Tax Advantage Portfolio Increase

In my Saving % post, I describe the different saving scheme we have in Switzerland and I mentioned about the 3rd pillar which is tax advantage saving account. Thanks to SNB to stop supporting the Swiss franc, I jump in the opportunity to buy shares of 2 funds that our bank managed and decided to transfer the full amount for 2015 (6875 CHF) and not our standard monthly investment. By doing that, I really hope to maximize our return in 2015.

Since the 15 of January, the famous date when the SNB decided to stop supporting the CHF, the 2 funds reduced their value by around 4%.

1) ¨ UBS (CH) Vitainvest – 50 Swiss ¨: 737 parts @ 127.48 CHF

The fund focus mainly in the Swiss market with a maximum amount of 46% (long-term) of high quality Stock (main position: Novartis, Nestle, Roche, UBS and Richmont), the rest is composed of bonds and real estate.

2) ¨ UBS (CH) Vitainvest – 25 World ¨: 35 parts @ 323.54 CHF

The fund has a maximum amount of 25% (long-term) of high quality Stock (main position: Novartis, Nestle, Roche, Microsoft and Apple), the rest is composed of bonds and money instruments.

Now our Tax Free Portfolio has a total value of: 105’184 CHF.

So I consider that we made a good move in buying after this DROP with an upside of 4200 CHF and more. The expected dividend for both fund should be around 500 CHF.

Now let’s wait end of February to refill our investment cash account as it’s the month of the annual bonus. Let’s hope that our company will be generous.

Have a good weekend.

Cheers

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3 thoughts on “Tax Advantage Portfolio Increase

  1. Hi! Just a quick comment on your funds: you may be happy with their results, but I would avoid it because of 2 factors:
    – very high Expense (~1.35 % of MER! That is insane. You are filling the pocket of UBS managers).
    – Active Management, which is almost never a good thing. PAssive index has been shown to beat active manager on the long horizon (10+years) and cost only a fraction of actively managed funds.

    The best 3rd pillar fund in Switzerland is this one:
    http://products.swisscanto.com/infoservice/de/retail/fundDetails/overview.navMenu-L2luZm9zZXJ2aWNlL2RlL3JldGFpbC9zYWV1bGUzYS90YWdlc2t1cnNl.fundid-1115.html

    Passive index investing, maximum stocks (45%), half of it in the SMI and half of it in MSCI World index. A total TER of 0.35%.
    The only problem is that often this kind of fund are not in an account with free custody, but you can find it in banks with a 0.5% custody account that brings the whole costs to 0.85%, 0.5% less then the UBS Funds. And without the manager risk.

    This is just my personal opinion: passive low cost investing beat everything else.

    Like

  2. Dear No-Way,

    Thank you for your insight and investment idea on the 3rd pillar. I would need to reflect a little bit more on it to evaluate if it meet our idea of investment. As you have seen I like active investment so at the moment it is the one that give the most of it to achieve our retirement in 10 years. Once achieved, I agree that Passive investment is probably more efficient.

    Cheers

    Like

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