An additional advantage is the availability of accumulating ETFs, which might simplify your situation in the accumulation stage, especially if you have expensive trading fees.
Thanks a lot for your answers!
Yes, I forgot to mention that I aim at accumulating ETFs (exactly due to the transaction fees) unless I am strongly advised not to for any tax reason
So far I understood from the blogs, that if the ETF is listed in ICTAX list, I am not at risk that the capital gains will be a subject to withholding tax due to mix up with dividends?
However, I don’t know how the (discounted) fees at UBS compare between trades at different exchanges. Also, currency exchange is likely relatively expensive at UBS, which might favor CHF-traded ETFs.
Yes, transaction fees for SIX-traded instruments are lower. I also would get lower administration fees for UBS-issued ETFs but here I would be careful, I would rather invest in larger ETFs with more AUM.
Depending on the UBS fee structure, you should consider not investing too frequently. Once a quarter may be reasonable.
Here I did some math, and because of the employee discount and rather complicated fee matrix, the cheapest purchase for foreign exchange lands somewhere between 6-8k CHF (have to check that in practice still).
When it comes to dividends, I would favor the accumulating ETFs (to not have to pay the stamp duty and the transaction fee when re-investing them) but I am not totally opposed some distributing products.
This is something worth looking at, actually. I personally find the “danger” of smaller ETF closing overexaggerated.
In general I agree and wouldn’t necessarily avoid all smaller ETFs. But in my situation getting my salary from UBS, investing through UBS and in UBS products is a little bit too much putting-all-eggs-in-one-basket situation. And maybe there’s nothing to worry about but better safe than sorry
I could be interesting if you can invest in their mutual fund in spite of their ETF. You should check their funds, fees, etc.
Personaly, in your case, I think that I will privilege UBS ETF/Funds if you can have them at lower price in comparison with other exerternal ETF as Vanguard or Blackrock. Because you are entitled with them, you should prioritize the lower cost as much as possible. Also, they have some interesting ETF with lower TER too.
Maybe you could also invest in their Quality ETF as @San_Francisco is doing for USA and UE market
IE00BZ56SW52 WisdomTree Global Quality Dividend Growth UCITS ETF IE00BX7RRJ27 UBS ETF (IE) Factor MSCI USA Quality UCITS ETF (USD) (distributing only, AFAIK) LU1681041890 Amundi MSCI Europe Quality Factor UCITS ETF IE00BK5BQT80 Vanguard FTSE All-World UCITS ETF IE00BM67HK77 MSCI World Health Care UCITS ETF 1C
I’d argue no one „needs“ any other Europe-domiciled equity ETF. Unless you deliberately want to „bet“ on some specific country, region or sector (do keep in mind that the U.S. dominate World ETFs though).
Personally, I‘ve largely given up on Emerging Markets funds. Currency depreciation seems to mostly eat up your returns in local currencies/companies, China dominates most vanilla EM indices to the point that you’re not well-diversified, and many other countries‘ indices are dominated by just a handful of big financial service providers or energy/mining stocks.
It’s difficult to answer without knowing the fees applied, UBS products you can access to, as well as the margin on forex transactions.
If the margin is high, I would favor CHF ETF: 1) UBS products if you can invest in share classes with lower TER vs a standard Swiss investor 2) external ETF (i.e Vanguard, Ishares).
If the margin is low, I would invest in US ETF (as long as UBS allows you to invest in such products). Place your orders in order to minimize your fees (i.e. quarterly purchase).
A form W8-BEN will allow you to benefit from the tax treaty rate (to be checked internally within UBS)
Thanks, I am aware. I plan to consult a tax advisor couple of years before the expected retirement, once I have a better idea where I stand and where I would like to move to. A lot can change in between now and then
Welcome on the forum and good luck with your plan. Being financial literate, having a good saving rate and discipline are the key ingredients.
Personally, I suggest not to mention your current employer’s name so widely (few times in this thread and in other that I have just seen). I am usually not a internet control freak but it’s just better to avoid spread personal info on the web (this is a forum but all our comments appear on google search and etc).
Going back to your question. Also check custodian fees and price difference between UBS funds vs non UBS funds. UBS funds may have lower purchasing and custodian fees and may make more sense even at lower AUM.
Last suggestion: no need to overthink maximum cost reduction, stay the course and consistent investing are way more important than some more expensive funds.
This is applicable to all internal employees, so it doesn’t matter. Only external staff is exempt. People with real inside to trading information have even more restrictions on top of that.
Hi Steve, thanks for all your input and the warning
I don’t know how I could explain why I have to invest with UBS without disclosing that I am employed there But I did not share any sensitive information here that I feel needs protecting.
I am a UBS employee too and had exactly that problem one year ago. However, one of the exceptions for you to have an external brokerage account is if the account is part of your country of citizenship. So I did get an exception for this account I had in a Portuguese bank and am now allowed to trade through it.
I’m sorry to be very blunt but @portugalfire 's exception concerned dealing with a brokerage firm from your country of citizenship, so to use IBKR from a swiss place of residency while using that specific exception, one would need to be a citizen of the UK. I guess there are ways to become a UK citizen for those who aren’t already but I’m not sure the benefits are worth the trouble.
Depending on other citizenships, people may find ways to register to IBKR through their local entity if there is one, or have another choice of brokers available.
I would personally consider having to use UBS as a broker as part of the terms of my contract and put that in balance of my total compensation. Having restrictions linked to work contracts happens all the time: some need to live at less than 30 min than their working place, some have to have and use their own car, some have to do night and weekend shifts, etc. The way most people deal with it is to get compensated for it (and chances are the compensations offered by UBS aim to be competitive, so should take account of investing restrictions as a whole), rather than trying not to be subjected to those restrictions that are considered necessary for them to perform their job adequately.
I’m sorry to add that I find asking on an internet board rather than colleagues, our manager and/or compliance very naive and that doesn’t really reassure me as to the state of our banking industry…
I would like to add that using UBS services (which might be included into the compensation already and having advantage on prices of those services) is actually just a mini-optimisation on the scale a FIRE-seeking person is operating.
The most important part is actually to save 40%+ from our income and invest them into low-cost solutions, and the broker is not the most relevant part.
And otherwise, noone is forcing you to remain working at a certain employer, so stop being complainypants about it (to cite the namegiver of the movement).
I am not complaining, just seeking advice on possible optimization of the situation I am in. The comment on changing the employer was answered in my original post. Thanks!
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