Author Topic: 3-fund portfolio and home country + general investment help  (Read 1256 times)

Kilbim

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Hi everybody.

Premise:
I am starting with my first investment. For various reasons I will able to invest only with something similar to betterment here in switzerland. One of the drawbacks is that I don't have access to the whole range or ETFs, but only to certains of them. One that's missing is a total international stock ETF.

Premise 2:
My idea was to build a 3-fund portfolio; I now have more options to invest in, and quite easily. I would like some feedback on if it's a good idea to invest in them or not. I am also not sure if I would need to integrate an ETF tracking stocks in my country (switzerland) or not.

Premise 3:
I am going to invest 8500 CHF, applying DCA, over a period of more or less 1 year or 1.5 (im still doing calculations). After that I plan to continue invest what I can (200/month more or less). I don't know how long I will be stay invested. Meaning, I want to stay invested for as long as possible, and I don't have any big expenses planned, I also have a (quite large) emergy fund (from which I might invest part of it), but you never know what might happend in 5 years and if you might need the money. So I am pretty conservative, and I assume I will need the mony in 5-7 years (but I am not really planning too). I plan to invest 60/40 stocks/bonds.

The general idea however is to select a portfolio and stay committed to it. So what I pick now I will keep. That's why I am interested in having your feedback.


Total Stock Market
I have access to VTI here, so not much to ask :)

Total International Stock Market
I don't have any acces to an ETF tracking that.
I can, however, combine:
  • - VPL   Vanguard FTSE Pacific Index Fund ETF Shares   
  • - VWO   Vanguard FTSE Emerging Markets Index Fund ET Shares   
  • STOXXIEX   iShares STOXX Europe 600 UCITS ETF (DE)
I adeedthe holdings of VPL, VWO and stoxx europe 600 and compared them with VXUS and well, they are similar, but obviously not the same.
I also don't have any other choice.. anything I need to pay attention to here?

Home based?
Should I also throw in some home-based ETF? I am in Switzerland and I could also buy some UBS ETF SMI CHF A. It would be the only ETF in my currency (CHF); it would have some overlapping with Stoox europe 600, but not too much. My worry is that it has Nestle=23.45 %, Novartis=18.98, Roche=17.53 %. This seems crazy, 3 companies having 60% of the whole portfolio? But I am tempted, any wrongdoing in having it in but weighted something like 5-10% of the international stock allocation?

REIT
I can also put in some REIT. Should I, for some diversification? 5% of REIT, divided 50/50 between Vanguard Global ex-US Real Estate ETF (VNQI) and Vanguard REIT ETF (VNQ)?
Or this is not worth it because it would only add more tax to do but no real benefit for such a small % (5%)?

Total Bond Market
I have access to Vanguard Total Bond Market ETF (BND).
Should I also throw in some home-based ETFs? Or maybe only them? They are in home-currency (CHF). But I am not sure what to choose and why.
Here are the choices:
  • iShares Swiss Domestic Government Bond 1-3 (CH)
  • iShares Swiss Domestic Government Bond 3-7 (CH)
  • iShares Swiss Domestic Government Bond 7+ (CH)
  • iShares CHF Corporate Bond (CH)   CH0226976816
I was thinking maybe 33/33/33 between vanguard total bond market / swiss domestic 3-7 year / swiss corporate bond.

I am diluting too much? Am I missing something? In general I am looking for your feedback, as I want to keep investing in this portfolio for as long as possible.
Thank you very much.
« Last Edit: June 04, 2016, 10:20:51 AM by Kilbim »

Heckler

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Re: 3-fund portfolio and home country + general investment help
« Reply #1 on: June 04, 2016, 09:27:05 AM »
If you can buy Ishares and VTI, what about EFA?

https://www.ishares.com/us/products/239623/ishares-msci-eafe-etf

Kilbim

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Re: 3-fund portfolio and home country + general investment help
« Reply #2 on: June 04, 2016, 09:29:23 AM »
Hei

As I said, unfortunately I don't have access to all ETFs. There are others that I haven't mentioned, but they are not useful (UK based, or sector based like vanguard financials ETF).
I don't have access to EFA, unfortunately.

forummm

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Re: 3-fund portfolio and home country + general investment help
« Reply #3 on: June 04, 2016, 02:41:19 PM »
What about all these Vanguard options traded in CHF?

https://www.vanguard.nl/documents/etf-product-range.pdf

If you can transfer money to EUR, USD, or GBP, you have even more Vanguard ETF options.

Kilbim

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Re: 3-fund portfolio and home country + general investment help
« Reply #4 on: June 04, 2016, 03:08:12 PM »
Again, I don't have access to them.

Please, give me feedback on what I wrote above.
It's going to be very useful for me!

Heckler

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Re: 3-fund portfolio and home country + general investment help
« Reply #5 on: June 04, 2016, 04:21:02 PM »
Yes, with only 8500, I definitely think you're diluting far too much.  That statement also really depends on your fees to purchase each of these funds. 
« Last Edit: June 04, 2016, 04:26:33 PM by Heckler »

Kilbim

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Re: 3-fund portfolio and home country + general investment help
« Reply #6 on: June 05, 2016, 01:45:45 AM »
Fees are 0.5% p.a., independent from how many times I buy. So 42,5 chf.
I calculated and it seems I can buy shares if I split in 12 months I am investing in every Etf am amount which is enough to buy the share at the current price plus some.