DeGiro and ETF for newbie

Investing / Brokers
1

Hi all,

I’m quite inexperienced in this field, so looking for advices.
I use DeGiro since years to keep my few stocks and checking from time to time (weekly basis), if I’m in the green or red territory :slight_smile:
I do not actively trade, sort of fire and forget (I did that at the beginning, but now I do not have the time to follow-up on that).

So, I wanted to explore the ETF options, but I didn’t fully understand how it works.
Asking around and reading posts here in the forum, I see that - whenever is not sure on where to invest or do not want to stay always up-to-date - best is to select the SP500. But when I search for that in DeGiro, I see lot of ISIN and ETF names related to that and different exchanges.

What is the right criteria to select the ETF? And what about which exchange (should I prefer the SWX among the others)?
For tax declaration, so far I never had problem with the E-statement from Degiro with the shares I own. Will that be the same for the ETF? Usually I give the pdf statement to my Tax consultant and he takes care of the Tax declaration.

Many thanks
Cap

2

I think first you need to make up your mind on what you want to have as an investment strategy. There are different ETFs to achieve a strategy but you need to decide it first

It’s not really a good idea to invest in S&P 500 because many online forums said so. You need to be convinced about it too.

For example -:
One world ETF strategy
One US ETF strategy
Multiple ETF strategy for different areas of world

Maybe watch the following videos and then let us know what you want to do.

International diversification

Home bias

Investing only in S&P 500

To answer your questions. Degiro let’s you buy ETFs from various currencies and various exchanges. But if your base currency is CHF, maybe it’s best to use ETF which is traded in CHF on Swiss stock exchange and this will help you reduce the transaction costs. Of course depends on strategy and hence decide the strategy first

For example S&P 500 ETFs trading on SIX in CHF is

  • SPDR SPY5 (TER 0.03%) , distributing
  • VUSA (TER 0.07%) , distributing
  • I couldn’t find large accumulating ETF trading in SIX in CHF

In addition, dividends are typically paid in base currency of ETF and not the trading currency, so it would be easier to buy Accumulating ETFs if you feel comfortable with it. This would reduce further currency conversion costs.

2 Likes
3

I second the recommendation to choose an ETF that is traded in CHF (so not to pay 0.25% for currency exchange).

If you want to look at something broader (more diversified) than the S&P500, maybe have a look at the FWRA ETF by Invesco which covers basically the whole world. It’s relatively cheap (0.15% TER) and traded on SIX in CHF with an acceptable spread.

4

In addition to FWRA, other one to be considered would be SPDR ACWI (TER 0.12%) while looking at world ETFs at SIX in CHF

5

Thank you all, for your kind feedback. I will take a look to the material shared.

Question about the tax implication: is it enough to bring the E-Report from DeGiro and show it to the Tax Consultant for the declaration? Or do I need to do something different to properly report (no US-citizen and CH-fiscal residence - in case ETF declaration might be linked to that)

Best,
Cap

6

If you buy accumulating ETF, you would need to calculate the tax liability using ICTAX.

But any tax advisor should be able to do it using list of transactions which degiro should provide in annual reports. All you need to know is when you bought , when you sold the ETF the year.

This is true also for IBKR.