I 've read a lot of negative comments about CHDVD, which is not optimal in terms of tax. I’d like to add a little nuance here. When we look at it more closer, the total return is higher than the other 2 etfs, and I wonder if it can cover the difference in dividend tax. Indeed, according to the product page on IB: Over 5 years 9.47% per year on average and 8.19% since the inception of the etf in 2014. CHSPI over 5 years averages 6.38% and 6.69% since inception. SMICHA over 5 years is 7.07% and 6.87% since its creation. The dividend yield are CHDVD: 3.63% CHSPI: 2.77% SMICHA: 2.85 which is not a huge difference either. I know, however, that the history is not long enough to have a better analysis, but I think it should be given more consideration. What do you think ?
In a more constructive manner: all underlying indices go at least 16 years back, so feel free to benchmark yourself.
Thank you for the link but it confirm my thinking. Total return over 15 year SPI SELECT 20 SDIVIC 8.53% vs 6.31 for SPI total return
I’m not sure it’s pure coincidence: one of the appeals of big Swiss companies’ stocks are dividends (for all the reasons, deluded or rational, you can imagine: investors and the market are not always rational) so it’s possible that big Swiss companies with a steady and growing stream of dividends have attracted more foreign capital than other Swiss companies.
My main grief with this fund (and the SPI® Select Dividend 20 Index) is that it is very concentrated. It holds the stocks of only 20 companies and the top 4 represent 58% of the total holdings.
I would not invest in it if I was, for any reason, not considering investing in a fund tracking the SMI: to my amateur understanding, they share much of the same risks.
I agree for the concentrated point but it’s also the case with the CHSPI. I don’t find a better CHF ETF with better return and less concentred expect maybe a SP500 hedged CHF ETF.
CHSPI has 209 holdings, the top 3 holdings represent 44% of the total holdings (top 4 at 48% for comparison), then the other holdings are at a less than 5% weighting each. It is more diversified. Not perfectly diversified, but more (in a siginificant enough way for me, but that is a personal assessment).
Edit: on a side note, I am not particularly hot either for investing in an SPI tracking fund. I’m practicing stock picking/pseudo self-indexing for Swiss stocks outside of a global index (because if I am going to take the concentration risk, I might as well save on the TER). If I had to choose an index for Swiss stocks, I’d go with SMIM or other mid-small cap index.
a) if chdvd continues to outperform others by that much, it’s obviously gonna be a better deal, even on a net basis. it’s a big if, of course, so it depends on your expectations.
b) yep, many ch etf’s are way concentrated. as i’m one of the few heavy home bias guys, i’d certainly recommend to keep the heavyweights in check. personally holding spmcha + chspi while complying with my own single company size limit on portfolio level (mostly watch out for nestle [obviously], roche [secondary share class in many mid cap etf’s] and lindt [two share classes with significant size in many mid cap etf’s]).
How are Swiss ETF treated tax wise? I guess one needs a CH ISIN to avoid taxes at fund level. Taxes on investor distributions can presumably be deducted from the tax liability? Do I need to buy these ETF at a Swiss broker or would IB equally work without additional tax implications?
I like CHSPI but many seem to prefer a Swiss asset manager, is there a reason for this?
On can buy it on IB yes. I am not an expert but from my point you can’t avoid taxes from dividend wherever ETF location
Yes, make sure the ETF has a CH ISIN. 35% Verrechnungssteuer will be withheld but you will get that back when your tax declaration is processed.
There is no tax advantage with a Swiss broker for Swiss ETFs. IBKR is fine for that as well, at least as long as you don’t lend out your shares. I.e., don’t enter the ‘Stock Yield Enhancement Program’ and don’t use a margin loan to ensure there are no issues getting the Verrechnungssteuer back.
At least for an index ETF, I don’t see a reason why this should matter. I’m not aware of anything speaking against CHSPI.
Great, thanks a lot!
On which exchange do you purchase Swiss ETF on IB usually? I checked today and it showed me a quote for “EBS” which seemed to have quite a big bid/ ask spread for CHSPI. Am I missing something or is this normal?
This is SIX. CHSPI is not traded anywhere else.
And, there could be also tons of hidden orders that you don’t see, so the actual spread should be not that bad.
Thanks a lot, do you use any Algo to purchase CH ETF on IB or instead place the order between the mid and ask shown on screen? For VT I usually used the IB mid price Algo but that does not seem available for non-US stocks…
I personnaly use recurring investment on CHDVD