ETF that has performed better in CHF

Investing / Portfolios
1

Hello everyone,

Since I want to invest further in Swiss francs.

Since I already have investments in USD and it seems to me that the gains are eroded by the unfavourable exchange rate.

I have made some comparisons of ETFs of stocks in CHF.

I find that the best ETF that has performed better in CHF in recent years is the iShares S&P 500 CHF Hedged ETF Acc compared for example to the following ETFs:

Vanguard FTSE All-World

UBS and Ishare SPI

UBS ETF SXI Real

…

What is your opinion?

Am I perhaps wrong?

Regards

CC

2

Operative words: “in recent years”.

The only returns expectations that interest me when choosing a passive ETF are those of the index it relies on (and even that doesn’t catch much of my attention). I classify every other parameter very broadly as either a matter of quality (full replication vs swap based vs others), taxes/fees (that can come with an insurance part, like currency hedging) and other risk metrics.

CHF hedged ETFs can perform better than unhedged in the future, or they may not. The market has expectations regarding the prospect of the CHF vs other currencies, those are the ones that hedging has to beat (the question is not necessarily “will the CHF get stronger vs, say, the USD” but “by how much will the CHF get stronger (or weaker) than, say, the USD and will that be a wider latitude than potential opposite moves that the CHF could have vs other currencies that impact the prospects of the companies held within the ETF”.

If my chosen investing method involves potentially incurring significant currency exchange fees, I’d probably try to use an accumulative ETF traded in CHF (distributed dividends come in the base currency of the fund, which is not necessarily the same as the currency of the share class). I may take the hit of the currency exchange fees if the accumulative shares in CHF of the ETF I intend to use are traded in low volumes and would incur a spread comparable or worse than the exchange fees.

3

Two suggestions

  1. Please compare apples to apples with respect to underlying exposure (comparing S&P 500 to World etf is not a fair comparison) . For example compare S&P 500 hedged vs unhedged to understand impact of hedging

  2. Have a look at this thread about hedged ETF. Please read the full thread and not just few comments

Last point, try to focus on future expected returns and not past realised returns. It’s tough to focus on future expected returns but it’s the only thing that matters

4 Likes