EDEN - MSCI Denmark ETF: 0.53% TER domiciled in US
XACTC25 - OMXC25 ESG: 0.20% domiciled in Sweden
Does anyone know what is better for Swiss residents in such a constellation in terms of withholding taxes? The TER difference is quite stark, but I could not find much about Swedish ETFs for L2TW, for L1TW it seems Denmark has the same agreement with both countries. For L2TW for US would be adding it to DA-1 form, but for Sweden I have no idea and couldnât seem to find this on Google.
As you well know, geting treaty rate tax credit in Switzerland with the DA-1 is not the hard part. Having the foreign tax administration pay back withholding tax from non-treaty to treaty rate is.
Denmark (and Sweden) both get free withholding tax vouchers at IBKR. But you still have to actually reclaim it in Denmark (or Sweden). For the US most brokers do so automatically (as required by US law).
Your direct investment idea is clearly superior tax-wise, if you claim everything back (15% in Denmark + 15% L2TW vs 15% in Denmark only). But the same can be said about nearly all ETFs that hold stocks outside their domicile (since Switzerland has good treaties).
Normally I would never suggest owning individual securities for tax reclaim purposes.
But in this case itâs the superior alternative imo, as there are so few index constituents. Itâs relatively easy to manage. Also paying 0.2%+ TER for a fund thatâs 70% Novo Nordisk, is pretty sub-optimal to say the least.
I wonder what the rational for OP to buy a danish etf, if itâs due to past performance seems like itâs a better bet to buy Novo Nordisk directly indeed
Why donât sou buy the DBX MSCI Nordics ETF, whixh is a fairly good ETF. And if you want to jump on the Novo Nordisk Train buy the Novo Share on top, lets say 50/50 eqch? That probably gives you the recen return of MSCI Denmark (which may revert tomorrow if Novo stumblesâŠ) but at the same time a fairly good and well diversified exposure to the entire Nordics?
Fair point. I was tired yesterday and didnât think about that.
That said, at a 0.33 percentage points higher TER for the US-domiciled iShares fund (with at least roughly similar composition), you may just forgo reclaiming the 15% from Sweden and come out similarly (though I havenât looked in those two funds and tracking differences further).
Didnât know it was free. Helpful link, thanks.
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