The moment you open a Säule 3a custody account (Depot) and face a dropdown menu of funds, you’re confronted with the quintessential Swiss dilemma: fidelity versus finance. The reflexive instinct for many investors is to embrace Heimatliebe, loading up on Swiss assets, naturally, Nestlé, Roche, and UBS are rock-solid pillars for retirement, right?
Hold on a minute.
A different, more calculated school of thought is gaining traction among savvy planners: deliberately excluding Switzerland from your 3a portfolio entirely. The logic is stark and intentionally provocative: your Pillar 2 (Pensionskasse) is already your Swiss hedge. It’s a heavily regulated, Swiss-centric savings vehicle that exposes you to the health of the Swiss economy and stock market, often alongside a salary paid in CHF and real estate that might be anchored here. Your Pillar 3a doesn’t need to do the same job.
This is about constructing a 3a portfolio not as an island, but as a strategic counterweight to your entire financial life in Switzerland.
The Core Conflict: Stability vs. True Diversification
First, let’s dismantle a warm, fuzzy, and expensive myth. Your Säule 3a isn’t a patriotic loyalty program.
A recent analysis of 209 Swiss Pillar 3a products by the University of Applied Sciences and Arts Northwestern Switzerland, covered by Cash, reinforced a brutal truth: “passive investment solutions” are consistently superior. Study leader Thomas Schudel’s advice is clear: “Anyone who wants to build wealth long-term in Pillar 3a should look very closely.” What they should see is that high-fee, actively managed funds, often pushed by traditional cantonal banks, routinely underperform their passive counterparts.
Yet, many default 3a investment solutions, even the passive ones baked into banks’ offerings, come with a hefty Swiss weighting. This is a classic case of “home bias”, a well-documented behavioral finance quirk where investors over-concentrate in their home market. For a Swiss resident, this isn’t just a psychological preference, it’s often a byproduct of the financial ecosystem and a misplaced sense of safety.
But here’s the counter-argument: safety doesn’t come from doubling down on a single, albeit stable, economy. It comes from true diversification. Imagine if your BVG/LPP is already 30-50% invested in Swiss assets (a common allocation). Layering another 20-30% Swiss exposure on top via your 3a means your total retirement wealth is dangerously correlated to one market. A prolonged Swiss slump? Your pension and your private savings take a synchronized hit. For a young investor in their 30s, as in the case study from our research, a 30+ year horizon demands growth, not just a safety blanket.
Deconstructing a Real-World 3a Portfolio
Let’s examine the strategy prompting this discussion. An investor in their 30s proposed a portfolio via Finpension, a leading low-cost provider for self-directed 3a accounts.
The proposed allocation was:
* 72% MSCI World Index Fund
* 19% MSCI World Sector Neutral Quality Index Fund
* 9% MSCI Emerging Markets IMI Index Fund
The stated goals were to balance risk, represent the world with emerging markets included, and, critically, exclude Swiss assets. The reasoning? “Pillar 2 is quite good to cover the home bias.”
The portfolio sparked immediate debate. Many experts argued the “Quality” ETF overlapped significantly with the standard MSCI World, adding complexity for minimal benefit. A common simplification suggested was a straightforward 90% MSCI World / 10% Emerging Markets split. The point wasn’t the precise funds, however, but the philosophy: this portfolio wasn’t just buying “the world.” It was consciously buying “the world minus Switzerland“.
How to Actually Build This Strategy (Hint: It’s Not With Your Bank)
This is where the Swiss financial landscape itself becomes part of the strategy. You cannot implement this in a classic bank 3a savings account. You need a modern 3a custody account (Freizügigkeitskonto für Säule 3a) from a specialized provider.
Platforms like Finpension, VIAC, or True Wealth have revolutionized this space. They are the “young wild ones” (die jungen Wilden) that according to Bilanz “clean up” in performance comparisons, leaving traditional banks and insurers in the dust. They do so by offering low-cost, transparent access to global index funds (ETFs) with minimal fees.
This is the practical enabler of a global, non-Swiss strategy. At a traditional bank, constructing a custom ETF portfolio might be prohibitively expensive or simply not offered. With these fintech platforms, you select your funds, set your allocation, and automate contributions, all for a fraction of the cost. The fee difference is not trivial, when a provider like GAM charges 0.27% for a bond fund but UBS charges 1.16% for a similar product, that gap compounds to thousands of francs on a six-figure 3a balance over decades.
The Toolbox: Choosing Your Weapons
So, you’re convinced. Your BVG covers Swiss exposure, and your 3a will be your global growth engine. How do you choose?
- The Core Global Equity Holding: A fund like the MSCI World or a broader FTSE All-World ETF captures large and mid-cap companies across 23 or 47 developed markets, respectively. This is your foundation.
- Adding Emerging Markets (EM): As our case study investor did, a 5-10% allocation to an MSCI Emerging Markets fund adds crucial exposure to growth economies outside the developed world. It’s historically more volatile but offers a different growth profile.
- The “Factor” Tilt (Optional): Funds targeting “Quality”, “Value”, or “Momentum” factors, like the MSCI World Quality used in the example, attempt to outperform by selecting stocks based on specific metrics. This is for the more advanced investor willing to accept tracking error (the risk of underperforming the plain index). As forum users pointed out, significant overlap with your core fund can dilute its effect, so choose with purpose.
- Bonds? Maybe Later: For a 30-year-old investor, the long runway typically justifies a 100% equity allocation within the 3a. As retirement nears, a gradual shift into bonds (global or Swiss Franc hedged) can reduce volatility.
A crucial consideration is the currency. While many global ETFs are denominated in USD or EUR, Swiss investors must be acutely aware of exchange rate fees and the long-term currency risk. Some providers offer CHF-hedged versions of global ETFs, which neutralize currency swings but come with a slightly higher cost. For a truly long-term investor, many accept the currency risk as part of the global diversification deal.
Execution: Navigating the Swiss Fintech Landscape
Your choice of platform will define your experience and costs. The beauty of the current Swiss market is that you have excellent, low-cost options to implement this strategy.
The Schwiizerfranke ETF savings plan comparison provides a stark overview. For a self-directed approach, platforms like Finpension offer the exact tools needed to build a custom portfolio like the one discussed. Robo-advisors like True Wealth or VIAC offer pre-built, globally diversified portfolios that inherently minimize Swiss bias, you can check their exact allocations. For pure ETF savings, providers like Saxo Bank or Swissquote also offer cost-effective routes, though they require more manual management.
The process is straightforward:
1. Open a 3a custody account with a chosen fintech provider.
2. Set up a standing order for your annual contributions (max. CHF 7,258 for employees).
3. Select your ETF(s), adhering to the approved list for 3a accounts.
4. Automate the purchases. Set it, and for the most part, forget it.
The annual tax deduction on your Steuererklärung is the sweetener, effectively giving your investments an immediate, government-backed boost.
The Final Verdict: Is Zero Swiss the Right Move?
Eliminating Switzerland from your 3a isn’t for everyone. It’s a strategic, intellectually deliberate choice that separates your savings from your geographic risk. It requires comfort with volatility and a firm belief in the long-term growth of global markets over any single nation’s.
For the young professional with decades until retirement and a robust Pillar 2, however, the argument is compelling. Why duplicate your single biggest country risk? Why pay higher fees for the privilege?
The research is clear: passive, low-cost global investing wins in the 3a arena. By using your 3a to access the entire world’s economic growth and letting your Pillar 2 handle the Swiss foundation, you’re not rejecting Switzerland. You’re just building a more rational, resilient, and ultimately Swiss-quality retirement plan.
