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  #21  
Old 11.09.2020, 09:29
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Re: New to Switzerland and investing - help needed!

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And do make sure your expectations remain realistic. 7-9-10% return in USD, or 6-8% in CHF, will grow into a very nice sum over time. Btw, these two rates of return are likely to be roughly equivalent as the CHF is likely to keep appreciating against the USD.
This is IMO very optimistic, I would be more conservative with expectations (maybe even half of that); if we are talking about broad US/global indices/ETFs.
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Old 11.09.2020, 10:19
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Re: New to Switzerland and investing - help needed!

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Smithson is an interesting fund for sure and has its niche. But FEF is a large cap dinosaur whose performance is mostly explained by its tech/growth tilt. If large tech/growth companies is your thing, you'd do better buying QQQ (0.20%) or MGK (0.07% TER) than rushing to pay 1% of your assets to Mr. Smith. FWIW FEF underperformed QQQ by a *lot* in recent years.



Mutual funds are not exchange traded, that's what makes it so hard. It's all down to which mutual funds your broker has business relationship with. There's no central party involved (an exchange) through which both brokers and mutual funds can make deals with each other, unlike for stocks and ETFs.
FSE Nov 2010: 1.00
Today - 5.27
(X5.27)

MGK Nov 2010: 45.26
Today: 182.62
(X4.00) - about 4.8 adjusting for strengthening of USD

Added to that that MGK is super tech heavy, so of my holdings I would perhaps compare it to SMT rather than FSE. FSE is definitely more conservative. Maybe Bailie Gifford American would be even better (but I don't own that)

Here are MGKs top 10:
Apple Inc.
Microsoft Corp.
Amazon.com Inc.
Alphabet Inc.
Facebook Inc.
Visa Inc.
Home Depot Inc.
Mastercard Inc.
NVIDIA Corp.

Only 3 of FS top 10 are tech.

SMT Nov 2010: 133.9
Today: 922.04
(X6.89)

QQQ is a little over x6 in this period in gdp. It's directly comparable to my PCT pure tech holding.

PCT Nov 2010: 266.3
Today: 2080.98
(X7.82)

QQQ with FSE is comparing apples with pears.

At the end of the day pretty much by definition a good active fund will best it's corresponding ETF. Nevertheless both those ETFs have undeniably been fantastic investments over the last few years.

Green blob to anyone who can find the Sortino Ratio for each of these funds.

Last edited by HickvonFrick; 11.09.2020 at 11:04.
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  #23  
Old 11.09.2020, 10:30
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Re: New to Switzerland and investing - help needed!

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This is IMO very optimistic, I would be more conservative with expectations (maybe even half of that); if we are talking about broad US/global indices/ETFs.
SP500 average annual return is 10-11%. I've presumed 8% growth on my retirement models.

Last edited by HickvonFrick; 11.09.2020 at 11:05.
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  #24  
Old 11.09.2020, 11:01
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Re: New to Switzerland and investing - help needed!

Fundsmith underperformed MGK 1.11.2010 till now. Maybe you're forgetting divs in your calculations.

MGK adjusted price from yahoo converted to GBP:

1.11.2010: 37.30 / 1.5556 = 23.97 GBP
now: 182.62 / 1.2791 = 142.77 GBP
Total return: 5.95x in GBP

Fundsmith TR for same period from the chart on their homepage: 5.26x in GBP

And this underperformance has only worsened in recent years - FEF's got too big. Put your large cap money into passive and keep Mr Smith's 1% stockpicking fee.
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Old 11.09.2020, 11:14
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Re: New to Switzerland and investing - help needed!

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Fundsmith underperformed MGK 1.11.2010 till now. Maybe you're forgetting divs in your calculations.

MGK adjusted price from yahoo converted to GBP:

1.11.2010: 37.30 / 1.5556 = 23.97 GBP
now: 182.62 / 1.2791 = 142.77 GBP
Total return: 5.95x in GBP

Fundsmith TR for same period from the chart on their homepage: 5.26x in GBP

And this underperformance has only worsened in recent years - FEF's got too big. Put your large cap money into passive and keep Mr Smith's 1% stockpicking fee.
Ok yes I did forget divs . Guilty as charged. I still think it's apples and pears to a certain extent though looking at what they actually hold. I have more in SMT than FSE which has outperformed both.

I think it's fair to say that both of our strategies have been wise investments. Compared to the "roboadvisor" the OP is suggesting, who will probably tell him to invest in Swiss stocks and bonds or something ghastly like that. In which case we would probably be talking about +80% or 100%, not 500%, 600% or 700%.

Last edited by HickvonFrick; 11.09.2020 at 11:50.
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  #26  
Old 11.09.2020, 15:02
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Re: New to Switzerland and investing - help needed!

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I think it's fair to say that both of our strategies have been wise investments. Compared to the "roboadvisor" the OP is suggesting, who will probably tell him to invest in Swiss stocks and bonds or something ghastly like that. In which case we would probably be talking about +80% or 100%, not 500%, 600% or 700%.
just remember trees don't grow to the sky.

These instruments will fall comparably to their rise at one point. Luckily Mr Smith has started his venture after 2009, so we'll see which one is better in 5 to 10 years from now.
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Old 19.09.2020, 15:49
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Re: New to Switzerland and investing - help needed!

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SP500 average annual return is 10-11%. I've presumed 8% growth on my retirement models.
It depends. Very long term and after inflation, SP500 total return is more like 7%. In today's low-inflation environment that's 8-9-10%, as you write. But CPI keeps falling, so inflation-less numbers may be more realistic going forward.

At least measured CPI keeps falling, which isn't necessarily the same as the inflation experienced by John Doe and Jane Que due to the "adjustments" in CPI measurement, mostly introduced 20-30 years ago. Those interested in the topic may want to use shadowstats (.com but also Wiki et al) as an entry point - warning, maths ahead.
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  #28  
Old 19.09.2020, 18:20
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Re: New to Switzerland and investing - help needed!

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just remember trees don't grow to the sky.

These instruments will fall comparably to their rise at one point. Luckily Mr Smith has started his venture after 2009, so we'll see which one is better in 5 to 10 years from now.
He ran the Tullet Prebon pension fund from 2002, in the same manner as Fundsmith so you can see his performance through the 2008 financial meltdown. I did the calculations a few months ago & the compound return was between 16-17% over 17.5 years so very respectable. I will do the calculation again when Fundsmith has it's 10th birthday. When he started Fundsmith back testing 40 years gave 16% compound, so he is in that ballpark.
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  #29  
Old 19.09.2020, 21:52
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Re: New to Switzerland and investing - help needed!

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He ran the Tullet Prebon pension fund from 2002, in the same manner as Fundsmith so you can see his performance through the 2008 financial meltdown. I did the calculations a few months ago & the compound return was between 16-17% over 17.5 years so very respectable. I will do the calculation again when Fundsmith has it's 10th birthday. When he started Fundsmith back testing 40 years gave 16% compound, so he is in that ballpark.
I wish he would come to Switzerland and run some of our pension funds!
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Old 20.09.2020, 14:11
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Re: New to Switzerland and investing - help needed!

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I wish he would come to Switzerland and run some of our pension funds!
If you take the insurance part into account and the transfers to the pensioners that are caused by their oversized pension amounts, and the regulations they have to meet, which you should to get a fair assessment, they aren't doing that poorly.
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Old 21.09.2020, 12:11
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Re: New to Switzerland and investing - help needed!

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SP500 average annual return is 10-11%.
Yes, and?
A) is that inflation adjusted?
B) that's over a period of past 90 years; there might be some reasons (a few hints off the top of head: high valuations, low interest rates, low inflation) that will most probably not be the case looking forward

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I've presumed 8% growth on my retirement models.
Good luck with that (sincerely).
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Old 21.09.2020, 12:28
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Re: New to Switzerland and investing - help needed!

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Yes, and?
A) is that inflation adjusted?
B) that's over a period of past 90 years; there might be some reasons (a few hints off the top of head: high valuations, low interest rates, low inflation) that will most probably not be the case looking forward


Good luck with that (sincerely).
Fair comments! My model has me being able to retire in my 40s - so I have a lot of slack!
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Old 21.09.2020, 12:43
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Re: New to Switzerland and investing - help needed!

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FSE Nov 2010: 1.00
Green blob to anyone who can find the Sortino Ratio for each of these funds.
take a look at the fundsmith annual meeting on youtube. they publish the sortino ratio along with ones from comparable funds.
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Old 20.11.2020, 14:19
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Re: New to Switzerland and investing - help needed!

ETFs is a good choice for investing in passive fund, and yield good returns. That is, of course, if you pick the popular one that track major indices such as SPY, VEA, QQQ. Be careful with ETFs that have high expense ratios because they will cut into your returns (read the prospectus of each one you are planning to invest). If you want to put your money in an emerging market, avoid EEMV. I once bought it and had to sell at breakeven point a year later because of bad performance.
SPY has a 12.91% compound annual return in the last 10 years. That is very decent but it might not translate to future performance given this is the longest bull run in the history of the SP 500
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Old 20.11.2020, 15:52
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Re: New to Switzerland and investing - help needed!

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SPY has a 12.91% compound annual return in the last 10 years. That is very decent but it might not translate to future performance given this is the longest bull run in the history of the SP 500
I don't understand why people keep talking about "the longest bull run in history".
The current bull market is just a few months old. Unless you ignore what happened last February, when the S&P 500 crashed 30% or so in just a few weeks, or the market downturn at the end of 2018

https://www.statista.com/statistics/...x-performance/
https://en.wikipedia.org/wiki/2020_stock_market_crash
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