM is in fact slightly higher (probably ~2%), at the expense of Europe ex-CH. I stopped summing the countries below 0.1%.

[wapiti]

Yon’t can replicate the FTSE global all cap with Viac because of the hedging. The max foreign currency with VIAC is 60%

[dbu]

I am not trying to do that.
My idea is to explore how it would be to hold most of the non-US assets in VIAC, according to these proportions; and whatever cannot “fit” there sits with IBKR.
It will still be not straightforward, as my 3rd pillar assets are around 3x smaller than at IBKR.
And there might not be the proper CHF-hedged assets to cover the rest (e.g. the 40% CHF exposure rule).

It might be an exercise in vain, but I want to entertain it.

[wapiti]

In fact it’s better to hold only US asset with a 3rd pillar because you don’t pay withholding tax on dividends.

[dbu]

I am recovering those via DA-1, not a dealbreaker.

I am still very strongly leaning towards just leaving the default strategies as they are (Global 100), and then account for their proportions in line with IBKR portfolio.
But I wanted to explore what it would be in the alternative view (and if it is worth the effort).

[Swisslife]

@dbu

I am recovering those via DA-1, not a dealbreaker.

I think what @wapiti meant is the dividend income that counts toward your global income hence increasing the marginal tax rate and being taxed at such. 3rd pillar lets you avoid it.

[wapiti]

Not I really meant the withholding tax on US companies.
Yes, pillar 3 allow to reduce your global income

[dbu]

That’s a fair point, worth considering.

On the other hand the WHT for non-US ETFs (Dev, EM) are not recoverable with the DA-1 afaik.
Thus my thinking to keep (most of) those within VIAC.
I believe @Cortana concluded in the other thread that the non-US funds usually payout higher dividends - so that might be an argument in that favor.

I guess one needs to choose between the two.
Or stop hyper-optimizing and keep it simple as is.

[wapiti]

Yes, it’s true. What I don’t like about the global 100 is that you overweight CH, only finpension allow to replicate a total world index without hedging

[dbu]

@wapiti

What I don’t like about the global 100 is that you overweight CH

Agreed there.

For now (without yet rebalancing vs. IBKR VEA/VWO) I have just personalized my VIAC strategy to consist of:

• 5% SMI
• 5% SPI Extra
• 15% EM
• 27% World ex-CH Hedged (to top up to min 40% CHF exposure, when we add 3% liquidity)
• 45% World ex-CH (max possible unhedged after the above; perhaps this one is unnecessary)

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My overall target “passive” ETF AA (maintained with VTI+VEA+VWO at IBKR) is:

• 55% US
• 5% CH (I “allow” a bit more than the FTSE here)
• 25% Dev xUS xCH
• 15% EM