Author Topic: Switzerland: How should I buy index funds here?  (Read 95715 times)

swisstash

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Switzerland: How should I buy index funds here?
« on: May 24, 2014, 02:52:47 AM »
I live in Switzerland and I would like to start making long term (10+ years) investments in index funds. I have some newbie questions about logistics!

First, how can I buy Vanguard funds? (vanguard.ch says to ask my bank, my bank says not available from them). Is there another Vanguard-like equivalent I should consider instead?

Second, what are the important tax differences between buying funds with a Pillar 3a account, an ordinary private account, or with my Holding company? (I'll probably do a little of each for reasons related to income tax.)

Finally, how can I buy the funds in such a way that they are "out of sight and out of mind" so that I am not tempted to play with them?

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #1 on: May 24, 2014, 04:36:14 AM »
Hi and welcome to the forum! Vanguard here is only available for institution, but they offer ETF (Equity Traded Funds) on the SIX. They have very low fee, but they are not always the better choice. In Switzerland things are different than in USA, mostly because we are not taxed in capital gain. We have a net-worth tax (ranging from 0.1 to 0.9 per mille of your total worth, depending from the canton).
So basically you can choose to buy cheap Vanguard ETF, but then you will receive every three months dividend in US dollar (which is in terrible shape at the moment vs the CHF). And you pay taxes on the dividend (and there is a 35% withholding tax that makes reinvesting alittle bit slower, since you receive your money back only after declaring it).

My strategy for the moment is the following:
- Pillar 3a invested in a passive Swisscanto fond with the maximum split in equity (45%, 55% in Bond). Fee of 0.60% (as low as it gets in Switzerland, impossible to find lower).

- Buying of ETF through an online Broker: Strateo offer a good deal with Comstage ETF (9 chf fee up to 200'000 chf) that have the advantage of NOT distributing dividend but always follow total return index that includes dividend distribution. In this case you spare yourself the hassle of declaring them and retrieve the withholding tax. They are usually pretty low fee ( for instance you can buy a S&P 500 for a fee of 0.18%). I've started build my portfolio with them.
I know Swissquote has some cheap ETF deal.

- Invest through Postfinance fonds: if you have a top account (gratis after 25'000 chf) you can subscribe to three passive fonds (yearly fee of 0.59%, subscription of only 0.5 %, no fee when selling) that are very interesting for a three fund portfolio: a bond fund, a Swiss performance stock fund and a global fund. You can automatize the subscription and dividend are automatically reinvested, although you still have to go through the hassle of decalring them and retrieve thewithholding tax. The nice thing is you can buy part of a share (i recently acquired 1.044 shares of a passive fund :) ), and the minimum investment is either 2000 chf for a one-time thing or 100 chf if you decide for an automatic investment plan.


I do a combination of all these three since I don't like to have all of my egg in the same basket.

I think if you have a postfinance account and you have up to 1000 chf to invest per month, subscribe a combination of the Postfinance suisse and postfinance bond and let everything go automatically. subscribing 1000 chf in a combination of two three funds at 0.5% subscription cost (5 chf total) could be much cheaper then trading ETF on the SIX.

We could use this thread to exchange idea :)

swisstash

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Re: Switzerland: How should I buy index funds here?
« Reply #2 on: May 24, 2014, 01:12:02 PM »
Hi and welcome to the forum!

Thanks! That is a lot of new and interesting information for me.

Vanguard still appeals to me the most for reasons of "keep it simple". Comstage, iShares, and others might be better but they seem more of an unknown quantity to me. Likewise smaller exchanges like SIX that seemed to have really awful liquidity for Vanguard ETFs (though I acknowledge could be because better alternatives exist around here). So at the moment I imagine my first investment will be to buy an Vanguard ETF in USD on a major exchange. Then I have to deal with currencies and taxes, but at least I'm safe from excessive fees and nefarious things like liquidity etc.

Pillar 3a also puts me on my guard. Is this financial institutions exploiting regulatory restrictions to sell crappy products i.e. trying to eat up tax savings with high fees? That might be the best alternative but perhaps it's worth looking for a better way?

My situation is unusual in that my income is mostly dividends from private companies that I have been involved in, and I plan to receive these dividends in a Holding company. So the money I want to invest will initially be in the Holding company and I will have to choose between drawing it out to invest privately or keeping it in the holding company and investing it there.

I am not sure about the pros and cons of private vs. holding company investments. Googling around now, it actually looks like the holding company would have the lowest taxes on dividends, and that they would become totally tax-fee if it would one day have a stake worth CHF 1M+ in some fund e.g. Vanguard S&P 500. That sounds like an unlimited/unrestricted alternative to Pillar 3a, which would be awesome :-). However: much more research needed and any relevant information would be most welcome.

Thanks again for the information and great to "meet" you!
« Last Edit: May 24, 2014, 01:13:55 PM by swisstash »

swisstash

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Re: Switzerland: How should I buy index funds here?
« Reply #3 on: May 26, 2014, 11:28:33 PM »
My strategy for the moment is the following:
- Pillar 3a invested in a passive Swisscanto fond with the maximum split in equity (45%, 55% in Bond). Fee of 0.60% (as low as it gets in Switzerland, impossible to find lower).
We could use this thread to exchange idea :)

Question for you: Are the tax savings of a 3a account enough to offset the higher fees?

Swisscanto 3a has 0.60% management fee and no dividend taxes. Vanguard funds would cost 0.09% + tax on dividends. If dividend yield is 2% and taxed at 15% then taxes are 0.30% for a total cost of 0.39%. This makes a Pillar 3a account seem very unattractive: the tax benefits are more than eaten up by the management fees and you would come out behind just buying funds in a regular account.

What do you think is the truth?

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #4 on: May 27, 2014, 08:51:14 AM »
also I'll start by saying I'm by no means an accountant and I started looking into this stuff only in the last months. But your reasoning has some flaws:

- You can deduct the whole contribution in the third pillar from the net income. That means that if you are in 25% bracket (between 30000 to 100000 chf of income in switzerland), if you contribute with 6000 chf, you pay 1500 chf less taxes. So you can decide what's better: investing 4500 in vanguard and pay 1500 chf in taxes (money you'll never get back), or put 6000 in Swisscanto funds.

- Another nice touch is that your third pillar is not subject to the net-worth tax (vermögensteuer). If you live in Tessin, you are not taxed up to 200'000 chf of net worth, so it is maybe nice to have your vanguard funds outside the third pillar account. If you live in fribourg, the net-worth tax starts from a patrimony of 35000 chf and is 0.25 %: as you can see, depending on the canton you live, this tax (that only applies on investment outside the third pillar) could already eat up the lower fee of a vanguard account.

-Third point: dividend are added to your income, so if you are in the 25% bracket, you are going to pay 25% of dividend tax, not 15%. As far as I know and my tax software says :)
so by our own reasoning 25% of 2% is 0.4%, plus 0.09% in makes Vanguard only 0.11% better then Swisscanto.
Since you can spare 1500 chf of taxes, you must have a total worth of 1'400'000 chf in vanguard funds (of which the 0.11% is effectively 1540 chf) to recover the difference. But so much net-worth will be taxed at 0.1-0.3 % annually depending where you live so at the end you really have no benefit in not-maximizing your third piller.

So mainly for these reasons is always better to contribute to the maximum to the third pillar. But I've seen that on https://www.vermoegenszentrum.ch/

that you can maybe create your own ETF portfolio to invest as third pillar. But I didn't look into it.


swisstash

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Re: Switzerland: How should I buy index funds here?
« Reply #5 on: May 27, 2014, 01:51:08 PM »
also I'll start by saying I'm by no means an accountant and I started looking into this stuff only in the last months. But your reasoning has some flaws:

True. The income tax deduction for Pillar 3a contributions was a big oversight on my part.

Here is my new attempt to state what options I have, as a self-employed person, to do with the part of my income that I want to invest:

  • Draw it as salary, pay income tax, buy Vanguard funds. Pro: Low fees on the funds. Con: Contributions taxed as income (high rate) and dividends taxed too (also high rate, though perhaps less than salary?).
  • Pay it into Pillar 3a (up to ~6800 CHF pear year). Pro: Contributions and dividends tax exempt. Con: High fees on the funds, likely exceeding tax savings on dividends.
  • Declare it as profit, pay it as a dividend into my holding company, and invest it there. Pro: Low taxes during growth (profits and dividends taxed between 0 - 12% in Obwalden). Con: Eventually drawing out the money will incur capital gains tax (on holding company) and dividend tax (on me receiving them).

I suspect that the last option will be best. I don't know how to really calculate these options out though.
« Last Edit: May 27, 2014, 03:18:49 PM by swisstash »

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #6 on: May 27, 2014, 11:18:27 PM »
The Vanguard ETF with 0.09% is the S&P 500 quoted on the SIX, right? You really should pay attention to the currency change. Receiving US dividend every three months makes it difficult to reinvest, since every transaction has brokerage fee. If you wait to have enough dollars to change and reinvest (so that the impact of the brokerage fee will be less) you have some money sitting months and not working for you on the market. Even if you immediately exchange dollar per chf to reinvest you'll lose 5-10% on currency conversion alone.

The overall performance of a fund is affected by currency swing: for example look at this iShares S&P500 chf hedged ETF (0.45% expenses):
https://www.justetf.com/ch-en/etf-profile.html?query=IE00B88DZ566&isin=IE00B88DZ566&from=search
Has an one year performance of 15.49%, everything included and with the currency hedged.
Look at the Vanguard one, without hedging:
https://www.justetf.com/ch-en/etf-profile.html?ic=Vanguard&isin=IE00B3XXRP09&from=search
Only 8.79%, you would have gained only HALF of the profit to spare 0.36% of fee.

Now in 2014 Vanguard seem a little bit better, but I would be very cautios because the iShares one is sparing you all the taxes declaration work, since they do it and is accumulating.

That's why I'm switching away from US and international exposure (right now only 50% of my stock allocation) and I'm focusing only on the SPI, the swiss performance index. The fund have low fees, dividend in franc and historically, since 1994, has an average annual return of 10.7%
http://www.msci.com/resources/factsheets/index_fact_sheet/msci-switzerland-index.pdf

Although as I said you have to decide for yourself :) and I really don't know anything about taxation of companies and holding so I can't help you with that.

swisstash

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Re: Switzerland: How should I buy index funds here?
« Reply #7 on: May 28, 2014, 06:30:28 AM »
The Vanguard ETF with 0.09% is the S&P 500 quoted on the SIX, right? You really should pay attention to the currency change. Receiving US dividend every three months makes it difficult to reinvest, since every transaction has brokerage fee.

I imagine receiving dividends into a USD account and then buying more shares every quarter (on NYSE perhaps?). The transaction costs should be CHF 36 100 per fund per year (four transactions @ CHF ~25 per transaction with Swissquote). This seems likely to be dramatically less total fees than the European funds with higher expense ratios. Similarly, declaring the dividends myself will probably cost me CHF 100 in extra Treuhand fees each year, but that is a low cost.

The overall performance of a fund is affected by currency swing

Is currency hedging valuable for long term holdings? I mean: can it be shown to increase expected returns or reduce volatility? (Or is it a gimmick used by bankers to sell more expensive funds?) I would love to read (say) a Boglehead analysis on this. The nearest I found on a quick Google is this: http://www.efficientfrontier.com/ef/799/hedging.htm.

It is not obvious to me that you can compare the one-year performance of hedged vs. unhedged funds and extrapolate to long term returns. Than sounds similar to comparing the one-year returns of gold vs. equities to decide which is better for the future.
« Last Edit: May 28, 2014, 08:38:59 AM by swisstash »

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #8 on: May 28, 2014, 09:43:03 AM »
dividends into a USD account and then buying more shares every quarter (on NYSE perhaps?). The transaction costs should be CHF 36 100 per fund per year (four transactions @ CHF ~25 per transaction with Swissquote). This seems likely to be dramatically less total fees than the European funds with higher expense ratios. Similarly, declaring the dividends myself will probably cost me CHF 100 in extra Treuhand fees each year, but that is a low cost.

Well 9 francs were only for ETF on the SIX, but I see you corrected it ;) . Still, did you included the Federal stamp duty of 0.15%?This applies on stock on the NYSE too. And probably there is some double taxation to avoid somewhere.
Other then that , didn't Swissquote make you pay 0.025% chf the safe custody (minimum 15 chf quarterly, up to 50 chf quarterly)?  So you have to add this 60-200 bucks on the mix. For the moment only postfinance trading and CornerTrader do not make you pay the safe custody of your stocks.

Is currency hedging valuable for long term holdings? I mean: can it be shown to increase expected returns or reduce volatility? (Or is it a gimmick used by bankers to sell more expensive funds?) I would love to read (say) a Boglehead analysis on this. The nearest I found on a quick Google is this: http://www.efficientfrontier.com/ef/799/hedging.htm.

It is not obvious to me that you can compare the one-year performance of hedged vs. unhedged funds and extrapolate to long term returns. Than sounds similar to comparing the one-year returns of gold vs. equities to decide which is better for the future.

I'm still looking into it, for now I've only found some article on 10x10.ch (page 9):
http://www.10x10.ch/wp-content/uploads/2014/05/10x10_0413_d.pdf

swisstash

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Re: Switzerland: How should I buy index funds here?
« Reply #9 on: May 28, 2014, 11:35:20 PM »
Great to discuss this! I find that my thoughts become much more concrete this way :-).

I take your point that there are a lot of different fees to keep track of.

Regarding currency hedges, I wonder what financial instrument the funds use for hedging? (and how much would it cost to buy a hedge separately from the investment?)

I feel like through discussions I am developing a personal investment strategy:

  • Keep it simple and do as the Bogleheads do.
  • Optimize taxes. Spend money at the beginning on getting a tax-efficient structure in place (holding company).
  • Optimize expense ratio. Avoid fees that will grow with the stash. Prefer low fees instead of convenience and non-Boglehead-approved benefits.
  • Aim to track a major index. (Don't try to beat it.)

I am partly sensitive to the expense ratio from playing with FIRECALC's feature to investigate the effect of fees on funds over long time frames e.g. the 60 years that I still plan to live :-).

I have to work out my asset allocation next, and whether to buy individual index funds (like S&P500) or funds-of-funds (like Target Retirement).

swisstash

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Re: Switzerland: How should I buy index funds here?
« Reply #10 on: June 02, 2014, 12:55:30 AM »
This is harder than I expected!

I am now googling around for funds that are:
- Low fees, ideally < 0.30%.
- Support a 60/40 or "age in bonds" asset allocation that is globally diversified.
- No "gotchas" on withholding taxes.
- Easy to reinvest dividends (ideally automatic).
- ETF with liquidity (low big/ask spread)

The nearest I have found is Vanguard's "LifeStrategy™ 60% Equity Fund - Accumulation (GBP)" but it is not (yet) available as an ETF. I might contact Vanguard UK and see if they accept clients in Switzerland.

The best ETF option I have found is a DIY asset allocation based Vanguard's Ireland-domiciled FTSE funds. The big/ask spread is too high to buy them on the SIX but seems to be more reasonable on LSE or Euronext. They don't seem to have problems with withholding taxes. (My tax rate will be about 12.5% here and I am not sure I could ever recovery the US's 30% withholding tax.)

I have been looking for more index fund ETFs to consider. I am looking for low fees, global diversification, high liquidity on both stocks and bonds. Do you have any tips?

swisstash

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Re: Switzerland: How should I buy index funds here?
« Reply #11 on: June 02, 2014, 08:47:13 PM »
Timing! Today iShares cut the cost of the funds that I am interested in by around 50%. http://www.fundweb.co.uk/news-and-analysis/passives/ishares-cuts-etf-fees-as-part-of-core-series-launch/2010802.article

Their accumulating world equity ETF (iShares MSCI World UCITS ETF (Acc)) looks like exactly what I want for equities in one fund, now that the cost dropped from 0.4% to 0.2%.

Looking for a low-cost well diversified accumulating bonds fund now...

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #12 on: June 04, 2014, 11:32:25 PM »
Hi
thanks for reporting it, I was seeing the S6P 500 at 0.07% and I was like confused, since I always thought was around 0.15%. Now I know why :D

In the moment I'm still concerning myself with currency hedging. I've found these interesting charts on the MSCI website:

MSCI USA 100% hedged to chf:
http://www.msci.com/resources/factsheets/index_fact_sheet/msci-usa-100-hedged-to-chf-index-net.pdf

EMU (Euro):
http://www.msci.com/resources/factsheets/index_fact_sheet/msci-emu-hedged-to-chf-index.pdf

UK:
http://www.msci.com/resources/factsheets/index_fact_sheet/msci-uk-100-hedged-to-chf-index-net.pdf

Canada:
http://www.msci.com/resources/factsheets/index_fact_sheet/msci-canada-100-hedged-to-chf-index-net.pdf

Australia:
http://www.msci.com/resources/factsheets/index_fact_sheet/msci-australia-100-hedged-to-chf-index-net.pdf

Japan:
http://www.msci.com/resources/factsheets/index_fact_sheet/msci-japan-100-hedged-to-chf-index-net.pdf

All these charts shows only growth (no dividend), but they compare buying an index using Local currency, using the CHF unhedged (buying at the current currency rate at the SIX) or buying  investing with hedging.

Now for Australia and Canada hedging was not so decisive, but the 10 year return difference for the other countries are really different, without hedging your investment could have suffered huge drawback.

Point is, this is all good if the CHF is appraising compared to the other currencies, because the hedging works in your favor. In a reverse situation, it is obviously bad. I personally think that for now the chf is going to remain a strong currency. If I see an inversion of tendency, I will switch from iShares MSCI world chf hedged
to a non-hedged ETF.

I'm also thinking to dropping the iShares World CHF hedged ETF (with a ter of 0.55%) and build my own world chf-hedged index by using the UBS hedged ETF, that has the MSCI USA chf hedged @ 0.30%, the MSCI EMU chf-hedged at 0.33% (same for UK chf hedged) and Japan at 0.40%.

In this way I could lower my espenses from 0.55% to ~of 0.31% by making something like this (all ETFs from UBS, all accumulating, all chf-hedged):

55% MSCI USA @0.30%
8% Japan @ 0.45%
8% UK @0.33%
19% EMU @0.33%
10% MSCI Switzerland 30/20 @ 0.20% or similar indexes

avg expenses: 0.31 instead of 0.55%, without Australia and Canada. But it would be cool if in the fututre they'll drop 0.2 from the world chf-hedged index too...

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #13 on: June 11, 2014, 10:14:09 PM »
So after some researching it seems that currency hedge is very good for short term investment only, while investor with long time horizon (20-30 year) can pretty much forget about it and invest directly in local currency.

And about good ETF: I've just found out that although the KIID were outdated, UBS offer 2 incredibly sexy ETF with incredibly low TER:

MSCI Euro Mon Union@ 0.02% (!!!), fund currency in Euro
https://www.justetf.com/ch/etf-profile.html?isin=IE00B5B1MZ58&h=2&groupField=none&sortField=ter&sortOrder=asc&from=search&assetClass=class-equity
and
S&P500 @ 0.05% fund currency USD
https://www.justetf.com/ch/etf-profile.html?isin=IE00B4JY5R22&h=2&groupField=none&sortField=ter&sortOrder=asc&from=search&assetClass=class-equity


So I'm leaning towards changing my World chf-hedged single account in a 60% S&P + 40% EMU so not to have all my investment tied up in only one nation with one currency. Maybe it will even be 50/50 and a staggering total of 0.035% of TER.

Stashing Swiss-style

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Re: Switzerland: How should I buy index funds here?
« Reply #14 on: June 13, 2014, 05:32:14 AM »
I'm so excited to read your posts !  I've been searching for this kind of information everywhere.  I plan to invest CHF5K this summer and then a monthly amount of CHF1k.  I was looking at Vanguard too (what MMM follower doesn't!) but couldn't work out how to do it.  I work for an international organisation so don't pay income tax (sounds great, and I'm not complaining but that means no deductions off taxes and hence a different perspective for investment considerations -35% withholding tax applies of course, as does wealth tax etc).

Looking forward to more discussions with Swiss 'stachers !

swisstash

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Re: Switzerland: How should I buy index funds here?
« Reply #15 on: June 14, 2014, 11:51:40 AM »
Great that there is another one of us :-) welcome!

tensile

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Re: Switzerland: How should I buy index funds here?
« Reply #16 on: June 17, 2014, 04:20:25 PM »
Hoi zame! This thread is exactly what I was looking for. Great stuff.

I have a Swissquote account and lazily assumed I would use that to get ETFs. I have some shares in there so the fees are sort of lessened by that (if I understand it correctly). I mean, if I'm already paying 15 francs a quarter on fees to have the shares, then it's not like I have to think of safe custody fees as a decisive factor. Am I right? Also there's an upper limit so when I've got billions in ETFs 50 francs a quarter is nothing.

But the second point is much more important and it became obvious thanks to Grog.

- Buying of ETF through an online Broker: Strateo offer a good deal with Comstage ETF (9 chf fee up to 200'000 chf) that have the advantage of NOT distributing dividend but always follow total return index that includes dividend distribution. In this case you spare yourself the hassle of declaring them and retrieve the withholding tax.

The stupid withholding tax! If we're trying to compound things and it takes ages to get the money back (I don't even know how to do it) it defeats the point somewhat.
So that Strateo idea looks like a good option. Are there any more ETFs that do a similar 'included dividend' thing?

I'm British so my other choice is to do the whole thing from the UK. To be honest I've been researching this for two days and keep hitting brick walls and dead ends. I can't work out what's cheapest and easiest... All help appreciated!
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Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #17 on: June 17, 2014, 11:50:41 PM »
Hi tensile, hi Stashing Swiss-style, welcome to the forum!

It is true that information is difficult to retrieve in Switzerland, nobody really cares for DIY finance and prefere to leave 1+% on the table to manager and stuff.

After a couple of weeks my perspective is adjusting, but is always shifting around. Things change. Here are my observation for now:
- Strateo online platform is terrible, truly awful and they don't offer the two UBS fund @0.02% and @0.05% TER. When I asked about it, they just told me that those two are not coming to strateo. As of yesterday I empited my account on it and I will close it in the next weeks. Trully awful online experience, the etf finder was horrible.

- I opened an account with Swissquote, just to test it out. They have the two cheap UBS fund and for only 9.85 chf pro trade (just as for almost all other ETF)! The fact is, they charge you 0.1% yearly (0.025% every quarter). True, there is a maximum of 200 chf per year, but you will need 200k to start diminishing the interest percentage and this is going to take me at least 4 year.
On the other hand, postfinance E-Trading has no account or safety deposit fee, but transactions start from 25 chf.
In the end, you always pay. It depends on how complex your portfolio is. If you have an one-etf portfolio (for instance with the iShares MSCI world @ 0.2%) then go for Postfinance e-trading. If you have 6-7 ETFs, use swissquote and pay the 0.1%.

Those two are the best options out there for ETF portfolios, AFAIK.

Take my example: I want to invest in 100% equity. The best and simplest solution is the iShares MSCI world at 0.2%. But the fund is in USD, one single currency. For me it is too much of a risk so I 've broken it down like this:

- 25% on US equity in US dollars (UBS S&P500 @0.05% TER)
- 25% on Europe equity (EMU) in Euro (UBS MSCI EMU @0.02%)
- 25% in Swiss equity in CHF (UBS MSCI CH 35/20 @0.2%)
- 25% in Emerging Markets equity in US dollars. (UBS MSCI EM @0.4%)

All this ETF are accumulating, so there are no delay in reinvesting with the withholding tax. The average TER is 0.13%, and the portfolio is slightly tilted towards Emerging Markets (the true proportion would be 85% developed World, 15% Emerging Markets). For the moment I'm sacrificing Japan, UK, Australia and Canada for the sake of a lower TER. What I really like is that if I have a true emergency I can withdraw by choosing the best currency at the best rate: if you are tied up in a one fund based on one currency and at the moment of need you have to sell at an horrible exchange rate, you are locking in losses.

Now I have only to decide how I want to invest in this portfolio. With swissquote, I could buy them in a more equilibrated and continous manner, but I'll have the infamous safe custody deposit fee. With postfinance I'll probably buy irregularly, but with less yearly expenses. I'll have to run some simulation :D

swisstash

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Re: Switzerland: How should I buy index funds here?
« Reply #18 on: June 18, 2014, 12:05:17 AM »
Funds domiciled in Ireland (Vanguard UK) or Luxembourg (iShares) don't seem subject to withholding taxes. The range is smaller than with US-domiciled funds but for equities I am tempted by either Vanguard's "FTSE All-World UCITS ETF" (0.25% TER) or iShares "MSCI World UCITS ETF (Acc)" (0.20% TER). I lean towards the trusted Vanguard brand but the iShares looks a little better on paper.

These funds seem to have good liquidity on the London Stock Exchange (buy in pounds) and Euronext (buy in euros) but not on the Swiss stock exchange (buy in CHF).

I am targeting a 60/40 equities/bonds portfolio. Still looking for a suitable internationally-diversified bonds fund for that. Tips welcome!

tensile

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Re: Switzerland: How should I buy index funds here?
« Reply #19 on: June 18, 2014, 03:28:05 AM »
This thread keeps getting better! Thanks everyone.

@Grog - when I was wandering around Swissquote, I couldn't find the TER info anywhere. Do I have to go to external sites and look up each and every one I'm interested in? Also, how do you know which are accumulating?

@swisstash - that's very interesting about the Irish domicile - that would solve one of my problems. How do we find out for sure?
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Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #20 on: June 18, 2014, 05:05:12 AM »
there are a couple of veeery useful website:

for ETF:
www.justetf.com
there is just about everything, you can personalize your search and find out wich one is cumulating/distributing dividend, where is the domicile and the TER.
Other than that, it has some nice review and ocmparison between ETF tracking the same index and a review of all the transaction costs for ETF in swiss online broker!
https://www.justetf.com/ch/online-broker-vergleich/etfs-kaufen.html

Useful article on ETF investing:
www.10x10.ch

All the fund and ETF, very useful for your third pillar 3a investment :
www.swissfunddata.ch

tensile

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Re: Switzerland: How should I buy index funds here?
« Reply #21 on: June 21, 2014, 08:02:57 AM »
I've taken some baby steps into the world of ETFs. I used Swissquote after Grog's bad experience with Strateo.
Note that the CHF 9 offer is only for Swiss-based funds! The ones I wanted cost a bit more - like 12 euros or 12 francs to buy.

I'm reading through the MMM blogs from start to finish and just got up to REITs. I remember hearing about them from Prof Shilling on a Yale course through Coursera.
They seem like something I'd be very interested in but I'm having problems getting info on the Swiss equivalent because my German is ... ah... nicht.

It seems the Swiss equivalents are called KGKs. Could you guys point me in the direction of a couple of REIT-style index funds I could look into?
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swisstash

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Re: Switzerland: How should I buy index funds here?
« Reply #22 on: July 02, 2014, 01:27:12 PM »
Celebration! I have taken the first step and become an investor (and a boglehead).

Here is the path I have taken:
  • Asset allocation: Age-5 in bonds (rebalance annual with 5% threshold)
  • Equities: VWRL (TER 0.25) Vanguard FTSE All-World UCITS ETF
  • Bonds: IEAG (TER 0.25) iShares Euro Aggregate Bond UCITS ETF
I used Swissquote to buy on the Euronext exchange.

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Re: Switzerland: How should I buy index funds here?
« Reply #23 on: July 04, 2014, 02:07:44 PM »
Have you guys read Think and Grow Rich? I find it a bit annoying but I can't disagree with the main concepts. One of them is the 'master mind' group - you should surround yourself with like-minded people so you can feed off each other and whatever.

I thought maybe the Swiss-based mustachians could try to get together and have a casual chat about saving and investing in the challenging world that is Helvetia! What do you think? (I live in Zurich.)
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nassoro

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Re: Switzerland: How should I buy index funds here?
« Reply #24 on: July 07, 2014, 09:02:12 AM »
Celebration! I have taken the first step and become an investor (and a boglehead).


Out of curiousity, did any of that end up in 3rd Pillar? Having finally just done my US and Swiss taxes a few weeks ago, I'm ready to try to reduce them where I can.  I'm inclined to  fund the 3rd pillar via Swisscanto, as its one of the few options open to me - mostly equities in indexes, is the plan.  Now I just I have to I get myself to the bank during bankers hours (I should also brush up on my banking French before then :) )

Stashing Swiss-style

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Re: Switzerland: How should I buy index funds here?
« Reply #25 on: July 07, 2014, 09:13:46 AM »
........I started a reply but it seems to have disappeared into the ether.  Apologies if I end up repeating myself. 

First, it's a great idea for Swiss MMMers to meet up, but I'm in Vaud so not so easy (or cheap :-)).  Second, until I actually get my Swissquote account activated and start investing, I'd not feel worthy to contribute to a conversation about investment strategy.  I'm not shy about contributing to conversations of any other sort, especially over a nice glass of Swiss white wine !  I'd be keen to start a thread on this forum about ideas for saving money in this crazily expensive country.  When I read about MMM's budget (and others on this forum), I'm skeptical that FI is even a possibility here.  I spend an average of CHF2,500 in supermarkets (food, wine, cleaning products etc) per month (feeding 6 people, but still....) - I think that's close to what MMM spends per month on everything !!

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Re: Switzerland: How should I buy index funds here?
« Reply #26 on: July 07, 2014, 09:15:00 AM »
To clarify - CHF2,500 on average per month at the supermarket.

swisstash

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Re: Switzerland: How should I buy index funds here?
« Reply #27 on: July 08, 2014, 01:27:48 AM »
Quote
Out of curiousity, did any of that end up in 3rd Pillar?

No. Pillar 3a would add complexity and the tax savings seem to be offset by the higher fees of the 3a funds, at least compared with corporate taxes (~15% on dividends and gains) which is what I expect to pay as a self-employed person who invests via my company. I would probably use Pillar 3a if I were an employee and expected to save more on income tax or if Pillar 3a offered index funds with lower expenses (like Vanguard).

I am a newbie but to me the Pillar 3a regulations seem to be protecting overpriced financial products from competition and that smells bad to me.
« Last Edit: July 08, 2014, 01:42:35 AM by swisstash »

swisstash

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Re: Switzerland: How should I buy index funds here?
« Reply #28 on: July 08, 2014, 01:28:41 AM »
I'd be keen to start a thread on this forum about ideas for saving money in this crazily expensive country.

You should post this to the Ask a Mustachian forum!

I would be interested in a meet up some day but not at the moment.

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #29 on: July 08, 2014, 01:32:53 AM »
That's a lot of money, but I guess for 6 person is not too bad. Could be worse.
I'm around maybe 300 chf for me and my gf for groceries. We practically don't eat any meat, we don't buy processed food and buy wine only through LeShop.ch when it has 40-50% reduction, we stash and it lasts for 1 year at least.

About third pillar: I'm still researching around, for the moment the two cheapest are:
Bank coop: (since this 1. July they offer the Swisscanto index 45 retrozessionfrei @0.35% TER + 0.5% deposit for a total of 0.85%)
Postfinance Pension 45 @ 0.88% TER

I still have to find a way to access the retrozessionsfrei Swisscanto products going through a cheaper bank than Bank Coop.

Vermögenszentrum allows you to build your own portfolio of ETFs for your third pillar but it still takes 0.68% as custody fee, to which you have to add the 0.20-0.4% of the few ETF they offer, so it is mostly more expensive.

Regarding a meeting: I will say right ahead that I'm really not a big fan of meeting and face-to-face discussion, it is just my character and I prefer the anonimity of the forum. But maybe in the future I will change my mind.

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #30 on: July 08, 2014, 01:38:59 AM »
I forgot 2 things:

1) great idea about the post on the "Ask A mustachian" section: I would love to talk about frugality in the most expensive country of the world!


2) Third pillar: depending of the canton, you are taxed at around 0.1-0.4% of your total net worth in taxable account/swissquote and so on.
So I'm maxing out my third pillar because starting from 50'000 chf of total worth I'll have to pay around 0.3% of net worth taxes, so the capital "hidden" in the third pillar at 0.85% (thus not paying the NW taxes) in reality has a TER of ~0.5%, which is high but not terrible, and I can deduct from income reducing my taxes of 1600 chf annually.

swisstash

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Re: Switzerland: How should I buy index funds here?
« Reply #31 on: July 08, 2014, 01:53:47 AM »
frugality in the most expensive country of the world

Great name for the topic! The whole forum would probably be interested to follow that discussion :-)

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #32 on: July 08, 2014, 02:00:33 AM »
Ok I'm starting it :D

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Re: Switzerland: How should I buy index funds here?
« Reply #33 on: July 09, 2014, 04:43:10 AM »
Go for it Grog !  I'll be contributing, and probably getting a few face punches along the way.

Svarto

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Re: Switzerland: How should I buy index funds here?
« Reply #34 on: July 13, 2014, 02:57:02 AM »
Hi everyone, I just signed up seeing this thread, really great advice! Also a Swiss resident who is just getting introduced to MMM.

I am in PostFinance at the moment, I see mention of the Swissquote, looked into their pricing structure but couldnt find out if they also have to pay federal stamp duty (as investments through PostFinance forces you to do)?

I crunched some numbers comparing PostFinance with SwissQuote, see attached graph. In summary, PostFinance is cheaper than SwissQuote when:
1) For 20k assets, you do one trade per year
2) For 80k assets, you do less than 3-4 trades per year
3) For 150k assets, you do less than 9-10 trades per year
4) For 200k assets, you do less than 12-13 trades per year

Do anyone know if you pay the transaction fee both when buying the fund as well as when you sell? So basically, each enter & exit costs 2x the transaction fee?


« Last Edit: July 13, 2014, 03:46:34 AM by Svarto »

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #35 on: July 16, 2014, 06:02:19 AM »
Do anyone know if you pay the transaction fee both when buying the fund as well as when you sell? So basically, each enter & exit costs 2x the transaction fee?

Hi, welcome to the forum. Yes the transaction fee are identical both ways.
Don't forget that you can move securities (if I'm not mistaken it costs 50chf) from Swissquote to Postfinance.   
From post to swissquote it costs much more: 100 chf ffor swiss securities, 150 chf for international ones.

Swissquote costs you from 60 to 200 chf per year of deposit, postfinance is free bus has more transaction costs.

0-60'000 chf: 60 chf /y custody fee
60'000-200'000 chf: 60-200 chf /fee
200'000 -> : capped @ 200 chf /y

so you could buy it via swissquote, and when you reach 110'000 chf (110 chf per year) you could pay 50 chf to transfer a 50'000 worth position from swissquote to postfinance, and reducing thus your expense at swissquote to 60 chf for 60'000 chf.

you could to the same if you have to invest a large sum (100'000 chf+)

Astromarine

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Re: Switzerland: How should I buy index funds here?
« Reply #36 on: July 22, 2014, 02:08:48 AM »
Hi guys, just saying hi as another mustachian living in this place. Thanks for the discussion so far, it's been really really helpful. As someone who's made so many mistakes with his money for so long, reading about people doing it right is invaluable :)

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Re: Switzerland: How should I buy index funds here?
« Reply #37 on: July 22, 2014, 02:30:34 AM »
Astro, I just read your 'anti-mustachian' post - You're in a great position to get financial freedom. How's it going?
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Astromarine

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Re: Switzerland: How should I buy index funds here?
« Reply #38 on: July 31, 2014, 06:22:10 AM »
It's... going. A buuunch of years of bad habits are hard to break, and we took a hell of an income loss when the baby was born. Both me and the wife went to 80% time, and we needed a babysitter for the extra 3 days, so that wasn't cheap.

I'm working on my investments currently, trying to allocate stuff to where it might make sense. I created a swissquote account, and bought some stuff there that I liked (also the low TER funds that Grog mentioned. Thanks!) I got to my current age knowing almost nothing about money and investment, so I'm having to make up for lost time.

I dunno. I think the only chance I have to FIRE is to make some super radical changes to my lifestyle. One option is to go back to Portugal to retire, as costs of living there are ridiculously low. But even then, it's gonna take me years. Price of a misspent life, I guess.

Astromarine

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Re: Switzerland: How should I buy index funds here?
« Reply #39 on: August 07, 2014, 02:52:27 AM »
A question for you guys. I currently have my pillar 3 (A and B)  in UBS, on a couple of asset allocation funds. I got these way before I found this site and started getting interested in investing at all. My question is, anyone know if there are huge differences in fees and costs etc between different providers of pillar 3 accounts? Should I get my money out of UBS in general? if so, put it where?

Cheers

samuck

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Re: Switzerland: How should I buy index funds here?
« Reply #40 on: August 10, 2014, 09:16:44 AM »
A question for you guys. I currently have my pillar 3 (A and B)  in UBS, on a couple of asset allocation funds. I got these way before I found this site and started getting interested in investing at all. My question is, anyone know if there are huge differences in fees and costs etc between different providers of pillar 3 accounts? Should I get my money out of UBS in general? if so, put it where?

Cheers

Hi Astro, comparis can help you find the best deal, however, only for pillars 3a with fixed interest rate: http://en.comparis.ch/banken/vorsorge/default.aspx
Your bank should provide you the Total Exchange Ratio (TER) of your funds. I'm using Postfinance Pension 45 with a TER of 0.88 (which is high for ETFs but ok in comparison to other pillar 3a funds).

Astromarine

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Re: Switzerland: How should I buy index funds here?
« Reply #41 on: August 10, 2014, 04:48:04 PM »
ha hahahahaha HAHAHA oh man I suck so much

So, this UBS retirement fund.

TER: 1.53%

someone hold me, I think I'm going to cry.

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #42 on: August 11, 2014, 12:33:14 AM »
The three best options I've found so far:

1) Swisscanto BVG-45 R, a passive index fund ("retrozessionsfrei") with maximum equity (45%) with a TER of 0.35%. It's easily accesible through Bank Coop that requires an annual deposit fee of 0.5%. Total cost: 0.85% yearly.
2) Postfinance Pension 45, already mentioned: TER of 0.88%, identical stock/bond composition as the one above.
3) Build your own ETF portfolio through Vermögenszentrum: the annual deposit fee is 0.6%, plus ETF TER. The very limited choice of ETF (all around 0.3 % TER) make it around 0.85-0.90%.

For the moment I inveest in number one, since I don't like some of the conditions of the ETF-based third pillar account of VZ.

It's useful to remember that if you plan to use this mone only in your sixty, could be best to have 5 different accounts (usually 4 different third pillar, one second pillar) so that instead of taking out 500'000 chf all in one at 65, you can take them out 5 times 100'000 from 60 to 65. In this way you'll end probably paying less taxes, depending on the canton and how you reinvest this money. I remind you all that if you are always obliged to withdraw money fully from one account, you cannot withdraw only 50% of your total stash. The only way to retire only parts of your wealth is to have multiple accounts, and fully empty each one in different years.

The same is true if you retire early and withdraw your third pillar money to pay a mortgage/start your own business, since taxes percentage increase with the amount of money withdrawn, and you can keep stashed away from wealth taxes part of your pension.

Having multiple third pillar account over different banks is anyway more safe against bankruptcy, although in Switzerland banks are almost state-guaranteed (see UBS)

Astromarine

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Re: Switzerland: How should I buy index funds here?
« Reply #43 on: August 11, 2014, 01:22:55 AM »
yeah, that's my main question: as things currently stand, my plan is to FIRE in the next few years and move back to Portugal. So in any case I'll take the pillar 3a all at once soon. I'm mostly using it to save a bit on taxes right now, and invest that cash. But considering it's such short term (for now) is it worth it to even move it out of UBS into something else?

Of course, plans can change, and if they do I'd rather have something, since you can't pay for past years. I think? You guys that know more about this stuff, I'd love a couple ideas what I should do in my case. Maybe it makes sense to just stop paying, and invest that cash elsewhere. I dunno.

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #44 on: August 11, 2014, 05:48:57 AM »
yeah, that's my main question: as things currently stand, my plan is to FIRE in the next few years and move back to Portugal. So in any case I'll take the pillar 3a all at once soon. I'm mostly using it to save a bit on taxes right now, and invest that cash. But considering it's such short term (for now) is it worth it to even move it out of UBS into something else?

Of course, plans can change, and if they do I'd rather have something, since you can't pay for past years. I think? You guys that know more about this stuff, I'd love a couple ideas what I should do in my case. Maybe it makes sense to just stop paying, and invest that cash elsewhere. I dunno.


I never changed third pillar provider; but as far as I know, is not complicated at all. A couple of letter some waiting for the transfer in the nev custody account and voilà.

Let's compare your UBS with the Postfinance Pension 45. You absolutely don't know which one will do better in the next future, when you (hipotethically) plan to cash out. Past performance are NOT a predicter.

Now, let's say that you have 150'000 chf in your third pillar and you are paying 0.88% annually. That's 1320 chf.

Now with 1.53%: 2295 chf.

That's 1000 chf per year that will always grow together with your stache: the bigger the stache, the higher the costs in absolut CHF.

Let's say changing your third pillar will require 10 hour between writing a letter, telling your wife, making phone calls etc. And it will save you 2000 chf for the next 2 years, when you will be cashing out. That's a 200 chf/hour rate, I don't know if you make more but for me is a lot of money.


All in all, please consider that if you need that money in 2-3 years, and you want to be sure to have it, please consider a less aggressive investment plan (like the postfinance25) or even to cash out and move everything to a normal third pillar account with a fix 1.4% and no expenses.
You should be in stock only if you have a very long time-horizon, 15+ years. If you are counting on this money to retire in 3 years and purchase something (an house in Portugal, or I don't know) to start your life as retiree in my opinion you shouldn't be in stock.
If you are going to just cash out this money and reinvest it in a taxable account, maintaining yor asset allocation, then is different, leave everything in stocks and bonds.
But if you plan to use it, and you count on this money to be at disposition to be spent, I suggest a more prudent approach: this passive third pillar accounts have usually 45% of equity, divided in 20% swiss stocks and 25 % in MSCI world stocks. If the market crash in 3 years, and goes -50%, you'll found yourself with a third pillar stache that is only 75% of what you have now.


Astromarine

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Re: Switzerland: How should I buy index funds here?
« Reply #45 on: August 11, 2014, 06:24:33 AM »
thanks for the help. Yeah, the plan I've been discussing with the wife is to move to Portugal in a 1-4 years max. Once we do, we'll transfer all our current market positions to a Portuguese broker (we might do that sooner, actually. Fees there are *ridiculously* lower than here, even in Swissquote). So for my main investments I don't mind being a bit risky.

As for the pillar 3a, both me and the wife have around 60k in our 3a custody accounts, currently all in 'UBS Vitainvest' funds. How are management fees calculated? Checking my ebanking statement, I don't see any expenses deductions. Is it on the dividend payout? The gross and net price and of fund shares are the same, and when I buy the fund I don't pay any commission or fees.

Looking at my situation now, it seems like the dividend payout is around 0.6%, and the market price has appreciated about 11.3%. What this actually means I have no idea. It's already a great personal victory that I know enough to *find* this stuff and ask decent questions, actually interpreting the data is so far still beyond me.


Also, unrelated: I also got roped in a while ago to get a pillar 3b account for me and the wife, and between both of us we have about 80k in it. Am I correct in that this is basically a shitty version of a custody account with severe fund limits, and therefore I should cash it out and invest it elsewhere now that I know how to?

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #46 on: August 11, 2014, 06:51:58 AM »
thanks for the help. Yeah, the plan I've been discussing with the wife is to move to Portugal in a 1-4 years max. Once we do, we'll transfer all our current market positions to a Portuguese broker (we might do that sooner, actually. Fees there are *ridiculously* lower than here, even in Swissquote). So for my main investments I don't mind being a bit risky.

As for the pillar 3a, both me and the wife have around 60k in our 3a custody accounts, currently all in 'UBS Vitainvest' funds. How are management fees calculated? Checking my ebanking statement, I don't see any expenses deductions. Is it on the dividend payout? The gross and net price and of fund shares are the same, and when I buy the fund I don't pay any commission or fees.

Looking at my situation now, it seems like the dividend payout is around 0.6%, and the market price has appreciated about 11.3%. What this actually means I have no idea. It's already a great personal victory that I know enough to *find* this stuff and ask decent questions, actually interpreting the data is so far still beyond me.

The fund takes out 0.xyz % everyday to pay for the expenses, and in your case in total they reach 1.53% per year. Simple as that. For a very, very rough estimation you could say that if there are 250 working days where the fund can actually be bought and sold, the fund manager take out 1.53%/250 = 0.006% everyday from the fund. As for today, in your case, 0.006% * 60'000 chf = 3.7 chf per day.
You never see this expense in your normal statement, if you really want to see absolute numbers you have to go read the annual, semi-annual and quartal prospectus.
But in the end what matters is that all that you see is the net variation and net gain/loss after expenses.

Also, unrelated: I also got roped in a while ago to get a pillar 3b account for me and the wife, and between both of us we have about 80k in it. Am I correct in that this is basically a shitty version of a custody account with severe fund limits, and therefore I should cash it out and invest it elsewhere now that I know how to?

Yep couldn't have said it better myself. ETF all the way.

Astromarine

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Re: Switzerland: How should I buy index funds here?
« Reply #47 on: August 11, 2014, 07:20:07 AM »
thanks again for the help. I guess I'm lucky that even though I *could* have put my money in a better place, at least I was smart enough to start putting it in *some* fund a few years ago, and lucky enough that I started just as the fund was starting to recover from 2008.

Now for the best problem in the world. Turns out I have about 80-100k that I need to figure out where to invest. So far it's been play money, but this is the real deal, and I'm getting spooked :D

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #48 on: August 12, 2014, 01:43:08 AM »
Start from here:
http://www.bogleheads.org/wiki/EU_investing

The principles apply very well to Switzerland. I think the optimal ETF for swiss investors has following characteristics:

- For tax reason: Accumulating (dividend reinvested automatically by the fund), not distributing. ETF based in Switzerland (that only have 0.075% of swiss stamp tax for stock transaction, instead of 0.15% for ETF based elsewhere) are only distributing. From the link above:
The problem with distributing ETFs is that you may have to pay dividend tax in your home country, then when you reinvest the dividends you must pay brokerage commissions, and also the bid/ask spread. These problems don't exist in capitalizing/accumulating ETFs.

- Preferably quoted on the Swiss Exchange, to keep it simple tax-wise and because of lower transaction fee (usuallly).

- Best if not synthetic ETF but a full replicated/optimized sampling one. Still, I consider everything put out from UBS quite safe since our state seems willing to back our big banks up and a bankrupt seems quite a remote possibility.

-Lowest TER as possible

-The bigger the fund (moneywise) the better.

- Avoid ETF based on UK becase of the british stamp duty (ISIN starting with GB...)

For the moment I only buy stocks ETF. A good ETF for the Switzerland stocks is:
https://www.justetf.com/ch-en/etf-profile.html?isin=LU0977261329&h=2&groupField=none&sortField=ter&sortOrder=asc&from=search&country=CH&assetClass=class-equity&distributionPolicy=distributionPolicy-accumulating

It is the largest,accumulating fund out there, full replication. Automatic reinvesting and no dividends. Lowest TER with 0.20% (among the accumulating ones).

The problem I see with Swiss-only investing is that 3 companies (Nestlé, Roche & Novartis) Represents 50% of the total swiss stocks market. That's dangerous. Another alternative is to buy the MSCI Europe index, that includes the largest EMU, Swiss, UK and nordic companies. The two best are:
iShares in EUR
https://www.justetf.com/ch-en/etf-profile.html?region=Europe&groupField=none&sortField=ter&sortOrder=asc&distributionPolicy=distributionPolicy-accumulating&assetClass=class-equity&isin=IE00B4K48X80&from=search

or

db x-tracker in USD:
https://www.justetf.com/ch-en/etf-profile.html?region=Europe&groupField=none&sortField=ter&sortOrder=asc&distributionPolicy=distributionPolicy-accumulating&assetClass=class-equity&isin=LU0274209237&from=search

in both of them Switzerland is represented around ~13.4% (same size of Germany :D) and with a TER of~0.30%

You could build your own "Europe" portfolio at a lower TER. For EMU contries the choice is quite clear with a TER of 0.02%, but beware that is a synthetic ETF although form UBS:
https://www.justetf.com/ch-en/etf-profile.html?isin=IE00B5B1MZ58&h=2&region=Europe&groupField=none&sortField=ter&sortOrder=asc&from=search&distributionPolicy=distributionPolicy-accumulating&assetClass=class-equity

and for the UK, full replication @0.10 % TER:
https://www.justetf.com/ch-en/etf-profile.html?isin=IE00B53HP851&h=2&groupField=none&sortField=ter&sortOrder=asc&from=search&distributionPolicy=distributionPolicy-accumulating&assetClass=class-equity&country=GB


For the USA you have a choice between one synthetic fund @0.05% from UBS:
https://www.justetf.com/ch-en/etf-profile.html?isin=IE00B4JY5R22&h=2&index=S%252526P%252B500%2525C2%2525AE&groupField=none&sortField=ter&sortOrder=asc&from=search&distributionPolicy=distributionPolicy-accumulating&assetClass=class-equity

or a full replicated one at 0.07% from iShares. They lowered their TER this July so at the moment I think this is a very good choice for the US, since is a much bigger fund and is full replicated for only 0.02% more:
https://www.justetf.com/ch-en/etf-profile.html?isin=IE00B5BMR087&h=2&index=S%252526P%252B500%2525C2%2525AE&groupField=none&sortField=ter&sortOrder=asc&from=search&distributionPolicy=distributionPolicy-accumulating&assetClass=class-equity

Investors from Switzerland, what strategy do you use? what ETF do you buy? How is your portfolio? How do you solve the concentration problem of Roche/Novartis/Nestlé? And currency? Do you prefer EUR since the exchange is somewhat fixed (can't go lower then 1.20)?


Astromarine

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Re: Switzerland: How should I buy index funds here?
« Reply #49 on: August 13, 2014, 01:51:02 AM »
I really can't thank you enough for your help. If you're willing, a couple questions:

1) why are you so in favor of replicating rather than synthetic? The site I read with some definitions seemed more ambivalent about them, not a clear winner.

2) What about something like Zurich shares, and their 6.5% dividend? You think it has any place in a portfolio?