Non-US portfolio with US ETFs

[indigo]

I am trying to understand how I should go about the equity portion of PP if its base currency is not the USD. Specifically, I am located in Switzerland, so one option is to look at European ETFs as per comments in this thread. Just for the sake of crossing all T/s and dotting all I/s, I'd like to understand if holding US Index ETFs and hedging them against CHF is a viable option. I still need to check if there are US Index ETFs denominated in CHF, but then if there are - would using them as a part of PP be fitting of PP's principles?

I have to apologize for (what might be) naive or strange questions - the finance matters are not my specialty, still working my way through a couple of books on the subject and warping my head accordingly.

[indigo]

Clive, thanks for the reply.

CHF got pegged to EUR, but (a) nobody knows how serious Swiss are and what happens if someone decides to test them (b) they are likely to re-peg it at a different level.

What I am looking at is to hedge not against CHF crashing (in my case), but rather to hold USD and hedge it crashing. Does this make sense or do I have it backwards?

[D]

If you hold US-based ETFs you are subject to their estate tax (which is I believe 60% on anything above $60K). I think anyone from a small country should stick to US PP. I'd keep my spending money in CHF (maybe 1 year of expenses), and the rest I'd invest in US PP. I'd open a US brokerage in order just to buy T-Bills and bonds directly (not subject to US estate tax if held directly as opposed to ETF such as TLT, and T-Bills must be longer than 6 months so stick to 1 year). Open a swiss brokerage such as swissquote.ch and buy CSSPX.SW (CS S&P 500, accumulating, with 0.15% expense ratio) and buy real gold coins and keep them in a swiss bank deposit box.

[stone]

Switzerland seems at first glance to be somewhere suitable for it's own Swiss PP. You have fairly diverse stocks (Nestle, Roche, UBS etc) and a world class currency. Isn't that all you need? Wouldn't a Swiss PP backtest show the Swiss PP to be less volatile in CHF terms than a US PP converted to CHF or a hybrid Swiss/US PP? The UK, German and Japanese PP all work extremely well in backtests. It is clearly better for a Japanese based person to have a Japanese PP than to have a US PP and convert it into Yen. That would have given them bad volatility in Yen terms.

[indigo]

Thank you for the replies, gents. All appreciated and noted.