Dear all, I am product manager, interviewing at UBS in Ticino, and one of the things I heard is that you can’t have, for instance an interactive brokers account, due to legal complicance .i.e. avoid insider trading? Is there any mustachian ubs/credit suisse employee that can shed some light on how they buy index funds or if they had to stop? Does UBS itself offer the possibily to buy ETFs like VTI, without scandelous fees?
Thank you so much in advance!
All employees that work for UBS Switzerland AG need to close all brokerage accounts and consolidate everything to the UBS custody account.
You can buy VTI, but it‘s not cheap:
Alternative is to use the fund account which has no yearly custody account fee, no FX change (as the funds are in CHF) and no buying fee. You can use index funds to replicate VT/VTI with ~0.20% TER.
Which funds are these? Are they CH domicile or IE? Just wondering if they are competitive
If you own Bitcoin with a hardware wallet, it’s time for a boating accident.
The bank, where I will start soon, allows to have/trade crypto external since they do not provide (yet) trading options.
Moreover, the same bank did allow having the securities at an external custody account. Recently, all employees were forced to transfer them to the bank (at least 0% custody fees but general CHF 40 per trade, which means a shift from monthly to bi-monthly investments for me). Could be worse, so I will continue with VTI there.
Not sure, if this has something to do with Basel III, but could be.
Valor: 35655041 (for replacing VTI)
Leaving a link to this topic here:
Thanks.
I think this one I knew already. But this actually has disadvantage because of 30% unrecoverable WHT vs IE domicile (15% unrecoverable WHT) as well as over US domicile (0% unrecoverable)
I thought there was something else that I didn’t know.
Quick question -: you said these funds don’t have custody fee. Is it only for employees or in general custody fees of UBS is free for UBS funds?
Unrecoverable? In DA-1 there are two sections, the so called “Beantragte ausl.
Quellensteuer” and the “Steuerrückbehalt USA” - for each of them you would put in the missing 15%.
You should get in the following year a part back in cash and a part should be deducted from your taxes directly.
But please, correct me, if I am wrong.
Edit: scroll down to “Scenario 4”: Chapter 4 — Part 2: Withholding taxes on dividends received, concrete examples
You can fill out RUS + DA-1 to get everything back as far as I know.
Only for employees. Customers pay 0.20% yearly fees + 1% buy fees.
Wait what? If you could get WHT from US dividends back so easily with Swiss ETFs, why is the default recommendation to buy US ETFs like VTI or VT?
It’s a swiss only fund, not an ETF. Afaik that’s ok.
Thanks Cortana you rock! I am quite a noob but wanted to start investing in VT/VTI.
What is this fund vs brokerage account? What is the disadvantage of this approach? Is it only the 0.2% TER? If yes, how does TER impact my yearly agains? Probably minimal impact right?
And what index funds you advise for replicating VT/VTI? Why not buy them directly? Are they not available? Or its because of the no FX option is available?
Also back to the first approach, it seems is not that scandelous. I value simplicity vs penny pinching, so great news that VTI is available! I think if I do 1 monthly buy of considerate amount, the 40chf fee dilutes and it would be so simple.
Let’s not forget the Swiss stamp duty at the top (exemptions and various rates apply depending on the financial instruments)
DA-1 form is for stocks, funds or ETFs which has foreign domicile. But the fund mentioned here by Cortana is CH domicile fund. There isn’t any relevance of DA-1
I am not tax expert so I might mess up the nomenclature. But there are two different taxes for CH domicile funds
Let’s say MSCI USA generates 100 USD dividend. UBS fund will only receive 70 USD and 30 USD will be deducted at source (30% treaty rate). Then UBS fund owner , a Swiss resident will get 70 x 0.65 = 45,5 USD and 24.5 USD will be tax deducted at source by Swiss broker.
While filing Swiss tax return, one can get credit for 24.5 USD. But the 30 USD withheld in USA will not be recovered.
This is what I have understood and that’s why I was a bit surprised that there was a mention to replicate VTI using CH domicile fund.
Some months back I checked this with UBS fund adviser and at first they said that they can recover the 30 USD on behalf of unit holders but eventually they could not confirm and said “we don’t give tax guidance”
Probably easy to check for anyone holding it at UBS, what does the end of year tax form say? If it lists the withholding amounts, split as 15+15%, I’m fairly sure you can claim them.
You can check ICTax 2023 for CH0356550415. It lists the dividend with Swiss VSt., as expected from a CH-domiciled fund. DA-1 doesn’t apply to that, of course (ignoring the possibility of what finpension Invest attempts to do).
And the gross dividend of the fund (before Swiss VSt. deduction) is a meager 0.90% based on ICTax data, compared to VTI’s 1.52%. That roughly lines up with a 30% US WHT (and higher TER).
Another data point is the fact sheet. It trails the MSCI USA net div. reinv. benchmark by 0.23% p.a. over the last 5 years, which is very close to the 0.22% TER. The MSCI USA net div. reinv. index is based on 30% US WHT.
Buying VTI on UBS brokerage account will incur following fees
Buying UBS USA Fund (CH domicile) will include
For tax advantages / disadvantages, you need to investigate but I think there would be additional tax loss with fund option.
So you should do an all in cost analysis to decide. But I am sure UBS will inform you about all this with onboarding 
Ah, sorry for the misunderstanding, I was talking about VTI 
But yes, it‘s a different approach for the fund.