IBKR Money Market ETF

Investing / Others
1

FRANÇAIS

Bonjour!

Je souhaiterais commencer à investir mon argent (prévu pour des projets perso) à moyen terme (<10 ans) sur IBKR (où j’investis déjà massivement sur VT).

Les comptes épargnes suisses étant peu satisfaisants, j’ai cru comprendre que les ETF Money market USD ou EU étaient bien meilleurs, et plutôt sécuritaires avec peu de volatilité (jusqu’à 4-5% selon les années VS 1-1,5% en suisse max pour les comptes épargnes -caisse d’aubonne ils sont à 1,75% je crois…).

Je voudrais savoir si vous avez de bonnes recommandations pour des ETF de cette catégories et que pourraient m’offrir les meilleurs rendements à moindre frais! Et même si vous pensez que c’est une bonne idée..

Merci pour vos réponses! ———————————

ENGLISH

Hello!

I would like to start investing my money (intended for personal projects) over the medium term (<10 years) on IBKR (where I am already heavily invested in VT).

Swiss savings accounts being unsatisfactory, I understand that USD or EU Money Market ETFs are much better and relatively safe with low volatility.

I would like to know if you have good recommendations for ETFs in this category that could offer the best returns with low fees!

Thank you for your responses!

2

You’ll be trading higher taxable return for fx volatility (and likely depreciation).

I don’t think it makes sense, if you want risk free return in chf, 1% is already great if you can find it.

EURCHF and USDCHF can be very volatile, and both EUR and USD would likely depreciate by an amount similar to the interest rate difference (if interest rate parity holds somewhat).

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4

In another thread I have been surprised by the bad performance of a fund or ETF that was hedging its USD exposure to CHF. Now, for ten years that was very bad business; the Dollar lost 10% while the interest difference over that time (10 years) was multiples of that. Even considering tax you would have lost hedging in CHF even the CHF did gain. A reversed carry trade (short CHF - long USD) would have paid out nice positive return.

I think the poster just wants to park his money somewhere, but in CHF he risks negative return. So he thinks about a carry trade with many years of holding. For the last 10 years that would have been good business with USD long, even the CHF did gain.

But then again we speak about a trade with very low possible performance (interest diff minus CHF appreciation) and quiet some risk (USD loses lots).

Personally to park CHF I would chose a CHF Fund, even at the risk of negative returns. To bet on the interest difference being higher than the CHF appreciation is not my pair of shoes. I prefer risks with higher possible performance outcome.

5

You can currently still get 1% per annum from a 10-year medium-term note, 0.9% per annum for a 5-year note. That’s a return in CHF. I don’t know of a money market fund that’s delivered a better return in CHF in any recent period of history. And you get Swiss bank depositor protection and tax simplicity.

But of course, a medium-term note is fixed, while a money market fund could hypothetically give you much higher returns if something in the global currency order were to radically change. And, of course, you can sell money market fund shares anytime, so they are more suitable if you don’t know how long the money will sit. But a savings account is arguably more suitable, and there are still banks paying more than 0.5% per annum.

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