Author Topic: Switzerland: How should I buy index funds here?  (Read 98440 times)

Stashing Swiss-style

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Re: Switzerland: How should I buy index funds here?
« Reply #200 on: May 03, 2016, 02:38:48 AM »
Grog - your feedback is really useful and I do very much appreciate you taking the time to explain so clearly how to navigate the Swiss investing system for people like Kilbim and myself who are just taking the first baby steps and who don't have a lot of money of invest.  Truewealth looks like it will work for me and, as you say, "the important thing is to invest".  Wise words.

ace07

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Re: Switzerland: How should I buy index funds here?
« Reply #201 on: May 04, 2016, 12:38:04 PM »
Hi Everyone

I am someone who moved to Switzerland, managed to save 100K CHF and is just about to make the first investment.

I am planning to buy SPDR S&P Dividend ETF for about 60-80K CHF.

I cannot choose at which bank I buy my ETFs as I am limited to one specific bank.

I found two ETFs:

SPDR S&P US Dividend Aristocrats ETF in CHF
Isin: IE00B6YX5D40
symbol: USDV
Ongoing charge: 0,35%

SPDR S&P Dividend ETF in USD
Isin: US78464A7634
symbol: SDY
Ongoing charge: 0 (Can this be true?)

So which one shall I buy? I do not necessarily plan to stay in Switzerland longer than 10 years. To be honest I am a bit afraid of investing in USD as CHF is a much more stable currency. So which ETF would you guys recommend for me? Or maybe I should buy something else?

Thanks in advance for your help.

samuck

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Re: Switzerland: How should I buy index funds here?
« Reply #202 on: May 05, 2016, 01:21:28 PM »
Hi ace07, I don't think it matters because you have a currency risk in any case when you earn CHF and invest in a S&P fund. Got nothing to do with CHF being more stable than other currencies or not. With your plans of leaving Switzerland eventually, however, I think it would make more sense to buy the USD one, assuming it would be easier to transfer it to abroad.

As a remark: Are you sure about investing such a large share of your cash in one ETF with a dividend focus? I started my investments with a dividend-focussed ETF, but was soon quite disappointed with its performance compared to the standard ETF, with bought the entire market and not just the dividend stars. Plus, in Switzerland, dividends are taxed, while capital gains are not. Give it some thought...

samuck

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Re: Switzerland: How should I buy index funds here?
« Reply #203 on: May 09, 2016, 02:06:14 PM »
FYI Swiss mustachians, Postfinance just informed it's launching a 3rd pillar index funds with 75% equities! Highest equity share in the market! It should be available as of mid-June. And here is the bad news: TER of 0.94% :-(
I was invested in the 45% 3rd pillar (TER of 0.88%), so I'll move that share to the new one once available. Good idea?

Check it out: https://www.postfinance.ch/en/priv/prod/bcase/fund/pension75.html

Expatriate

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Re: Switzerland: How should I buy index funds here?
« Reply #204 on: May 10, 2016, 12:43:09 AM »
FYI Swiss mustachians, Postfinance just informed it's launching a 3rd pillar index funds with 75% equities! Highest equity share in the market! It should be available as of mid-June. And here is the bad news: TER of 0.94% :-(
I was invested in the 45% 3rd pillar (TER of 0.88%), so I'll move that share to the new one once available. Good idea?

Check it out: https://www.postfinance.ch/en/priv/prod/bcase/fund/pension75.html

Thanks for sharing! I'll definitely do the same. A shame the TER is so high but that's the reality in 10-years-backward Switzerland. The alternative is letting go of much higher (potential) tax gains.

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #205 on: May 10, 2016, 01:23:41 AM »
FYI Swiss mustachians, Postfinance just informed it's launching a 3rd pillar index funds with 75% equities! Highest equity share in the market! It should be available as of mid-June. And here is the bad news: TER of 0.94% :-(
I was invested in the 45% 3rd pillar (TER of 0.88%), so I'll move that share to the new one once available. Good idea?

Check it out: https://www.postfinance.ch/en/priv/prod/bcase/fund/pension75.html

Thanks! Is nice to see things moving around and new products coming on the market. I hope Swisscanto will react and propose a index 75 bvg fund ;)

My general advice is to take everything globally, that is calculate his own allocation (equities/bonds) through all of your investment vehicle before deciding if it is a good idea. In general though switching from 45% equities to 75% for only 0.06 pa is a good deal considering our limited option in the pillar 3a.


EDIT: woah they screwed up big time with that PDF, am I the only one not seeing any color for the equities components? And in some plot half the percentage are wrong. Tsck poor quality review
« Last Edit: May 10, 2016, 01:26:50 AM by Grog »

Kilbim

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Re: Switzerland: How should I buy index funds here?
« Reply #206 on: May 11, 2016, 03:15:59 PM »
Isn't it a huge risk investing in 75% equities for your 3a pillar?

samuck

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Re: Switzerland: How should I buy index funds here?
« Reply #207 on: May 11, 2016, 10:38:09 PM »
Isn't it a huge risk investing in 75% equities for your 3a pillar?

More volatile, yes, but more risky, no.
And at the end of the day / working life, the return will be much higher than with the cash version. Investing the 3a pillar in equities is actually a no-brainer, as it's the perfect example of regular long-term investing: you invest on a monthly or yearly base over decades.
To reduce volatility, you can combine cash and equity 3a pillars, and you could also reduce the share of equity toward retirement.

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #208 on: May 12, 2016, 01:37:38 AM »
Isn't it a huge risk investing in 75% equities for your 3a pillar?

it always dépends on timeframe. If you are 55 (5 years before withdrawal) or if you want to cash out to buy a home in 3 years then yes, is very risky to go with th 75%, because the higher volatility could mean that when you need the money in 3 years the fund has lower values.
But if you are 25 and don't plan to touch it for 20 years then it's the way to go.

Kilbim

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Re: Switzerland: How should I buy index funds here?
« Reply #209 on: May 12, 2016, 07:19:04 AM »
I am 28, I am still very worried about doing something like that.
Or even taking any risk with my 3a pillar. Given the current (and future) status of AHV, I will probably much need my pillar 3a to have a somewhat decent pension... so if for some reason it would ever go down when I need it, I would be pretty much screwed..
Do you have any resources that prove that having a pillar 3a with some equities in it is not a huge risk? (for me huge risk is also something with very very small chances of happening, but with devastating consequences for me; for example losing my pillar 3a).
For now I have the bank pillar 3a which pays the most (0.075%).
Thanks

Kilbim

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Re: Switzerland: How should I buy index funds here?
« Reply #210 on: May 12, 2016, 09:57:03 AM »
Does investing in your 3a pillar (maxing it) before investing in other ways (read: actual investing in stocks, bonds, etc.) is the case also for switzerland?
From reading around it is for the USA and a lot of countries, but I wonder if it's needed here.
Also, do you have an emergency fund?

samuck

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Re: Switzerland: How should I buy index funds here?
« Reply #211 on: May 12, 2016, 02:29:12 PM »
I am 28, I am still very worried about doing something like that.
Or even taking any risk with my 3a pillar. Given the current (and future) status of AHV, I will probably much need my pillar 3a to have a somewhat decent pension... so if for some reason it would ever go down when I need it, I would be pretty much screwed..
Do you have any resources that prove that having a pillar 3a with some equities in it is not a huge risk? (for me huge risk is also something with very very small chances of happening, but with devastating consequences for me; for example losing my pillar 3a).
For now I have the bank pillar 3a which pays the most (0.075%).
Thanks

Your question concerns investing in general, not just the pillar 3a. Most if not all people on this forum will tell you that investing in equities is worth it: if you stay the course with equities, you'll get more out of it over time than when you just keep cash. Reading your posts, however, i suspect the highest risk for you might be your behaviour in a correction or bear market situation. I would suggest you start investing with small amounts and see how you react to drops of 10%, 20% or even 50%. If you sell at the bottom, investing and high-equity 3a pillars are not for you.
BTW there are better cash pillar 3a than the one you mention. CIC banque, for instance, has a return of 0.65%. So if you really go for cash only, then at least choose the best one. Good luck

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #212 on: May 18, 2016, 05:52:41 AM »
postfinance changed their pricing structure (starting from january 2017):
https://www.postfinance.ch/fr/priv/prod/eserv/etrade/detail/price.html

now the depot account is not free (90 chf per year) but you can use this money to buy transactions (you pay 90 chf for the depot, but you receive 90 chf credit for transactions).

wapiti

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Re: Switzerland: How should I buy index funds here?
« Reply #213 on: May 18, 2016, 10:44:16 AM »
There no advantage for the customer (execept the 10% and 20% money back if there is an high volume of transactions) with this new pricing.
« Last Edit: May 18, 2016, 11:26:48 AM by titi22 »

Shef

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Re: Switzerland: How should I buy index funds here?
« Reply #214 on: May 18, 2016, 11:14:09 AM »
Thank you for the information Grog. Too bad, I have to finally sell my few UBS-shares I bought nine years ago... I think all brokers wants to encourage their customers to trade a lot. So they can also charge CHF 97.20 for the tax-receip, which is in my opinion a rip-off price.

Does anyone has experience with foreign brokers? Does e.g. Germany also charge a stamp-duty? I am considering to open a comdirect-account. 

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #215 on: May 18, 2016, 12:01:24 PM »
I don't know but unless you have an huge amount of money I wouldn't ask for a tax-receip, I usually declare everything myself, sometimes using pc screenshots and nobody ever asked for a formal receipt.

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Kilbim

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Re: Switzerland: How should I buy index funds here?
« Reply #216 on: May 18, 2016, 01:57:48 PM »
Thank you for the information Grog. Too bad, I have to finally sell my few UBS-shares I bought nine years ago... I think all brokers wants to encourage their customers to trade a lot. So they can also charge CHF 97.20 for the tax-receip, which is in my opinion a rip-off price.

Does anyone has experience with foreign brokers? Does e.g. Germany also charge a stamp-duty? I am considering to open a comdirect-account.

You could try www.truewealth.ch, it's some sort of robo-advisor with some ETFs.
I am in the process of starting with them, what made me choose them is that they charge 0.5% p.a., including buying fees and everything. So if you invest small sums (less than 500 a month) they are a good deal. Included in the price it's also the documents for tax declarations, it seems.
There is also a thread about truewealth on this forum.
« Last Edit: May 18, 2016, 02:09:56 PM by Kilbim »

wapiti

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Re: Switzerland: How should I buy index funds here?
« Reply #217 on: May 18, 2016, 02:09:30 PM »
You can transfer your position to an other broker. It cost 108 CHF per  position, could be a good deal ?!

dmn

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Re: Switzerland: How should I buy index funds here?
« Reply #218 on: May 24, 2016, 02:16:49 AM »
Does anyone has experience with foreign brokers? Does e.g. Germany also charge a stamp-duty? I am considering to open a comdirect-account.

I used comdirect and I was very happy with them. The main drawback is that your tax declarations become more complicated, because Germany will tax all dividends or distributions (at least they did for me - not sure if this is different because I am a German expat). Then you have to:
(1) Declare your capital income in Switzerland in order to correctly pay tax here. You can declare the non-refundable part of German taxes to avoid being taxed twice.
(2) Apply for getting back the refundable part of the German taxes. I believe this requires a tax declaration in Germany including some proof that you paid taxes in Switzerland.

The first one is straightforward as long as you make sure that you only buy ETFs which disclose the information required for Swiss taxes; you can check at https://www.ictax.admin.ch/extern/de.html whether the information on taxable income is available for the fund's ISIN.

I did not get to do the second thing yet because the amounts of refundable German tax were so small that I did not care about getting it back, so I cannot say how difficult this is.

The benefits are much lower brokerage costs and no custody fee if you also have a normal bank account at comdirect. Also, Germany does not charge stamp duty on stock transactions.

Kilbim

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Re: Switzerland: How should I buy index funds here?
« Reply #219 on: June 06, 2016, 11:45:18 AM »
Hi all.
I ask this here as well to my fellow swiss.

I am in the process of building a 3-fund portfolio, which normally means:
us total stock
international total stock
bond total stock (US).

Now my actual choices for BONDS are:
Vanguard Total Bond Market ETF (BND) USD (30 billions assets)
iShares Swiss Domestic Government Bond 1-3 years CHF (60 mio assets)
iShares Swiss Domestic Government Bond 3-7 years CHF (410 mio assets)
iShares Swiss Domestic Government Bond 7+ years CHF (122 mio assets)

I want bonds for stability obviously, but Grog said swiss bonds are something different from other bonds and at the moment overpriced. Based on his feedback I also decided to ignore corporate bonds. Apart for thisI am not sure what to buy anymore: he suggests short-term bonds are riskier, and also that swiss bonds are riskier in general because their price go up in recessions and right now they might be overpriced. But USD bonds are risky because of currency-related risks.

So it seems my choices are:
iShares Swiss Domestic Government Bond 3-7 years CHF
iShares Swiss Domestic Government Bond 7+ years CHF

or
Vanguard Total Bond Market ETF (BND) USD
iShares Swiss Domestic Government Bond 3-7 years CHF

I am not sure I will hold my investment for 7+ years (I want to, but I can't be sure of that). Does this matter?
(I also don't trust buying only iShares Swiss Domestic Government Bond 3-7 years CHF and nothing else)

Any suggestions here?

EdenHazard

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Re: Switzerland: How should I buy index funds here?
« Reply #220 on: July 07, 2016, 02:42:42 PM »
I am a long time index fund investor, but only recently moved to Switzerland

I have the accumulating ETF iShares Core MSCI World UCITS ETF, Irish based. This ETF is stored with a European (non Swiss) bank/broker.
How do I need to declare this ETF in my Swiss tax report? I read in this thread I need to go  https://www.ictax.admin.ch/extern/en.html#/ratelist
I guess that returned number is the total dividends that accumulating ETF received in 2015? How is this taxed in Switzerland?
« Last Edit: July 07, 2016, 02:56:02 PM by EdenHazard »

osetrix

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Re: Switzerland: How should I buy index funds here?
« Reply #221 on: July 09, 2016, 02:40:42 PM »
Hi all
Thanks for all the great info in this post. I'm just getting ready to start with investing. Have no exprience (other than avid forum reader) and don't want to invest too much in both time & investment fees. I plan on investing about 2000 CHF monthly (can of course also do it only once a year), got the recommendation to start with Avadis. What is your opinion on this fund: Avadis Growth, ISIN CH0032831841, 60% shares, 40% bonds, TER 0.62 (but no account fee, no investment fee, minimum of 50Chf gets invested monthly)? I thought of investing here for some years to get some experience / decent starting capital before switching to a trader platform.
Thanks!

wapiti

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Re: Switzerland: How should I buy index funds here?
« Reply #222 on: July 10, 2016, 02:46:09 AM »
@EdenHazard depending the amount of money, I would recommend you to use an accountant the first time. The next year you can do it yourself.
 The dividends are taxed in Switzerland for the distributing fund and accumulating fund (http://www.taxinfo.sv.fin.be.ch/taxinfo/display/taxinfo/Anlagefonds). You will find your fund under https://www.ictax.admin.ch/extern/en.html#/ratelist and you will need to report dividend and stock value on your tax report.

@osetrix Is it for your third pillar ?

osetrix

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Re: Switzerland: How should I buy index funds here?
« Reply #223 on: July 10, 2016, 03:06:14 AM »
@titi22 no, Avadis does not offer a 3a account (to my knowledge). I currently don't pay taxes in Switzerland (research fellowship abroad) and hence don't invest in 3a atm. It is just a mostly passively managed (92%) all-in-one solution without account fees / low minimal deposit that was recommended for lazy beginner investors on a Swiss trader forum, so I was wondering if you have any remarks.

samuck

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Re: Switzerland: How should I buy index funds here?
« Reply #224 on: July 14, 2016, 01:55:32 PM »
What is your opinion on this fund: Avadis Growth, ISIN CH0032831841, 60% shares, 40% bonds, TER 0.62 (but no account fee, no investment fee, minimum of 50Chf gets invested monthly)?

Hi osetrix, TER too high and equities:bonds ratio too conservative for your age (but I don't know your ability and willingness to stomach volatility). What about Vanguard All World or iShares core msci world? Add some bonds; 20% should do it.

wapiti

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Re: Switzerland: How should I buy index funds here?
« Reply #225 on: July 14, 2016, 02:11:30 PM »
No swiss broker will offer good fee if you invest only 50 a month. In this specific case,  Avadis Growth could be a good option.
If you have more money to invest, i would recommend, as samuck, vamguard funds.
« Last Edit: July 14, 2016, 02:24:12 PM by titi22 »

osetrix

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Re: Switzerland: How should I buy index funds here?
« Reply #226 on: August 03, 2016, 12:46:09 PM »
Ok, thanks for your advice, much appreciated. Two further questions:

1. I'm considering cornertrader and Charles Schwab International as online brokers. What are the implications on withholding tax and Swiss transaction tax? Which one do you recommend?

2. Can someone recommend a 3 ETF investment scheme (80% stocks, 20% bonds, stock ETFs: one all world, one Swiss market, capped weighting of Nestlé, Novartis & Roche.

wapiti

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Re: Switzerland: How should I buy index funds here?
« Reply #227 on: August 03, 2016, 01:36:47 PM »
1) Are you a swiss citizen ?
For swiss citizen, only funds which are based in switzerland and distribute dividends have withholding tax.

2)I don't know bond ETFs, but for stocks, I would choose Vanguard all world, SMI or SPI, SLI

I would recommend to choose the all world scheme (which contain 3% of Switzerland stocks) to remove the home bias.

alexi

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Re: Switzerland: How should I buy index funds here?
« Reply #228 on: September 01, 2016, 01:34:13 AM »
Hi all,

First of all, thanks a lot for a very informative discussion, I really appreciate it!

I'm looking to get started investing in ETFs with some of my excess cash savings. I would have liked to buy a single ETF (to minimize commissions), but the MSCI ACWI funds aren't very liquid on SWX. I figured I could replicate it easily as follows:

  • ~90% iShares Core MSCI World UCITS ETF (SWDA), 0.20% TER
  • ~10% iShares Core MSCI Emerging Markets IMI UCITS ETF (EIMI), 0.25% TER

Both of these funds are accumulating, so they'll reduce tax headaches. They are also both in USD on SWX, and I'm not sure if this is something I should worry about. I'm a Spanish citizen living in Switzerland, so I'll either retire in Switzerland or Spain. Is having these investments in USD an issue? There aren't any suitable replacements in CHF (as far as I know), but I could buy the same funds in EUR (trading currency only) on Xetra. I guess that really doesn't make a difference, though... Are there any other good options I haven't taken into account?

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #229 on: September 01, 2016, 01:44:43 AM »
Hi all,

First of all, thanks a lot for a very informative discussion, I really appreciate it!

I'm looking to get started investing in ETFs with some of my excess cash savings. I would have liked to buy a single ETF (to minimize commissions), but the MSCI ACWI funds aren't very liquid on SWX. I figured I could replicate it easily as follows:

  • ~90% iShares Core MSCI World UCITS ETF (SWDA), 0.20% TER
  • ~10% iShares Core MSCI Emerging Markets IMI UCITS ETF (EIMI), 0.25% TER

Both of these funds are accumulating, so they'll reduce tax headaches. They are also both in USD on SWX, and I'm not sure if this is something I should worry about. I'm a Spanish citizen living in Switzerland, so I'll either retire in Switzerland or Spain. Is having these investments in USD an issue? There aren't any suitable replacements in CHF (as far as I know), but I could buy the same funds in EUR (trading currency only) on Xetra. I guess that really doesn't make a difference, though... Are there any other good options I haven't taken into account?
Why do you think that will reduce tax headache? In CH accumulating and distributing are not different tax-wise. Every acc etf must report the dividend even if reinvested and you have to take the information and report it to your tax forms.

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alexi

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Re: Switzerland: How should I buy index funds here?
« Reply #230 on: September 01, 2016, 02:36:18 AM »
Why do you think that will reduce tax headache? In CH accumulating and distributing are not different tax-wise. Every acc etf must report the dividend even if reinvested and you have to take the information and report it to your tax forms.

Really? I didn't know that, thanks for the information. I work for an international organization and my salary is exempt from taxes, so I assume I will get the withholding tax back when I declare it.

I guess then at least it will save on the brokerage fees of reinvesting the dividends.

Stashing Swiss-style

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Re: Switzerland: How should I buy index funds here?
« Reply #231 on: September 01, 2016, 03:35:57 AM »
I don't believe you get the withholding tax back.  You don't pay tax on your earned income but you have to pay tax on unearned income such as dividends.  You will have to, for example, pay wealth tax when it is applicable (unless your non-taxable status is different from mine).

alexi

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Re: Switzerland: How should I buy index funds here?
« Reply #232 on: September 01, 2016, 04:02:53 AM »
As long as the dividends are less than 17,663 CHF a year (given that they'd be my only source of taxable income), they wouldn't be taxed, right? Apparently the GE website just changed to a super-fancy yet useless one, so I couldn't find the information on what you have to pay wealth tax on...

wapiti

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Re: Switzerland: How should I buy index funds here?
« Reply #233 on: September 04, 2016, 06:37:59 AM »
Be careful, not to mix up withholding tax and income tax.

The swiss based distributing funds have withholding tax on dividends. The taxes will be reimburse, after tax form has been filed.
For foreign distributing/accumulating fund (not sure for accumulating swiss based fund), there is no withholding tax. However, you have an higher federal tax when you buy the fund (0.075% for swiss based stock/fund and 0.15 % for foreign based)

In all cases, dividends and accumulating dividends are taxes as income.
However, fund value increases are NOT taxed. (https://www.letemps.ch/economie/2015/02/22/fiscalite-produits-financiers-suisse-se-distingue)

At the end, you have a wealth tax on your wealth (house, stock, fund, saving account)

samuck

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Re: Switzerland: How should I buy index funds here?
« Reply #234 on: September 04, 2016, 01:21:52 PM »
Is having these investments in USD an issue? There aren't any suitable replacements in CHF (as far as I know), but I could buy the same funds in EUR (trading currency only) on Xetra. I guess that really doesn't make a difference, though... Are there any other good options I haven't taken into account?

Hi Alexi, curreny is not really an issue, because you have the conversion effect from the underlying currencies of the fund versus your "reporting" currency at some point anyway. More important, make sure the fund is UCITS - so you could transfer it freely within EU. Btw, Vanguard Wrld (ucits) is traded in USD, EUR, and CHF on the SIX.

https://en.m.wikipedia.org/wiki/Undertakings_for_Collective_Investment_in_Transferable_Securities_Directive_2009

wapiti

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Re: Switzerland: How should I buy index funds here?
« Reply #235 on: September 04, 2016, 01:47:34 PM »
Quote
  • ~90% iShares Core MSCI World UCITS ETF (SWDA), 0.20% TER
  • ~10% iShares Core MSCI Emerging Markets IMI UCITS ETF (EIMI), 0.25% TER

There are multiple factors to take into account:

-The liquidity of the fund
- The size of the fund
- The currency of the fund
- TER
- In which exchange the fund is based
- Distributing or Accumulating
-The difference between index (for exemple MSCI mkt vs FTSE emerging mkt)

Like said before accumulating fund doesn't offer any tax advantage, however it's accelerate the dividend reinvestement and lower the transaction cost.

If you would like to have only one fund, I would propose Vanguard FTSE All-World UCITS ETF TER 0.25



alexi

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Re: Switzerland: How should I buy index funds here?
« Reply #236 on: September 05, 2016, 05:43:00 AM »
Thank you all for the clarification on the tax situation. It is clear that it's a mess, so I'll probably end up going to a professional at least the first year.

Btw, Vanguard Wrld (ucits) is traded in USD, EUR, and CHF on the SIX.

That phrasing is somewhat ambiguous, I guess you mean VWRL is traded in CHF in SWX, and in other currencies in other exchanges. I was initially looking for the USD version on the Swiss exchange as well.

I had looked at VWRL before, but I discarded it because it was distributing and because it looks like the trade volume in SWX is not that high. I like the fact that I can purchase it in CHF, though, that would save me some money in currency conversions (CornèrTrader charges 0.5%). Are the dividends payed as CHF as well?

BTW, how do you guys deal with currency conversions? CornèrTrader's fee seems a bit high...

wapiti

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Re: Switzerland: How should I buy index funds here?
« Reply #237 on: September 05, 2016, 08:14:29 AM »
No, the dividends are distributed in USD for VWRL (i was also suprised, but this make sense).
You are right the fund is not very liquid.

Like you said, I advise to take a professional the first year to do your taxes.

With swissquote, you need first to exchange CHF to USD and then you can buy stock/etf. You can even directly send USD on the account.
Btw, Vanguard Wrld (ucits) is traded in USD, EUR, and CHF on the SIX. -> that's wrong on the SIX it's only CHF.

BTW, with Swissquote, you only have to pay 9.- for all ETFs on the SWX (whatever the amount invested)+federal stamp+0.85 for live info+ exchange fee. For me, it's an interesting deal.

alexi

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Re: Switzerland: How should I buy index funds here?
« Reply #238 on: September 05, 2016, 08:50:58 AM »
How much does swissquote charge for the currency exchange? I couldn't find that information on their website.

wapiti

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Re: Switzerland: How should I buy index funds here?
« Reply #239 on: September 06, 2016, 12:59:26 PM »
They have they own currency rate. I can rely help your here. Give them a phone call.

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #240 on: September 07, 2016, 12:22:17 AM »
Honestly the currency exchange on corner trader is good. You only can have a cash account in chf so USD dividend are automatically converted to chf with an attractive rate, muuuuch better than postfinance and at the same level as swissquote. The advantage of swissquote is that you can deposit cash of different currency.
While is true that swissquote is only 9 chf, don't forget that you have to pay up to 200 chf per year as deposit fee, something cornertrader doesn't charge.

About distributing vs accumulating: while the dividend are reinvested faster and cheaper I still prefer distributing for a couple of reasons:
1) much better when you are not in accumulation but in retirement. If you need 40k and 20k come from dividend, you pay less taxes than selling 40k of shares, because 20k of income is tax free and you only pay transaction cost for selling 20k of shares, not 40k
2) since we cannot invest transaction-cost free in ch, is nice to have a cost-free cash flow from dividends to clover / replenish the emergency fund without having to sell accumulating shares.

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wapiti

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Re: Switzerland: How should I buy index funds here?
« Reply #241 on: September 07, 2016, 01:03:45 AM »
Overall, the cost between Swissquote and Cornertrader is quite close. I would still recommend to a cost simulation.
On cornertrade side, there two points to be know: Each trade on the SIX have 20.- min fee and to withdraw the money you need to have a tradercard which cost 50.- a year (free the first year)
Moreover, i called one time the support, it was a shame for a bank.

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #242 on: September 07, 2016, 05:16:47 AM »
Overall, the cost between Swissquote and Cornertrader is quite close. I would still recommend to a cost simulation.
On cornertrade side, there two points to be know: Each trade on the SIX have 20.- min fee and to withdraw the money you need to have a tradercard which cost 50.- a year (free the first year)
Moreover, i called one time the support, it was a shame for a bank.

Just a clarification: the tradercard is needed only if you want money from an ATM. You can always write your contact guy an email saying "I want 1000 chf from my depot to my registered bank/post account" and you receive the money the day after. I agree the support is not at a high level, but I had my problems with swissquote too. I think is a wash between them honestly. i would suggest Swissquote to people dealing with multiple currencies or people trading a lot, and cornertrader for people trading4 times a year. Maybe even the new postfinance etrading could be a solution for this last group of people.

alexi

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Re: Switzerland: How should I buy index funds here?
« Reply #243 on: September 07, 2016, 06:13:04 AM »
The more I look at Swiss brokers, the more I lean towards Interactive Brokers UK. They are significantly cheaper, even taking into account the $10 minimum monthly fee. Trading 2 ETFs 4 times a year works out to $120 on IB and 280 CHF on CornerTrader. That's without even taking into account the 0.5% exchange fee.

The only potential catch with IB, as far as I know, is the US estate tax, but that only applies if you die and have more than 60k USD in cash.

Am I missing something else?

osetrix

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Re: Switzerland: How should I buy index funds here?
« Reply #244 on: September 07, 2016, 07:59:32 AM »
What is your opinion regarding the currency risks? (I want to retire in Swiss francs). I intend to use the Vanguard all world ETF as my main vehicle but I'm a bit concerned about the foreign currency exposure. This article here (https://personal.vanguard.com/pdf/ISGCMC.pdf) recommends a partial currency hedging (instead of home bias) to reduce this exposure. Would a mix of Vanguard  FTSE all world and e.g. UBS ETF (IE) MSCI ACWI SF (ISIN: IE00BYM11L64) make sense to you?

wapiti

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Re: Switzerland: How should I buy index funds here?
« Reply #245 on: September 07, 2016, 02:22:19 PM »
I have quite investigated the hedging/unhedged currency.
Depending the base currency chosen, conclusions between researches diverge. Moreover, the hedged contract  lasts one month for most of ETFs, so a hedged ETF can't counterbalance long term trends.
UBS ETF (IE) MSCI ACWI SF has a synthetic replication, which is for me a drawback, but currently, no other CHF hedged ETF for all world is available.
Be aware, that the hedged ETF will not only hedged the base currency of the index, but all currencies of the index.

Ishares offers for developed markets: iShares MSCI World CHF Hedged .

The big issue is that the simulated data history of CHF hedged index, it's not available on Reuters or Bloomberg platform. So, it's impossible to make simulations.
 

Grog

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Re: Switzerland: How should I buy index funds here?
« Reply #246 on: September 08, 2016, 01:51:14 PM »
I think in the accumulation phase you should not hedge because theoretically you can profit over the long term from the increased volatility due to currency exchange rate. On the other hand, if you are selling and living of it hedging could avoid and limit the added volatility.

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irishteacherinvestor

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Re: Switzerland: How should I buy index funds here?
« Reply #247 on: September 11, 2016, 07:02:45 AM »
Hi all,

I am new to investing but have found this forum very useful. Here are the details, I would love some advice if you have time:

Nationality: Irish
Permit: B permit since 2013
Canton: Vaud
Age: 32
Amount to invest: 15000CHF and then 1000CHF per month
Currently: I have a 3a with BCV and Swisslife for past 3 years with approx 15000CHF in it

We recently had a talk about investing and the guy really sold me on the idea of index funds. I am looking for something easy (for dummies let say) with little time needing to be spent on it but I do not know how to even get started. The guy recommended this 3 way split for a British citizen:

- Vanguard FTSE 250 ETF Index
- Vanguard FTSE All World ETF Index
- Vanguard UK Gilt

BUT I am not a UK citizen to whom this was aimed at.

Here are my main questions:

1. How do I go about buying these Vanguard stocks listed above?
2. Should I buy a Swiss Gilt/Bond  since I live here now or should I buy an Irish one?
- 2.1 If so, which Swiss one should I buy?
3. What broker platform is best to do this with?
4. Should I keep paying into my 3a pilier accounts listed above or close/transfer them somewhere else?

Thank you very much for any advice in advance

wapiti

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Re: Switzerland: How should I buy index funds here?
« Reply #248 on: September 11, 2016, 02:19:46 PM »
Quote
1. How do I go about buying these Vanguard stocks listed above?
The portfolio above is too focused on U.K.
I would go 100% Vanguard FTSE All World ETF Index
Quote
2. Should I buy a Swiss Gilt/Bond  since I live here now or should I buy an Irish one?dividends.
As you are still young, I would go full equities, so no bond. This also depends on the risk you are willing to take. Answer to this survey https://personal.vanguard.com/us/FundsInvQuestionnaire to find the best allocation.
Quote
3. What broker platform is best to do this with?
Swissquote or Cornertrade, if you would like a swiss platform. In your case with an investment of only 1000.- a month, I would advise Swissquote, they offer a 9.- flat fee for all ETFs traded on the SIX. Why not invest 2000.- every two months ?

Quote
4. Should I keep paying into my 3a pilier accounts listed above or close/transfer them somewhere else?
Check the current fee and return. Postefinance offers a passive fund with 0.92% TER with high equities allocation.
If you're planning to retire early (40-50 years old), I would not invest in 3rd pillar.
 
The website Obermatt has made an excel sheet to find out if the 3rd  is a good investment.
www.obermatt.com/00/excel/Obermatt-säule-3a-steuer-rechner.xlsx
« Last Edit: September 11, 2016, 02:30:27 PM by titi22 »

irishteacherinvestor

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Re: Switzerland: How should I buy index funds here?
« Reply #249 on: September 12, 2016, 01:41:34 AM »
Quote
1. How do I go about buying these Vanguard stocks listed above?
The portfolio above is too focused on U.K.
I would go 100% Vanguard FTSE All World ETF Index

Yeh the guy who gave us the example said this was based on a British international teacher who was thinking of maybe retiring there. He was saying that is kind of a personal choice based on currency and where you might want to be. His key take home message was:
Quote
Create a Diversified Portfolio of Low Cost Exchange Traded Index Funds

Example:
(British) stock index
Global stock index
(UK) bond index

Annual costs:  0.15% each year
No capital gains taxes to pay
But I am not sure about Switzerland?? Would I have capital gains tax to pay?

Quote
2. Should I buy a Swiss Gilt/Bond  since I live here now or should I buy an Irish one?dividends.

As you are still young, I would go full equities, so no bond. This also depends on the risk you are willing to take. Answer to this survey https://personal.vanguard.com/us/FundsInvQuestionnaire to find the best allocation.

Yes I think I would probably go 70% global stock index, 20% national stock index (BUT which one???) and 10% national bond index (but again WHICH ONE??)

If I want to go with the above allocation, what ones should I go for?

Quote
3. What broker platform is best to do this with? 

Swissquote or Cornertrade, if you would like a swiss platform. In your case with an investment of only 1000.- a month, I would advise Swissquote, they offer a 9.- flat fee for all ETFs traded on the SIX. Why not invest 2000.- every two months ?

Here I am lost... What is the difference? And I thought the whole point of investing in a stock INDEX fund was that you don't have to be trading and managing the fund? You just buy it and hold onto it for a long long time. Would I have to physically go onto Swissquote or Cornertrade every 2 months and just click "buy" on the same stocks I had originally bought? (the 3 indexes listed above)

Quote
4. Should I keep paying into my 3a pilier accounts listed above or close/transfer them somewhere else?
Check the current fee and return. Postefinance offers a passive fund with 0.92% TER with high equities allocation.
If you're planning to retire early (40-50 years old), I would not invest in 3rd pillar.
 
The website Obermatt has made an excel sheet to find out if the 3rd  is a good investment.
www.obermatt.com/00/excel/Obermatt-säule-3a-steuer-rechner.xlsx

Thanks for this. I invested in the 3a pilier 2 years ago just to put my savings somewhere really! I got about 600-800CHF tax back which seemed like a good return to me but maybe I should just close it altogether and invest it in stocks instead?? But if I do this will I be charged to take the money out? Can I even do this? Or is that 15000CHF I have put in now there until I am 65? I've heard I can withdraw it if I leave the country? Is that right?

5. I guess a key thing I need to work out is HOW and WHERE to invest in the stocks from:
So if go with Cornertrade or Swissquote lets say, do I pay them a fee for using their platform and if so, how much?
If I only want to invest in the 3 things above: national index fund, global index fund and a national bond index - how do I know which ones to buy if it just me doing it? How do I ensure I am buying an index fund and not other ones?

As you can see... I am a beginner here so dumb it right down for me!! Thank you