The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Kilbim on June 04, 2016, 09:05:58 AM
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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.
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If you can buy Ishares and VTI, what about EFA?
https://www.ishares.com/us/products/239623/ishares-msci-eafe-etf
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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.
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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.
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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!
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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.
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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.