There is enough choice of competitive CHF-traded funds. Therefore I see no reason of handling several currencies or bothering with potential currency exchange fees.
Almost all CHF-traded products are listed in Zürich, and some in Bern. A tiny fraction is also listed abroad. Meaning that if I want to trade in CHF, Zürich is my exchange of choice.
Note that if you also want to avoid dealing with USD dividends, the fund should be accumulating (most world ETF are denominated in USD, regardless of the currency they’re trading in).
Ukraine is a very minor economy in the grand scheme of things
So is Russia’s stock market- it wasn’t even a „developed" market as far as the index providers (e.g. MSCI) are concerned, accounting for only a fraction of Taiwan’s share in MSCI EM
More crucially, the country didn’t stop to export oil, continuing selling even to EU members states
Stock markets reacted with panic selling and almost instant double-digit losses.
Insider trading, cronyism or even fascism aren’t necessarily bad for the economy. Neither is a putsch, if putschists support a pro-business president with economic laissez-faire.
Imposing a 50% on the - by far - single biggest stock market, accounting fir more thantwo thirds of the world’s market cap though, or making that uninvestable? Maybe the rest ofthe world will find ways around it and adapt. Maybe they’ll just swallow it? I don’t know.
I agree though that I’d rather invest somewhere else entirely than just change my broker and picking different derivatives (on the affected stocks), if that was my true concern.
Exactly. Furthermore, the UK is systematically weakening MiFID II and Solvency II, and not missing any opportunity to deregulate the financial sector (Edinburgh Reforms, Financial Services and Markets Act, etc.). I am fairly certain that my money would be better protected in the EU.
Some jurisdictions are becoming utterly unpredictable. Some others seem fairly stable, and keen to keep enforcing a rules-based order.
I don’t want to ignore the new real, structural risks. That would be stupid.
While I cannot entirely predict or mitigate them, I can try to implement some changes, progressively removing the most obvious vulnerabilities.
A good example is tax evasion: it is still possible, with skill and motivation, to evade tax. However, you cannot just walk from Genève Cornavin to Hôtel des Postes with a suitcase full of cash, deposit it, and casually take your train back to France. I am old enough to remember a time where it was perfectly common.
I know I can’t mitigate all risks. But I can maybe close the doors that are wide open.
The obvious example being the Estate Tax. If the US reneges on the double-taxation treaty tomorrow to put pressure on our country, US-situs assets (in our case, US-domiciled funds) will be taxed while IE-domiciled funds will not. Currently, the tax rate can reach 40% but it can also get worse, of course.
I cannot imagine not being invested in the economic powerhouse of our time, that represents two-thirds of worldwide liquidity.
Even the and aren’t going to (can’t) do it literally tomorrow. And with regard to the estate tax, as long as you haven’t passed away, you can reallocate your portfolio after the fact. Without triggering early capital gains tax, as in other jurisdictions.
Most people are not healthy and cognizant at the end of their lives.
If a car hits you tomorrow, you might very well spend long enough in coma for Greenland to become a US state. Your heirs might or might not have the powers and knowledge to act effectively on your name.
Think of the plot of Goodbye Lenin.
The lady took what seemed like perfectly sensible financial decisions, but the world changed during her coma, and said decisions made her life savings worthless.
I don’t really get why people are so hung up on these US estate taxes. Just buy the US ETFs on IBKR and then transfer them to a Swiss broker — done.
Sure, that only works as long as there’s no proper alternative to VT. The new Xtrackers ALLW doesn’t have small caps, and the upcoming Vanguard UCITS Global All-Cap ETF (the actual VT equivalent) is expected to come in at around 0.19% TER.
VT will probably stay the go-to solution for a while longer. And if you’re really paranoid about the estate tax, just move as much as possible over to a Swiss bank/broker like I mentioned.
The only real UCITS one-ETF alternative to VT will be the new product from Vanguard for expected 0.19%.
Do Swiss brokers release US equity to the heirs without a transfer certificate from the IRS? Can we know this for sure that it is so also in the future?
There’s no such thing as absolute safety, even with UCITS products, as long as the US holds all the leverage and can freeze assets or impose sanctions pretty much wherever they want.
Honestly, I think it’s kind of an illusion to believe US ETFs are inherently less safe. The Americans aren’t just going to sit back and let hundreds of billions in assets get moved out of their sphere of influence. And even if some of it does get shifted around, at the end of the day it still ends up in the US financial system anyway — just not necessarily through US-domiciled issuers.
If you really want maximum safety, you’d probably need to spread your money across multiple brokers in different countries with ETFs from completely different issuers. Personally, I don’t think that’s practical for most people.
My point was not about the safety of U.S.-issued vehicles like VT. It was about estate settlement.
My wife is not interested in investing, and I assume this is quite typical. If I die while holding U.S. equities at IBKR, she would need to complete U.S. paperwork and potentially wait years for an IRS transfer certificate. IBKR once told me that they may release the assets earlier if the paperwork has been submitted to the IRS by a certified tax adviser, but that is not a legal guarantee.
There is a possibility that a non-U.S. broker such as Saxo may not require an IRS transfer certificate – I had the impression that you were hinting at this. The thing is, I would prefer to know for sure. Otherwise, paying around 30 bps more in TER and accepting the additional Level 1 tax leakage of a UCITS fund seems like a reasonable insurance cost.
No, the Swiss broker or bank will completely wash their hands of it. At the end of the day, you’re the one responsible (or your heirs), not them. Whether you actually pay those US taxes or not doesn’t really matter to anyone - except the IRS, obviously.
I honestly can’t imagine that a big chunk of non-US shareholders are properly reporting and paying US estate tax on significant holdings. How many people even hold meaningful amounts of US stocks outside the US?
I’m not telling anyone to evade taxes, but let’s be real - I have my doubts about how much of this is actually being declared and paid.
I’ve already told my girlfriend to move everything over to a Swiss broker if something happens to me. And if I get old and don’t die in some random accident, I’ll probably do the transfer myself while I’m still around. Who knows what the tax situation will look like by then - maybe Australian ETFs will suddenly make the most sense.
It’s one of those topics where opinions are pretty divided. My personal view is this: if someone really wants to minimize risk today, the cleanest setup is an Ireland-domiciled ETF with a Swiss broker. But then, to be consistent, you’d also have to accept not investing in the US market at all.
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