Optimizing ETFs investments

Investing / Others
57

OK, so I put together a little comparison for investing into world ETFs.

Scenarios (CHF)
For 25 years:

  1. 1k monthly
  2. 100k lump sum
  3. 100k lump sum + 1k monthly
  4. 250k lump sum + 2.5k monthly

These amounts include fees, because these are the amounts of money that are put aside for investing, not more, not less, so fees need to be paid from those sums. Example: if broker X’s fees are CHF 10 and CHF 50 with broker Y, a monthly 1k would result in an actual investment (i.e. invested in ETFs) of 990 with broker X and 950 with broker Y.

If there is a particular scenario you want me to add, feel free to ask, it’s very quick to add a new one.

Brokers

  • IBKR: cheapest international broker. I chose the fixed price plan to make things simpler, even though it is a bit more expensive. But it doesn’t really matter, as – spoiler alert – IBKR still wins :wink:
  • Swissquote: Swiss broker that allows for US ETFs
  • Postfinance: only (?) other Swiss broker that allows for US ETFs
  • neon: cheapest (i.e. free) broker for FWRA through their savings plan
  • finpension: cheapest Swiss robo-advisor, has reclaimable US WHT

Portfolios

  • 62% VTI + 38% VXUS (CRSP US Total Market + FTSE Global All Cap ex US)
  • VT (FTSE Global All Cap)
  • FWRA (cheapest European FTSE All-World)
  • finpension: Global 100, their 100% stocks portfolio (note that 1% of the deposited amount is kept as cash with 0% interest)

Method

  • A yearly return of 7% is assumed and this is before TER, lost US WHT and income tax.
  • 1.5% dividend yield (average of the last 4 years for S&P 500) on US stocks is assumed. FWRA has 62% US stocks and the non-reclaimable 15% WHT is deducted from the 7% return.
  • For IBKR fees that are based on number of shares, I used current prices for VT, VTI, VXUS and CHF/USD.
  • The currency conversion of the respective broker is used (no Revolut/Wise etc. detours).
  • Stamp duties (0.15%) are deducted from any investments with Swiss brokers.
  • Income taxes on dividends are considered with a marginal tax rate of 30%.

=== RESULTS ===

1k monthly after 25 years

VTI & VXUS (IBKR) VTI & VXUS (SQ) VTI & VXUS (PF) VT (IBKR) VT (SQ) VT (PF) FWRA (IBKR) FWRA (SQ) FWRA (PF) FWRA (neon) fin-pension
719’862 688’821 683’936 718’372 683’755 685’977 697’370 678’922 689’431 699’823 673’861
-31’041 -35’926 -1’490 -36’107 -33’885 -22’492 -40’940 -30’431 -20’039 -46’001
-4.3% -5.0% -0.2% -5.0% -4.7% -3.1% -5.7% -4.2% -2.8% -6.4%

.
100k lump sum after 25 years

VTI & VXUS (IBKR) VTI & VXUS (SQ) VTI & VXUS (PF) VT (IBKR) VT (SQ) VT (PF) FWRA (IBKR) FWRA (SQ) FWRA (PF) FWRA (neon) fin-pension
476’298 444’220 458’477 473’953 442’671 456’342 454’497 429’448 444’468 451’772 427’671
-32’078 -17’821 -2’345 -33’627 -19’956 -21’801 -46’850 -31’830 -24’526 -48’627
-6.7% -3.7% -0.5% -7.1% -4.2% -4.6% -9.8% -6.7% -5.1% -10.2%

.
100k lump sum + 1k monthly after 25 years

VTI & VXUS (IBKR) VTI & VXUS (SQ) VTI & VXUS (PF) VT (IBKR) VT (SQ) VT (PF) FWRA (IBKR) FWRA (SQ) FWRA (PF) FWRA (neon) fin-pension
1’196’160 1’158’511 1’151’536 1’192’325 1’151’770 1’151’397 1’151’867 1’132’910 1’142’734 1’151’595 1’101’532
-37’649 -44’624 -3’835 -44’389 -44’763 -44’293 -63’249 -53’426 -44’564 -94’628
-3.1% -3.7% -0.3% -3.7% -3.7% -3.7% -5.3% -4.5% -3.7% -7.9%

.
250k lump sum + 2.5k monthly after 25 years

VTI & VXUS (IBKR) VTI & VXUS (SQ) VTI & VXUS (PF) VT (IBKR) VT (SQ) VT (PF) FWRA (IBKR) FWRA (SQ) FWRA (PF) FWRA (neon) fin-pension
2’992’564 2’917’648 2’900’762 2’981’891 2’915’129 2’912’653 2’884’924 2’863’709 2’867’298 2’878’988 2’753’830
-74’915 -91’802 -10’673 -77’435 -79’911 -107’639 -128’855 -125’266 -113’576 -238’734
-2.5% -3.1% -0.4% -2.6% -2.7% -3.6% -4.3% -4.2% -3.8% -8.0%

.
Please let me know if I missed something or made wrong/nonsensical assumptions.

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