Hi all, new member here.
I have inherited a decent sum of cash and want to invest it into VEVE/VFEM over the next year. As I don’t feel confortable with a foreign broker holding basically all my net worth I want to hold my funds at SQ, however the trading fees and stamp tax add up quickly especially with non-CH listed ETFs. I’m okay with the SQ custody fees as they’re capped at 200 CHF and since they removed the 2 CHF fee on outgoing transactions their predatory foreign exchange fee doesn’t bother me either.
So long story short, I want to assess how feasible or foolish this strategy is:
- Send cash to Degiro.
- Buy VEVE and VFEM on SIX. This should cost 5€ per transaction.
- Transfer the shares to SQ, according to Degiro this is a 10€ flat fee.
Repeat until fully invested.
Am I missing anything? I’m aware that this is basically stamp tax evasion, however there is nothing illegal about using a foreign broker to circumvent stamp tax, correct?
Thanks in advance.
FIVE EUROS as transaction fee? Jesus Christ, why not taking an equivalent in USD buying it on IBRK and transferring after each 100k asset to SQ?
Btw, the shares you buy with IBRK are stored at SIX in Zurich. Same for SQ. So it doesn‘t matter, if IBRK goes bust (who is by the way over 50 years on the market. How long is SQ on the market?).
In my eyes, your strategy is not practicable and too complicated.
Share transfers can take a while and don’t seem to be fully automated, at least in some cases. Statements across brokers can also get confusing if e.g. dividend payments happen concurrently with the transfer (there shouldn’t be a real risk of losing anything but still). I would transfer all shares in one go after completing your investment (or maybe something like once a year if you’re planning to DCA over a long period).
IKBRs fees are actually higher than Degiro when using SIX. IKBR is dirt cheap when using USD on the NYSE, but for European exchanges Degiro is cheaper. Degiro has higher forex fees tho.
Don‘t feel comfortable holding your shares with a broker abroad - but comfortable enough to have a cheapest-ass broker do repeat cross-border securities transfers?
Let’s get the popcorn .
Quite a strange approach. I assume that one of those two brokers would close your account quite soon anyway. Transferring shares is not meant to be a regular exercise.
This is Degiro fee. External fees are coming on top.
I agree with others that there is no reason of being afraid investing with Degiro or IB. But if you feel uncomfortable, it’s your money.
If you buy everything in one go, the fee you pay at Swissquote is more or less reasonable. Note that if you have more than one million, you can invest directly with Vanguard Ireland, and for ishares Ireland the limit might be 500k, not sure.
Furthermore, there are index funds from Swisscanto and CS, custodied in Switzerland.
Its only Degiro fees. At the top, you have the custodians fees. In 2019, the fees were the following when i wanted to transfer out my positions from Degiro.
Les frais de transfert sortant pour des positions cotés sont de 18€ par ligne sur Euronext Amsterdam, 56€ par ligne sur le Nasdaq et NYSE, 78€ par ligne sur les places boursières Suisses et 54€ par ligne pour le LSE.
It was cheaper to sell, transfer the cash and repurchase.
Thanks for sharing, this is exactly what I was missing. So judging from answers in this thread, the approach is indeed foolish and I won’t pursue it.
I’m a big fan of Ben’s! Yes I’ve seen this video many times, so I’m aware that lump sum beats DCA 2/3 times. But that’s like saying 100% stocks is always the ideal portfolio because it has the highest expected return. Yes, but this sort of oversimplifies things and ignores behavioral aspects of investing. DCA is a risk aversion strategy, so of course the expected returns are lower, but if it helps people get into the market that’s still way better than sitting on the sidelines waiting for the “best time” to invest.