Hello!
Almost all of my exposure to the Swiss market (and to the Swiss franc) is on 2nd and 3rd pillars. It is a small portion of my total assets. All my spending is in Swiss francs, and will remain so after I retire.
I decided to increase my exposure to the Swiss stock market. I am considering doing so via index funds (not exchange-traded), held in Switzerland and free from stamp duty.
I use IBKR for US-domiciled ETFs, Degiro for IE UCITS, and VIAC for the third pillar.
I am open to another provider, and to a Sparplan.
I had a look at Saxo but their Sparplan is ETF-only, and at Finpension but they have sizeable fees on taxable accounts.
Which provider would be the cheapest for holding Swiss index funds in a taxable account?
Stamp duty is acquisition cost, it’s not the main driver for the investment (if you optimize it, you should optimize the whole cost, e.g. brokerage fee, exchange fee, etc. in practice the stamp duty might not be significant vs the other costs depending on the broker).
Also there’s no stamp duty when buying through a foreign broker (such as IBKR).
As explained by @nabalzbhf , it’s important to look at total cost of ownership (buying costs + TER%). Buying costs are only applied at time of buying. TER% is every year.
For example a Swiss ETF stamp duties would be 0.075% to buy and 0.075% to sell. So if a holding period is 5 years, then cheaper TER% ETF might be able to compensate the loss due to stamp duties.
But to answer your question
Here is an index fund which might be of interest. It’s from Swisscanto. TER 0.15%. You can buy it on Swissquote. It might also be on IBKR.
I personally think UBS SPICHA (ETF) would also be a good option. TER 0.09%
Thank you. I was aware that a low TER would offset the stamp duty; but I was hoping to find more competitive index funds. Here I can see a few with a 0.10% TER but I need to see if they are available for the general public.
You can buy it for flat fee of 9 CHF (at Swissquote) and zero stamp duties. This is part of Prime partners funds. It’s actually a good choice. TER 0.1%
Accumulation versus distribution has no effect on taxation in Switzerland.
I can think of only two securities I held in the past, that weren’t taxed:
Berkshire Hathaway, because back then, we didn’t have access to many good, diversified funds as we do now, and unfortunately I held the horribly carbon-intensive BRK.
And BOXX, as a convenient way to have fixed income for the short term, before Trump II and the dollar fall.
It is blatantly illegal on this side of the pond, and there is plenty of new legislation preventing what allowed the cum-ex scheme to happen. It will be taxed. And people are still in jail for this kind of invention.
There are funds low on dividends, but it means high on “growth” companies, ie cash-burning, high-risk ARKK-type companies. It will likely lack diversification across cycles.
BRK contains airlines but also primarily mining. The business model is to grind mountains until they are transformed into dust, then into toxic mud.
Transforming entire mountains into dust takes phenomenal amounts of oil, which makes mining by far the most polluting industry of our time, and BRK the largest shareholder of the most polluting industries of our times.
Return on investment in BRK is directly derived from burning the planet, and will be directly responsible of the scale of the migration events that will happen when hundred of millions will starve.
I was hoping it’d have a single dividend event like the accumulating (not tracking Swiss market) ETFs. In my canton one needs to manually specify amount held per dividend date, the software doesn’t infer it from the buy dates for some reason. But there seems to be some regulation that creates a proliferation of dividend dates for Swiss market-tracking funds…
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