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Old 18.07.2017, 23:37
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3rd Pillar: is Self-management possible?

I want to do a simple thing with my 3rd pillar - choose my favourite 4 fixed-income ETFs and rebalance yearly.
How can I do this?
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Old 19.07.2017, 00:03
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Re: 3rd Pillar: is Self-management possible?

Sounds very simple and would be in many countries.....Switzerland however (under the guise of protecting you) would rather you be extorted by the banks with high fees and low performance
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Old 19.07.2017, 00:31
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Re: 3rd Pillar: is Self-management possible?

Well there's vermoegenszentrum who allow you to choose your own ETFs from a very limited list. But it's pretty expensive. Noone else allows freely market tradeable securities AFAIK, only bank's own funds

Besides, all fixed income options for CHF suck. Zero yield (and trending up!) or fork out a fortune in hedging costs - apparently most of your 3a has to be in CHF or hedged for legal reasons or something. Hoard cash.
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Old 19.07.2017, 09:03
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Re: 3rd Pillar: is Self-management possible?

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Sounds very simple and would be in many countries.....Switzerland however (under the guise of protecting you) would rather you be extorted by the banks with high fees and low performance
It is really not about you! It is about ensuring you don't become a burden on the community in old age, by making sure that you have savings. Left to their own devices most investors will fail miserably, with all the self directed stuff in the US for instance, net worth (including pension assets) on retirement is still only about $109k. That is what we seek to avoid for society, not you personally.
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Old 19.07.2017, 13:31
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Re: 3rd Pillar: is Self-management possible?

You cannot directly manage your 3A fund. But you can choose which bank/insurance manage your 3A.
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Old 19.07.2017, 14:50
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Re: 3rd Pillar: is Self-management possible?

Not the right product for everyone but my life insurance clients who want to take the 3a performance into their own hands like Swiss Life Vitality Duo.
3a in an insurance company is only for someone who saves money for their pension = does not need/want to take the money out before they are 60.
If you need/want to take the money out before your pension then this is nothing for you.

But if you intend to work in Switzerland until you are 60, then this might be an interesting solution. You choose the funds you want to have your 3a money invested in. For selection there are funds from various providers such as Pictet, Swisscanto, Templeton, Threadneedle and of course Swiss Life. You can switch between the funds free of charge and play with the markets.

It always has a life insurance in it, which is great in particularly if you have family! However, which is not very fun if you want to take the money out before your pension age.

Now some will reply to this that keep your fingers off 3a policies in insurance companies. That is true if you have not understood the part of life insurance included into your 3a. In typical Swiss family (daddy working, mon at home with kids) a life insurance is highly important. And currently Vitality is our most popular product. My advice is: keep your fingers off if you need the money before you are 60 and otherwise have a look into it.
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Old 19.07.2017, 15:09
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Re: 3rd Pillar: is Self-management possible?

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Not the right product for everyone but my life insurance clients who want to take the 3a performance into their own hands like Swiss Life Vitality Duo.
3a in an insurance company is only for someone who saves money for their pension = does not need/want to take the money out before they are 60.
If you need/want to take the money out before your pension then this is nothing for you.

But if you intend to work in Switzerland until you are 60, then this might be an interesting solution. You choose the funds you want to have your 3a money invested in. For selection there are funds from various providers such as Pictet, Swisscanto, Templeton, Threadneedle and of course Swiss Life. You can switch between the funds free of charge and play with the markets.

It always has a life insurance in it, which is great in particularly if you have family! However, which is not very fun if you want to take the money out before your pension age.

Now some will reply to this that keep your fingers off 3a policies in insurance companies. That is true if you have not understood the part of life insurance included into your 3a. In typical Swiss family (daddy working, mon at home with kids) a life insurance is highly important. And currently Vitality is our most popular product. My advice is: keep your fingers off if you need the money before you are 60 and otherwise have a look into it.
The problem with such funds is the charges are huge, possibly the first 2 years of contributions. This makes the advisors rich & it will always be a bad investment. Buy cheaper stand alone life insurance if that what you need.
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Old 19.07.2017, 17:47
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Re: 3rd Pillar: is Self-management possible?

If you understand under a life insurance only the insurance for case of death then 3b standalone is cheaper. Though that is not very popular type of live insurance in Switzerland.

Most popular are combined ones that covers risk of getting unable to work (f.i. burnout) or death and taking that in 3b as standalone is much, much more expensive. If you die or get unable to work through accident, as employee you have an excellent insurance. But 90% of IV receivers are unable to work because of a sickness. That is just a statistical fact. If you die fast through sickness then your cheap standalone life insurance helps your family. But oh dear if you donít die but are sick, cannot work, then what?
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Old 19.07.2017, 17:48
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Re: 3rd Pillar: is Self-management possible?

I don't want to kidnap this tread to life insurance topic. My intention was to point out that there is a posibility to invest the 3a savings into funds and that is a very popular life insurance solutions from Swiss Life Vitality Duo.
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Old 19.07.2017, 17:54
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Re: 3rd Pillar: is Self-management possible?

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It is really not about you! It is about ensuring you don't become a burden on the community in old age, by making sure that you have savings. Left to their own devices most investors will fail miserably, with all the self directed stuff in the US for instance, net worth (including pension assets) on retirement is still only about $109k. That is what we seek to avoid for society, not you personally.
That may apply to 2nd pillar (or an easily identified means to plunder customer assets as is my opinion) but it makes none for 3a, which is on top of the mandatory parts already. The worst that can happen due to loss of 3a capital is a fallback to the default situation.
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Old 19.07.2017, 18:04
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Re: 3rd Pillar: is Self-management possible?

Start your own bank/fund. You get to invest in what you want and charge others a management fee for the privilege.
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Old 24.07.2017, 18:19
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Re: 3rd Pillar: is Self-management possible?

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Start your own bank/fund. You get to invest in what you want and charge others a management fee for the privilege.
That's a good point! I have a passive asset allocation strategy making 7% yearly with low volatility and more active (rebalancing once per 1-2 months) strategy making 10-11% yearly (commissions at IB level) with even smaller volatility.
I miss only a small thing - a seed investor!

Anyway, thank you all for replying
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Old 24.07.2017, 18:41
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Re: 3rd Pillar: is Self-management possible?

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That's a good point! I have a passive asset allocation strategy making 7% yearly with low volatility and more active (rebalancing once per 1-2 months) strategy making 10-11% yearly (commissions at IB level) with even smaller volatility.
I miss only a small thing - a seed investor!

Anyway, thank you all for replying
That does not sound very good performance & how many years have you received 11% compound?
As always I prefer www.fundsmith.co.uk
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Old 24.07.2017, 18:47
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Re: 3rd Pillar: is Self-management possible?

hehe, show me performance making yearly > 7% with Sharpe > 1.6 and max crisis DD<15% (and consuming my 0.25 working hours monthly)
I couldn't find anything like that in UBS/CS lists
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Old 24.07.2017, 18:51
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Re: 3rd Pillar: is Self-management possible?

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hehe, show me performance making yearly > 7% with Sharpe > 1.6 and max crisis DD<15% (and consuming my 0.25 working hours monthly)
I couldn't find anything like that in UBS/CS lists
You have not answered the question about your performance over any length of time.

Investing in fundsmith will get you a better return even taking the tax relief into account.
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Old 24.07.2017, 18:56
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Re: 3rd Pillar: is Self-management possible?

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You have not answered the question about your performance over any length of time.
I make my tests at least since 1994 - toughest year for FI, and the live performance is since 2014
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Y
Investing in fundsmith will get you a better return even taking the tax relief into account.
if not risk adjusted
Top TOP 10 HOLDINGS from their site:
Amadeus
CR Bard
Paypal
Microsoft
Stryker
IDEXX
Waters
Intercontinental Hotels
Pepsico
Philip Morris

Feel free to make your stress tests ))
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Old 24.07.2017, 18:58
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Re: 3rd Pillar: is Self-management possible?

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I have a passive asset allocation strategy making 7% yearly with low volatility and more active (rebalancing once per 1-2 months) strategy making 10-11% yearly (commissions at IB level) with even smaller volatility.
Whereas S&P's CAGR over past 8 years (2009-2016) has been almost 16% yearly

And how much of your low volatily is due to portfolio construction rather than general backgroubd of lack of volatilty in recent years?
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Old 24.07.2017, 19:04
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Re: 3rd Pillar: is Self-management possible?

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I make my tests at least since 1994 - toughest year for FI, and the live performance is since 2014

if not risk adjusted
Top TOP 10 HOLDINGS from their site:
Amadeus
CR Bard
Paypal
Microsoft
Stryker
IDEXX
Waters
Intercontinental Hotels
Pepsico
Philip Morris


Feel free to make your stress tests ))
Risk adjusted it''s lower then the S&P 500 or FTSE100, hardly surprising as the companies make profits entirely in cash, very liquid market cap ave 75 billion & average company is over 100 years old.
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Old 24.07.2017, 19:05
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Re: 3rd Pillar: is Self-management possible?

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Whereas S&P's CAGR over past 8 years (2009-2016) has been almost 16% yearly

And how much of your low volatily is due portfolio construction rather than due to general backdrop of lack of volatilty in recent years?
We are talking about Fixed Income instruments and simulations up to 1985.
SP500 is simply out of business here due to its huge volatility. S&P provides similar long-term returns with incomparable volatility
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Old 24.07.2017, 19:07
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Re: 3rd Pillar: is Self-management possible?

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Risk adjusted it''s lower then the S&P 500 or FTSE100, hardly surprising as the companies make profits entirely in cash, very liquid market cap ave 75 billion & average company is over 100 years old.
and the Sharpe ratios from long-term simulations (including every know crisis) are.... ?
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