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It is important to me to build the earning power of the whole world into the portfolio. I therefore focus on indices that cover the whole world, such as FTSE All World or ACWI. Both also include the emerging markets. The US remains the locomotive of the global economy, with large weightings in many indices.
The global indices also include Swiss stocks, but only the large-cap ones such as Nestle, Roche, Novartis, UBS and Zurich play a role. I therefore include a Small Cap All World.
Investing in small and medium-sized companies can be worthwhile. They usually grow faster, but their share price performance is more volatile. A look at the SMIM shows that its performance has lagged behind the SMI over the past three years. Nevertheless, I would not want to miss small caps in my portfolio.
I follow a 1 ETF strategy (Vanguard FTSE ALL World). As I would like to reduce the currency risk somewhat, I have been looking for Swiss ETFs. However, I am not satisfied with SMI, SPI and SLI. I would most likely choose the SLI.
I think it's a real shame that there is no ETF on Swiss small caps. That would be the ideal solution for me.
In the end, I opted for the SPI Mid ETF (CH0130595124). I can live well with a TER of 0.25% and 80 mid cap companies.
I also think that MID cap companies are less exposed to currency risks because they are not yet so strongly positioned internationally and generate more of their sales in CHF.
Hello Daniel
A good alternative is Swisscanto's Index Fund: Swisscanto (CH) Index Equity Fund
Small & Mid Caps Switzerland if you want a bit of small cap Switzerland.
FA CHF ( Valor: 31562296 / 0.3 TER 180 positions)
Greetings
Thank you for the clear article.
I have no experience with ETFs so far (but with shares).
Hence two, probably somewhat naïve questions:
(1) The "TER 0.20" is the annual fees, i.e. 0.20% of the total volume?
(2) The dividends paid out by the shares included in the ETF shall not be
but are included in the price of the SPI (as you write),
i.a. do the ETFs mentioned not pay dividends?
Many thanks
Hello Ute,
these are good questions!
I hope to be able to answer them correctly as well 🙂
1) The TER (Total Expense Ratio) are annual fees and do not include all fees, e.g. transaction costs are missing from the TER. What is included: management and custodian bank fees, distribution costs, publication and audit costs, costs for other services such as auditing or legal advice.
2) A distinction must be made here between index and ETF. Many indices take dividends into account (performance index) and other indices neglect dividends (price index).
At best, however, you will find an ETF A that distributes dividends and an ETF B that reinvests them (this is called reinvestment).
I am a fan of accumulating ETFs, which are somehow in short supply with SMI, SPI and co. But I found what I was looking for and am currently invested there: UBS ETF (CH) SPI® ESG (CHF) A-acc / CH0590186661 / TER 0.15%
Now I have started another short research and came across this ETF: UBS ETF (CH) MSCI Switzerland IMI Socially Responsible (CHF) A-acc / CH0492935355 / TER 0.28% -> maximum weight of a company at 5%! That sounds like exactly what you were looking for. Also available as a distributing variant ( CH0368190739). What do you think of these ETFs?
Hello Sebi,
thank you for your research and the references incl. ISIN! 🙂
The "catch" here is the ESG inclusion. For example, CH0492935355 only lists particularly ESG-positive companies and therefore only contains around 60 stocks in total (i.e. around 150 companies are missing).
If sustainability is in the foreground, this is good. If risk diversification is in the foreground, this stands out negatively.
Nevertheless, a good hint and many thanks for the tip!
That's exactly what I've been looking for for years where not only the big 3 are so important.
In the end, it's the mix that counts. The portfolio then becomes more complex, of course, but there is currently no better alternative.
Maybe this post will help to motivate the fund providers a bit 🙂
My comment is more of a question: What are the compositions of the portfolios of the pillar 3a providers (such as frankly, finpension, ...) based exclusively on Swiss securities? Do they refer to a specific Swiss stock index or do they try to replicate something like a Swiss all-share index?
My son, who will be moving to Switzerland in the next few days, would like to invest part of his Pillar 3a in Swiss securities and is still looking for a suitable provider.
Hello Gerhard,
The providers mentioned above focus on Swiss equities, but also diversify internationally. Here you will often find a mix of SMI, SPI, MSCI World, emerging markets, bonds, real estate, commodities, etc.
Love!