Similar here - not touching EUR. Yes, it is kinda stock (not-)picking, but I sleep much better…
I’m not a big fan (to put it mildly) of European socialdemocratic model and the economic stagnation and mountains of public debt it produces, but nevertheless I’m invested in Europe. Euro arena though is still $15 trillion economy (Switzerland is $0.7, China $12 and US $19 trillion by comparison). And it is projected that it will grow a bit in coming years, so I’d rather catch some of this growth by a market-cap exposure. Maybe I’d underweight Europe (and perhaps Japan) a bit, I’d certainly not ditch it altogether.
thanks for all the advice guys!
I am still looking for a EUR based ETF in EUR. I am basically looking for an ETF:
- Currency and based in: an ETF that is in EUR (meaning i can buy it from an European Stock exchange in EUR). Not sure about taxes. I am currently a tax resident in Switzerland but that might change once I retire in Italy or Austria with age 40+
- Portfolio: includes Swiss and EU (Excluding UK) companies (Large & Mid Cap)
- Distributing
- Is a good addition to my VT ETF in USD
So far I was considering the following:
- VERX Good TER (0.10%), EUR based, Portfolio (Switzerland + EU) exactly matches what I was looking for. However only in GBP or CHF via IB
- XD5E, Good TER (0.12%), EUR based, I can buy and sell it in EUR, however, the portfolio does not exactly match what I am looking for (only includes EUR EU-based companies, therefore, no Swiss companies)
- EXSA: not so good TER (0.2%), “only” 600 largest companies included (I guess to much focus on size).
What are your thoughts or ideas?
Thanks
Woodman
I just read this thread. Jesus, why did it take so long until someone recommended VEUR? It’s clearly the best thing, if you want EUR stocks. That’s what I own. I have VTI & VXUS at IB and VEUR at CT.
By the way, you are guaranteed the same returns for any currency you would take (EUR, USD, CHF). The price closely follows the exchange rate. Otherwise it would enable what is called arbitrage: if you own it and the price goes too high, then you sell it, convert it into another currency and buy it where it’s cheaper. If you invest via IB, then just seek out a stock exchange with the highest liquidity. The factsheet provides a full list.
Emphasis added by me.
VEUR is 26.5% UK.
Overall, it‘s still a very low TER.
But again, STOXX Europe 600 includes UK.
So what country / region would you be a fan of?
United States have a very different, non-socialdemecrat model - yet their public debt ratio (to GDP) is higher than most European countries, or probably even Europe on average.
I guess the problem with Europe are their interventionist policies and kilometers of red tape. They want to compete with USA by creating “european champions”, i.e. companies too big to fail, giants with monopoly on the European market, don’t know how that should help.
Also we see that European companies don’t innovate, don’t know why that it. Perhaps the creative and the most ambitious people go to USA to get paid more and get less stolen in taxes?
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Hmm ex-UK is not super important. I just want to put more weight to EU and CH into my portfolio.
So my plan is to invest 90% in VT/VWRL in USD via NYSE and 10% in an EU/CH based ETF in EUR while beeing Swiss Tax resident for the next 7 years (at least).
My biggest conrern are taxes and FX exchange: no double taxation and taking my EURs invest in an EUR domiciled ETF via an EUR Stock exchange…
Maybe EXSA isnt that bad afterall…
Cheers,
Woodman
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so many options 
anyone else an idea?
I saw that @_MP does have VWRD in his portfolio. What if I buy VWRL in EUR instead (so total world in VT in CHF and total world in EUR in VWRL)? Is that a good idea from a Swiss tax perspective?
From which Stock Exchange should I buy it from a Swiss perspective?
Thank you
Woodman
@Woodman I do buy the VWRL EUR on the Euronext Amsterdam as it’s this version which is free of fees with Degiro. Doesn’t change much in terms of taxes afaik.
Maybe, maybe not.
It is German, so will probably be efficient on withholding taxes on German dividends (Germany being the fourth biggest component of the index). Also, does an Irish domicile make much difference for intra-EU withholding taxes?
Why not VEUR (Amsterdam) at IB as well?
Because I opened CT before IB. If I closed CT, I would only hold VTI & VXUS 50/50
@Bojack I am holding VEUR as well, I was mistaken to think that UCITS ETFs have preferential tax treatment within EU/EFTA/Switzerland. Can I get some of the withholding taxes back with the DA-1 form? Have you tried it ?
Irish ETFs can distribute in full (when shares are held via recognised clearing system), without a deduction of withholding taxes.
So is an ETF like VEUR tax optimal for a Swiss resident? What is then the effective withholding tax rate? For SP500 you need to buy US domiciled ETFs and the submit a DA-1 to get 0% tax rate.
From reading this: https://www.cash.ch/news/top-news/ausland-aktien-wie-fordere-ich-steuern-auf-auslaendischen-dividenden-zurueck-1095541 it appears that I might lose 30% of dividends in withholding taxes if I do not file DA-1.
I replied in the other, more appropriately titled thread.
If you are foreigner, they would also accept the Ausländerausweis.
Cheers,
The difference is that Europe has a welfare state, whereas US has a warfare state. Europe spends big on paying people to do nothing and slack around, US spends on being the policeman of the globe. Source of government spending is different, but public debt result is very similar. US policing has at least some benefits to global productivity by stabilizing global trade - Europe’s spending is counter-productive to large extent, it undermines its own and global productivity.
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How can you start off so based
The difference is that Europe has a welfare state, whereas US has a warfare state.
and then devolve into the same tired neoliberal talking points that have been debunked time and time again?
Europe spends big on paying people to do nothing and slack around
Reagan and Thatcher dismantled the “welfare state” and look where the US and UK are now socially. These kind of policies might be good for shareholders in the short term, but as an outcome for society, they are disastrous.
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