Most cost-efficient European ETF

Buy VWRA instead of VWRL.

(Since you are, if I’m not mistaken, also an IBKR customer, you can exchange currency through them)

Might as well be buying VWRD. If VWRA would become available in CHF, then it would become a real solution. I wonder if ICTax has numbers for VWRA (since it’s a quite new ETF).

The ETF is ESTV registered and data were published for 2020.

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V3AA seems to be, alternatively

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Yes, to my knowledge it’s the only global accumulating fund traded in CHF. For people using a Swiss broker like Swissquote, it’s the cheapest option to avoid exchange fees.

I have done an analysis recently. I can confirm that V3AA is the cheapest European ETFs on swiss brokers to track the global market.

  • Traded in CHF (you avoid exchange fee)
  • Traded on the SIX market (cheaper trading fees as foreign market)
  • Accumulating (you don’t need to pay to reinvest the dividends and you avoid exchange fees on the dividends as dividends are distributed in USD)
  • The TER is 0.24% which is quite low
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This is correct, but: for long term investment recurring fees (TER + taxes on dividends + custody fees) are more important than fixed costs incurred when buying. So even 1% currency exchange fee would be acceptable, but there are also ways to push it down to 0.5% and lower.

Furthermore, the most tax-effective geographically-balanced investment strategy for Swiss investors seems to be: keep only US exposure in taxable account and gain exposure to the rest of the world market via 3a index funds.

You can invest in something like VUSA or any MSCI USA ETF (Irish or US) with a Swiss broker. There are brokers with reasonable fees. You can also go to a European broker, get lower fees and a wider choice of ETFs. You would have to pre-exchange your CHF to EUR. Or you can go to IB, but you probably know this story.

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Note that I believe in the relevance of minuscule difference in TER anyway, but…

Why is it cheaper than IE00B6R52259?

  • Trading as SSAC in CHF on SIX
  • Accumulating
  • 0.20% TER

Are you sure about SIX? I see USD at SIX. I saw some ETFs are described as being traded on Bern Exchange in CHF, but I have no idea how to buy anything from there. And what are their spreads.

This one I find kind of weird, has other ETFs such as"ISH MSCI CHINA A ETF USD ACC" as holdings. Another level of fees?

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Oops, USD indeed.

20

Regarding V3AA, here’s what the FTSE index does:

The Index Series can include negative screens in three product categories and two conduct categories. Individual indexes within the series may only apply a subset of the screening categories.

The product-related screening category covers:

  • Non-Renewable Energy (Fossil Fuel and Nuclear Power)
  • Vice Products (Adult Entertainment, Alcohol, Gambling and Tobacco)
  • Weapons (Chemical & Biological Weapons, Cluster Munitions, Anti-Personnel Landmines, Nuclear Weapons, Conventional Military Weapons and Civilian Firearms)

The conduct-related screening category covers:

  • Controversies (based on the UN Global Compact Principles)
  • Diversity practices

Is this really what we should be investing in? I don’t know, maybe it makes sense to exclude oil, weapons and drugs. But diversity? Seems quite hard to define. For example, If you’re a coal mine and only hire men, you surely lack diversity. But I don’t think it’s beneficial to include more women in coal mines?

@Evan I guess you invest in this kind of ETF?

Diversity for FTSE Rusell refers to: “Companies are assessed on Board diversity and equal opportunities practices.”
A more diversify board could offer better performances for the whole company?

It’s only one criteria. The impact should be small

I mean, I’m open to be convinced. It’s a separate discussion if investing in ESG funds actually makes a difference. I buy stock from another holder of that stock. So if many people stop buying stock from non-ESG companies, their price will drop. But the stock will be picked up by others, who will see higher returns. And a separate point is, if ESG strategy could hurt performance, or maybe it could actually help it? Maybe it’s a naive view, but in a very long perspective, if the number of socially/environmentally/wellbeing aware people rises, there will be more and more pressure to reduce army size, pollution, drug consumption. These companies could have poor long term perspectives, not because some investors ignore them, but because customers will.

I guess it’s a broad picture: I doubt pressure on weapon producers or addictive products sellers would come from customers, and some may be protected from negative legislative changes (there again, weapon producers come to mind) though some may have increased risk of higher regulation/more restrictive laws and loss of customer base if there’s a growing consensus in society (carbon emitters come to mind).

On the investors side, having less interest in the stock should take its price lower. The company would then have a harder time to finance itself through potential new stocks emissions, or to attract executives with attractive stocks compensations. If the desire to stop financing these companies becomes mainstream, some lenders may apply more restrictive conditions too, making financing as a whole more difficult for the company.

If we believe there should be pressure applied on those companies to get them to adopt what we would consider better practices - or to weaken them against more pallatable competitors - then every drop counts. I’m not a big fan of the ESG criteria myself so I leave that fight to others.

What do you guys say about SPDR® MSCI ACWI UCITS ETF, ticker ACWI?

Some comparison between ACWI & V3AA:

  • both are accumulating
  • both are traded in CHF
  • ACWI is significantly bigger, $3’184 million vs $82 million
  • ACWI has higher TER, 0.40% vs 0.24%
  • ACWI has ca. 3’000 constituents vs ca. 8’000

The V3AA wins on most fronts, the ACWI is just much older and much bigger. $82 million means you’re always trading with the market maker, right?

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V3AA is quite new. it was launched in April 2021. For the European market, 82 million in 8 months is quite good. There is also a distributing version: V3AL with 62 million.
Vanguard launches a few ETFs each year and rarely close them.

ACWI is also a good option, but the TER is high. In the long run, Vanguard is more likely to reduce the fees as they are a mutual/nonprofit company. Blackrock is quoted on the stock market and has shareholders.

The spread of ACWI is 0.15% vs V3AA 0.3327%

Yes, it’s quite likely

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Will it be of a good option to mix ETFs emitters on order to mitigate risk ?
If you already own a Vanguard, I will pick the SPDR

Unless you’re managing billions. It makes no sense.

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