Currencies when trading

I have a question to the wise folks in here… I am a relative newbie but I am reading up as much as I can. My issue is the following: i it actually possible to have a well diversified portfolio that has low expenses and whose products are only traded in CHF? I am worried that the currency conversions of buying and selling something such as a Vanguard FTSE All-World invalidates the low TER. Or am I simply worrying for nothing?

You are indeed worrying for nothing. I first opted for the Swiss broker and hence I chose the Vanguard funds that were traded on SIX, and in CHF. VUSA, VEUR, VWRL you can all buy in CHF.

However, if you choose IB, you can still buy these ETFs, or their USD or EUR versions. And the cost of exchanging 100’000 CHF at IB will be something around 5-10 CHF.

But as a Swiss resident, you save the most money buying US domiciled ETFs. The exchange fees are nothing in comparison to these savings. Taxes is where you save the most.

Thanks Bojack, that’s great input. Pardon my total ignorance: so even if they are traded on SIX in CHF they are still considered domiciled in the US and thus, as you would say, tax efficient?I also opted for a Swiss broker. I know I pay more than IB (at some point I may switch) but until I learn the craft I love the fuzzy feeling of being with a Swiss institute.

Not necessarily. Funds traded on European exchanges are mostly based in Ireland or Luxemburg.
Check this thread for details on taxes and this one about picking an ETF traded on multiple exchanges.

SWX:VWRL that you mentioned in your first post is based in Ireland but traded in CHF on SIX.
Around 50% of the assets this ETF fund holds are located in US and likely traded in USD.

I think you are confused between where a fund is domiciled, where it is traded in which currency vs what assets the fund holds and in which currency the underlying assets are traded.

Thanks for the links T78a. I was indeed a bit confused and have a much clearer picture now! I still struggle in finding a bottom line though. But I’ll keep reading…

No, the US-based Vanguard ETFs are not traded on SIX. What I said is that you can have an American broker and buy European stocks.

I may not be fully correct, but if you look at the ISIN, there is the ISO code which tells you the domicile of the asset. American assets have US00000 and the European Vanguard ETFs have IE00000 (Ireland).

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