Help me decide between VWRL or SWDA+EIMI


#1

Hey guys,

After a lot of research I am finally making the step (hopefully) towards an early retirement. I am just uncertain about which fund to go for and maybe you guys could give a suggestion? Anything is truly welcomed.

I am considering to put 80% into a fund and leave the other 20% in cash, which I might move into bonds at a much later stage if it makes sense.

My fund choices are:

VWRL: Vanguard FTSE All World UCITS ETF

or

SWDA: iShares Core MSCI World UCITS ETF USD (Acc) (90%)
+
EIMI: iShares Core MSCI Emerging Markets IMI UCITS ETF (10%)

I like VWRL because it is a single fund and contains emerging markets (perfect for the lazy investor). I don’t like that it is a distributing fund.

I prefer SWDA and EIMI since they are accumulating. But then I have two funds to maintain with a slight higher TER than VWRL.

All the funds have ESTV reporting, so my understanding is that tax should not be too much of an issue?

And just a quick background: In my early 30s, healthy pillar 2 and a maxed out pillar 3 with savings accumulating and doing absolutely nothing.


#2

Are you sure? SWDA has 0.20% and EIMI has 0.18%, while the UCITS version of the Vanguard one that you can get in Europe has 0.25%.

If you want it cheap you have to buy the US one, but there is a 60k limit or so if you don’t want to have problems with inheritance taxes when you die.

I personally have 75% in SWDA and 25% in EIMI.


#3

They wouldn’t have problems :slight_smile: (their heirs might have more paperwork tho).


#4

My bad, for some reason I thought the combined TER for them was 0.28%. I think I will go for SWDA and EIMI. I was also double checking the factsheets last night and I prefer it over VWRL.


#5

One thing to consider is the trading currency. VWRL is being traded in CHF while SWDA is traded in USD. If you’re at an expensive broker like me (hopefully changing soon) you will be facing currency-conversion fees of 0.5-1% each trade (one way, same for selling).


#6

For Swiss residents the limit is much higher. I’ve seen numbers between 5.5 million up to 11 million before you get taxed.


#7

Thats a very good point. So this then makes VWRL a better option? Purley based on cost.


#8

If you are with InteractiveBrokers a currency conversion costs 2.5$ , no matter how much you convert.


#9

@Double_A
Correct but this choice of funds hints to not being with IB.


#10

@DukkelWurst
That’s hard to say. I haven’t done the math, it’d depend on how much you buy / how big your stash is. Currency-conversion is a one-time fee while TER is a recurring fee. If you have a lot of money already the difference in TER might exceed the fee you will have to pay to buy USD with your CHF.


#11

I am planning on starting slowly just to get the hang of things. I’ll most probably invest every quarter. I’ll definitely consider the currency-conversion. Thanks for the heads up.