I use some pictet MMFs, there’s a 5 CHF transaction fee so depends how long you plan on using it.
(and I heard you can’t do frequent buy/sell, if you sell you can’t buy again for some time – maybe one month?)
Same here, I currently park my short term liquidity in “Pictet CH-Short-Term Money Market CHF”. I followed the holdings of quite a few funds for some time, this was the most convincing to me (a lot of SNB bills and hedged foreign government bonds, whereas others invest heavily in corporate bonds).
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I was looking for something more liquid which I could buy/sell daily if needed.
May I asked, where you bought it? Swissquote?
IBKR (20 characters)
I read the wealth of information you posted to take exposure to CHF. I want to invest with a multi year horizon 100k CHF in a fixed income product with short duration. I noted you started your journey a year ago. Can you recommend some ISIN I can use via Interactive Brokers (probably LU-ISIN) that come as your best pick in terms of return/fee ratio ? Thanks in advance
Hi, I wanted to ask you as you started your research a while ago. Do you still recommend Pictet CH-Short-Term Money Market CHF as your best pick to build a CHF exposure and reduce my allocation to EUR ? Thanks for the heads up !
I’ve been using some Pictet MMF, but tax handling doesn’t look very favorable (it looks like the taxable income is quite a bit higher than the actual growth), so I’m thinking about doing things differently.
I still have a relatively large position in it, but my situation is a bit special, as I hold these funds in an LLC, resulting in some different considerations (taxation of capital gains / losses & dividends, many special offers from banks not available, etc…). For a private investor, MMFs are not that ideal, because they distribute all proceeds once a year (which reduces the fund value by this amount). This means in an extreme case that if you invest 100k before the dividend date, you will receive 1’600 Fr. in interest (taxable) and the fund value will decrease by the same amount (which you cannot claim as a capital loss). So you pay taxes on 1’600 Fr., although you earned nothing.
[Technically, you can avoid this by selling just before the dividend date and buying back directly afterwards, but I am not sure how legal this is, because you then pay no taxes at all]
For 100k as a private investor, I would recommend a savings account (WIR, Cembra, willBe, or Radicant)
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I’ve been trying to figure this out. I tried asking chatgpt, but my take away was that it wasn’t technically illegal. I find that very hard to believe though since selling and buying to avoid the dividend would be such an easy way to avoid paying taxes.
Can anyone chime in on this?
My assumption is that it is “Steuerumgehung”: Steuerumgehung | Schweizer Recht verständlich erklärt | lexwiki.ch |
It fulfils all three conditions (selling and buying one day afterwards is weird and only explainable with the tax saving and it actually results in a tax saving). So it is not really illegal, but the tax authorities will probably make you pay taxes on the interest nevertheless.
This article agrees that systematically selling stocks right before the dividend date is “Steuerumgehung”
Verkauft beispielsweise eine Privatperson Aktien vor dem Dividendenstichtag, vermeidet sie einen einkommenssteuerbaren Dividendenertrag. Dies ist eine erlaubte Steuereinsparung. Macht sie dies jedoch systematisch, liegt eine Steuerumgehung vor.
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‘example, if a private individual sells shares before the dividend record date, they avoid income taxable dividend income. This is a permitted tax saving. However, if it does this systematically, it is tax avoidance.’
Weird that it still says that is permitted. What is the definition of systematically? For example the CHF MMF is a yearly dividend. Would selling it 2 weeks before and buying 2 weeks post, once a year be considered systematically?
How about doing it once every couple of years? Or only the first year when you enter the MMF, and are not aligned with the dividend payment (to avoid paying taxes on dividends which you didn’t ‘earn’).
You could rotate between fund with different dividend dates.