I’ve been researching the SGOV ETF, which focuses on short-term (0-3 month) Treasury bonds and currently offers a yield of over 5% annually. Observing its performance graph, it appears the price resets monthly after the dividend payout.
Given that dividends are taxed in Switzerland, I was wondering about the feasibility of the following approach:
- Buy SGOV on the 1st of the month (or shortly after the dividend payout when the price resets).
- Sell it before the end of the month, just before the next dividend payout, to avoid the Swiss dividend tax.
This would involve manually buying and selling each month, but if done through a platform like IBKR or another low-cost international broker, transaction fees should be minimal.
Does this logic hold up? Are there potential downsides or factors I might be overlooking? I understand this requires consistent effort, but purely from a tax-efficiency perspective, it seems like it might work.
Curious to hear your thoughts!