Tax optimisation for ETF investing [2024]

[Dr.PI]

I find such calculations flawed. Now I am talking from the Swiss investor prospective. It assumes a reinvestment of gross dividend for US ETF, which is not attainable. There are always some tax drag that this tool can’t take into account.

VUSA vs. VOO - 10 year performance comparison

Well it looks not so simple. After I looked at VOO vs. VUSD as it was suggested by @Bojack , there is hardly any difference between their prices. Probably there is a problem with the currency recalculation. Difference in market closing time can also affect closing prices (which are not NAVs) that we are looking at. And after I was thinking about it, it started to make sense. Both funds track the same index, so more or less the same basket of stocks. If both funds would perfectly replicate the …

A bit more reasonable comparison, from my point of view, would be this:

1.5% dividend yield, 25% marginal tax rate, US WHT fully recovered

Post tax dividend US ETF:
D_N = 1.5%*0.75 = 1.125%
0.375% lost to taxes.

Post tax dividend IE ETF:
D_N = 1.5%*0.85*0.75 = 0.956%
0.545% lost to taxes.

Taxwise, US ETF is 0.17% p.a. better.

Add a higher TER, and we come to more or less the same number that you have obtained .

Splitting the world: creating tax-advantaged global stocks portfolio using funds in 3a account

I was thinking about updating this post, but decided not to. Too many variables that affect total investment costs. Instead I decided to outline what I think is a right way to calculate the total investment costs for an ETF. As a Swiss investor, one is only taxed on dividends, and namely up to 3 times. Let’s consider the whole process. All companies included in a fund are paying out dividends, which all together make gross dividend yield (in %) D_G. The gross dividend yield of various baskets …