Received 200k EUR – Invest via Interactive Brokers (VT) or German Broker (VWCE)?

Investing / Others
1

Hi all,

TL;DR below.

I received €200,000 inheritance into my German bank EUR account due to my parents’ passing and I’m preparing to invest it long-term into one single global equity ETF — passive, diversified, buy & hold.

I’m weighing two practical options:

1. Keep the funds in Germany, use a German broker (e.g. my bank DKB) to invest in VWCE (Vanguard FTSE All-World UCITS ETF, accumulating, EUR-denominated)

2. Transfer the money to Interactive Brokers, convert to USD, and invest in VT (Vanguard Total World Stock ETF, USD-denominated, distributing)

Some personal context:

I’m 50 years old and I currently live in Switzerland (wife is little younger)

However, a large portion of my spending is in EUR, due to regular business travel

In 10–15 years, I may (or may not) retire in the Eurozone, so future expenses might be fully EUR (or may not be)

My goal is global diversification and long-term simplicity

Option 1: German Broker (VWCE – EUR)

:white_check_mark: Low TER (0.22%)

:white_check_mark: Accumulating — no dividend reinvestment hassle

:white_check_mark: No FX conversion costs

:white_check_mark: Matches my current EUR spending and possible future EUR-based retirement

:red_exclamation_mark: Some potential tax/reporting friction being a Swiss resident using a German broker

:red_exclamation_mark: EUR/CHF currency risk if I stay in CH permanently

Option 2: IB (VT – USD)

:white_check_mark: Broader global market exposure (VT includes small caps)

:white_check_mark: Very low fees and spreads at IB

:white_check_mark: Can convert EUR to USD at minimal cost

:white_check_mark: Full control over FX timing (convert now or later)

:white_check_mark: Matches IB’s strengths: flexibility and global access

:red_exclamation_mark: Distributing ETF = dividend taxation might get tricky (esp. in CH)

:red_exclamation_mark: USD exposure — not my spending currency today or possibly in retirement

My current thinking:

While I do live in Switzerland, my spending is EUR-heavy now, and could be entirely EUR later. That makes VWCE via a German broker the cleaner choice today — no currency conversion, accumulating ETF, aligned with my lifestyle.

That said, IB + VT gives me flexibility and access to broader exposure, but introduces USD exposure and dividend complications.

In summary, I very much prioritise simplicity over the pursuit of marginal returns.

-–

TL;DR:

I’ve got 200k EUR. Should I:

→ Invest in VWCE via a German broker (no FX risk today, clean accumulation)

→ Or invest in VT via Interactive Brokers (more flexibility, but USD exposure + dividend hassle)?

Who’s been in this boat — or jumped ship and regretted it?

Thanks for your input!

1 Like
2

Was discussed quiet a few times here: you are exposed to stocks, no matter in what currency they are traded.

Tax is probably the same because Switzerland calculates the dividend part on accumulating ETF.

No problem to get back US tax, DA-1 and done.
No problem at IB to automatically reinvest dividends.

So I would go IB for the cheaper cost.

11 Likes
3

Sorry for your loss.

In before the big heads coming to say that ETF currency doesn’t matter. If I were you I’d just plug it into the German broker.

Small caps in VT mean exactly zero, it shouldn’t be a consideration unless you tilt to small caps. Also, screw “developing/emerging” markets, if they were any good they’d have emerged by now, I wonder how much money has been lost because once in history emerging markets did something. I’d put it all on VEVE in EUR.

3 Likes
5

Since you need money in Euro, take a world ETF in Euro (which one does not really matter, as long as you stick to the known indices and known funds provider). Saves you some currency conversion.

For the broker, I would suggest a Swiss one or IBKR. German brokers might not be specifically intended for Swiss residents and do some tax at source if you are unlucky (which you can reclaim, but who wants the hassle ?)

I would not take an accumulating one. Distributing one is easier to handle (you have to pay dividend on accumulating funds as well ! But you have an “extra step” to find out how much it actually was. With a distributing one, just look at your statement - done)

1 Like
6

2 min too late :rofl:
Not a big head, and little to add. If you move to Euro-Zone later in life, you can still change broker or investment depending on the local tax or cost situation.

7 Likes
7

ETF currency does matter but not for a question of exposure:

In terms of risks, you’ll have exposure in both cases.

Investing in VWCE avoids conversion fees when buying / selling if you are using EUR, and for dividend reinvesting since it’s accumulating and done within the fund. And simplicity when working with EUR. So it’s a good choice.

1 Like
8

My condolences.

Otherwise it’s as @cubanpete_the_swiss says.

At the risk of starting a flame war …

Lump summing €200k into the VT these days is buying

  • 4.32% NVIDIA (€8640)
  • 4.1% Microsoft (€8200)
  • 3.17% Apple (€6340)
  • 2.33% Amazon (€4660)
  • 1.75% Meta (€3500)
  • 1.41% Broadcom (€2820)
  • 1.16% Google Class A (€2320)
  • 0.97% Taiwan Semiconductor Manufacturing (€1940)
  • 0.95% Google Class C (€1900)
  • 0.9% Tesla (€1800)

That’s 21.06% (€42120) of your €200k into your top 10 positions that you’ll buy via something like the VT.

The remaining 78.94% (€157880) will go into the remaining close to 10000 companies in the VT.

Make of this what you like, but I would at least dollar cost average into VT if I were you, maybe deploy €10k every month or so.[DCA]

Well, don’t get me started on this one …

Seems one wrench – “diversified” – might be enough for now to derail the topic … :wink:

:rofl:

Luckily, my head is just normal sized. Here’s a selfie I just took now:

Gemini_Generated_Image_2e25ig2e25ig2e25
Gemini_Generated_Image_2e25ig2e25ig2e251024×1024 67.5 KB

(the hat makes my head look bigger than it is)

(and the long ears don't really count for head size)

DCA   Historically statistically (with backtesting) suggests you’re (on average) better off with a lump sum investment, but psychologically it sucks if you contribute to the left tail in the distribution to that statistical outcome after you’ve lump sum deployed your 200k …

7 Likes
9

Traded. If you would pick the distributing class of the same fund, you would get the fund currency USD as dividend, but in this case the distinction is of no importance.

Sure, do it. Which exactly ETF you will pick is secondary, I would say.

1 Like
10

None that I see.

1 Like
11

Not at all, you just declare as an income what you actually get.

1 Like
12

Not from a Swiss perspective. Many here have an UK-based broker and no issues. You declare your income and assets and that’s it.
Check the German side, though. I understand they might withhold taxes for income and even capital gains, but you can likely register to be excluded as non-resident.

2 Likes
13

Thanks for the condolences and your opinions everyone.

The question remains unanswered in my head as half of you say bring the money to Switzerland (IB) and half of you say keep it in Germany.

Would it make any difference if I told you I definitely plan to retire outside Switzerland so my spending will definitely not be in CHF in the long run?

Again, my main goal is simplicity (less hassle with filing tax returns, reclaiming witholding tax every year etc.), I don’t care if after 10 years these 200k turn into 395k or 400k, that’s not important to me.

14

Interactive Brokers is a US company, as a Swiss resident you will get an account with their UK subsidiary. What “bring the money to Switzerland “?

2 Likes
15

Break it down:

  • world ETF, no hassle, for now and later: ucits accumulative

  • again, whether you buy it in CHF or EUR you’re buying the exact same thing and their relative performance will be tight to the currency-performance it’s denominated, resulting in exactly the same

  • however, you have EUR, and you want EUR later, so buying the product with EUR and selling it later to EUR avoids conversion fees. Choose EUR.

  • tax: any world ETF in whatever currency, whether it’s distributing or accumulating, at any broker will generate an income and while in Switzerland, you’ll be taxed on this income. You have two clicks to do at ICTax to get the values and report it. Avoid US ETF if you want simplicity for now and later without changing anything, UCITS is the answer again.

  • Broker: you may choose a Swiss broker (not IB, it’s not Swiss) that provides you with a tax statement ready for Switzerland for simplicity (you may still transfer EUR to switzerland and buy EUR product without converting to CHF along the way, country does not matter) and ensure there is no special treatment relative to broker residency/and yours. Also, broker’s country is not really related to what you buy (ETF in usd, chf or eur can be bought anywhere).

Otherwise if you go the UCITS Acc way as suggested, I guess it makes absolutely no difference where you buy it and tax reporting is easy in Switzerland with ICTax.

TL;dr: EUR/UCITS/Acc/wherever-you-want (it may as well be the country you are aiming to move to, or where you think the funds will be better/practical/safe long term, if not Switzerland).

  • fair warning: you may be asked a lot about compliance when you transfer funds at any broker, especially if you tick the inheritance as source of funds.
4 Likes
16

That’s the internet. This is a relatively small forum. In my opinion with a relatively good ratio of competence and usefulness per user or post. Still, opinions and priorities differ.

No.
As others said, one way or the other, the broker, the allocation of your portfolio or the currency it’s denominated in doesn’t matter much. And all of these are different things. And even for cash, the CHF is rather likely to appreciate further, but EUR would get you higher interest.

Continue with your current broker and strategy and just add to that. But that assumes you have those.

4 Likes
17

Of course, that’s true… Don’t know why I said that.. Maybe I thought it’s going to be easier to fill out Swiss tax return or something…

So in terms of simplicity, German broker vs IB, there’s no advantage to either when it comes to easier filing of tax returns and accounting for dividends in the tax return etc?

I really don’t know a lot…

18
  1. Transfer funds to German broker
  2. Buy, at once or in multiple steps, shares of VWCE IE00BK5BQT80
  3. This step is important: do nothing
  4. Every year report in your tax statement in Switzerland :

(Change the date to the correct year) and fill the number of shares in the table to get the values for wealth and income to report to tax office.

image
image2358×778 130 KB

6 Likes
19

So I don’t have to calculate the dividends myself because it’s an accumulating ETF? It’s not any more complicating compared to VT which is distributing ETF?

BTW, probably a dumb question, but I noticed in your link that the currency of the ETF is USD. I thought the currency of VWCE is EUR?

Do I gain anything by going with IB and VT except for marginal gains?

20

Nope. Accumulating enable you to have reinvested dividends while you are doing nothing => simplicity.

Tax-wise, it’s the same, same method, if you choose a UCITS ETF dis (not VT). Just fill in with the other ISIN.

This is what happens if you choose a distributing ETF: it distributes the income to your cash account, in USD (even if the ETF is denominated in EUR) => you get cash in USD, convert them to EUR, manual reinvestment of the dividend by buying new shares yourself => more operations, conversion fees, transaction fees => choose Acc with your criteria..

VT: add to that tax reporting complication if you want to optimize and recover some of it, tax assessment when in Germany (don’t know the consequences, but if not UCITS then more trouble, I guess), don’t choose VT with your criteria.

The currency it is bought / sold on markets is not the currency of the fund, i.e. what happens within. There it’s USD.

If you scroll down, you’ll see that this “USD ETF” is traded in EUR, GBP, USD, CHF at various market places. The product is an Irish UCITS USD fund in every case.

USD ETF is NOT to be confused with the currency you buy it, nor with a “US ETF” when we talk about VT, which relates to the fact VT is a US fund, managed in the US under US laws and rules.

image
image1179×1965 153 KB

Also not related to broker: you can buy something in EUR at Deutsche Börse from a Swiss broker.

The EUR currency is really helpful for you not to have to manage forex when doing transactions. It does not change anything to the product / product performance/product structure.

1 Like
21

Someone mentioned that IB offers automatic reinvestment of dividends which would make it equally simple as having an accumulating ETF?

I thought you can’t buy non-UCITS funds like VT in EU anyway?

Thank you very much everyone for taking the time to help a noob like me.