A journey of a 1000 miles begins with a single step

Cheers! It’s different in every forum :wink:

I’ve read way too many blogposts on the way to invest the first 10k. Let me search again for this piece of information. I guess they advertise the TER for the “bad years” as well, so nobody can sue them in case you have to pay those 0.25%. TER is also not always correct. I think I read in the wertpapierforum (German), that the TD (tracking difference) is more important and funds with higher TER can indeed by cheaper than some with lower TER.

Anyway, I’ll check regarding the payback of the lending.

Being obliged to state a high TER for legal reasons is understandable for me. But they should be more transparent about their actual cost for the client for each year. It’s hard to comprehend just from the factsheet.

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I know it’s not the same. It just seems wrong to mix VWRL with EIMI, where the country classifications don’t match, and one includes small caps while the other doesn’t.

As to NAV, the XDWL I recommend appears to beat the benchmark as well (scroll down to performance chart)

By the way there’s a cheaper alternative, the Ishares IUSN with 0.35% TER.
Still this is far more than Vanguard US Small Cap funds (VB is 0.05% and VSS is 0.13%).

@_MP is wrong in that case.

I chose this one because it had a large number of stocks. I know that the TER is not optimal.
I think I’m not able to buy VB and VSS at DEGIRO, that’s why I chose the SPDR one.

The factsheet of VWRL

If I read this chart correctly:

  • The benchmark is the FTSE All-World index. Question: does this return already take US withholding tax into account?
  • Gross of expenses is the annual return of the fund. Question: Why do they call it “expenses”?
  • Net of expenses is the annual return minus the TER. So it seems like effectively it was 0.27% since inception, but even the Net return is still better than the index.
  • In the last year, the TER was even only 0.22%, but the net fell below the index.

That’s interesting! Maybe someone should give him a hint :wink:
So even if you die (as a non-US citizen) in a land which has a tax agreement (like Switzerland), you only get taxed if your funds have more than 11 Mio USD? That would be fantastic.

I would then buy VT instead of VWRL.

MP writes about this in detail here:

I have invested up to 60kCHF in the famous VT ETF from Vanguard.
Why 60kCHF? Quite simply because I still haven’t managed to get a 100% official answer regarding the estate law in the US which potentially taxes you at a 40% rate at your death on assets exceeding 60kCHF invested in this country. There is a US-Switzerland treaty which, after several (re)readings, is still incomprehensible (if you, dear reader, are a lawyer, don’t hesitate to enlighten us!). Even the tax department of the canton of Vaud couldn’t answer me (or maybe they didn’t understand the question…)

So did you, Mr @1000000CHF get a convincing confirmation somewhere, that indeed, you can sleep relaxed?

According to factsheets its 3344 holdings for the Ishares and 3190 for the SPDR fund. Fairly close.
You can’t buy VB and VSS on Degiro anymore because of the MIFID II. You can buy them over IB though.

As I said: I’m currently searching where I got this information from. I know it was a german FI blog. Atm, I have 20 tabs opened. Still didn’t find it yet.

Of course you should not take anything for granted, and also don’t only rely on one piece of information.

Thanks for the hint! Somehow I didn’t find the iShares one when composing my choice of ETFs. I only found iShares Small-Cap 600 Value (IE00B2QWCY14)

https://www.amcham.ch/publications/downloads/2011/flaws_in_the_current_US_Swiss_estate_tax_treaty_and_the_need_for_a_modern_treaty.pdf

You’re not happy with that one? (written by international tax experts) While they rant about the treaty (obviously they’d like it to be even more favorable, which is why they take amounts way higher than the exemption), they also give concrete examples of how the exemption applies (in short if your worldwide assets are below the current US exemption, currently 11M for single filer, you’re fine).

Edit: that said being above 60k will mean having to do all the IRS filing, so why you might not owe anything to the IRS, doing the filings is probably not super fun.

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Yes, I’m relaxed. I find this thread instructive enough. If I accumulate bigger stash and/or get older I’ll consult my tax lawyer.

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Hi Bojack, unfortunately I didn’t find the blog entry which I was referring to.
Anyway, there’s a thread about securities lending (Wertpapierleihe) here
It’s in German though. Seems that Vanguard is getting more profit from lending, plus they have smaller TD (tracking difference) vs the index than other funds.

So you have to pay the TER of 0.26%, but if the Vanguard fund performs better vs the index (let’s say 1% vs 0.75% for the other funds), then you pay less overall for Vanguard.

Checked again, and it’s indeed the TD which is playing a big role. You have a TCO for an ETF, which consists of internal costs (TER, securities lending, swap fees) and external fees (bid/ask prices, taxes).

In the last 5 years, VWRL has had a negative TD (meaning they were better than the index), see here
If you compare to ACWI funds, that’s a lot better: here

So the VWRL is better in terms of TCO than a lot of other ETFs, even though the TER is higher.

Hoi folks,

Sorry to not be more active/reactive but quite busy these days (yeah I know, everything is a question of prioritization :slight_smile:).

Anyway, about this 60k limit, I was quite convinced after detailing all the sentences of the legal blabla.
Then I got in touch by coincidence with people looking more informed about the topic. They wrote this paper: https://www.amcham.ch/publications/downloads/2011/flaws_in_the_current_US_Swiss_estate_tax_treaty_and_the_need_for_a_modern_treaty.pdf
So far, I’m getting even more confused by the answers about this 60kUSD limit.
My next step is to have a phonecall with the guy to be sure we talk about the same situation details.

I will for sure let you know about my findings!

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What’s unclear in that paper (they give pretty clear examples)? The “flaws” they describe only apply to worldwide wealth amount above the US exemption.

X = global wealth
Y = US situated wealth
E = US exemption (11M or so at the moment)

The exemption applied to the US assets Y is going to be E’ = E * Y/X (exemption prorated to global assets).

From that we derive E’ >= Y iff E >= X (total US situated assets are fully exempted if and only if the total wealth is lower than the US exemption).

Hope that clarifies :slight_smile: (also all the examples in the paper are above the US exemption)

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Completely agree with you and I assume(d) the same.
Except that I talk to one of the person who wrote the article with my specific usecase (family situation) and the answer was I wasn’t exempted… which is why I’m confused.
Anyway, will clarify this and keep you posted!

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