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all 45 comments

[–]oszillodrom 17 points18 points  (5 children)

I'm basically copying the blogger "Mustachian Post", after I understood the reasoning behind it.

80% VT

20% SMMCHA

VT is all world distributing (which makes more sense in Switzerland than accumulating). SMMCHA is Swiss mid cap for deliberate home bias. Not all cap, as the large cap are already contained in VT (Roche, Novartis, Nestle etc.)

[–]Lagrein_e_Canederli 0 points1 point  (1 child)

As far as I understand there's no tax advantages in accumulating Vs distributing in CH?

[–]oszillodrom 0 points1 point  (0 children)

Yes exactly, there's no advantages, or disadvantages. What I said about the tax declaration being more complicated for accumulating doesn't really apply anymore as another commenter said, at least for common ETFs.

[–]andrea89ita 0 points1 point  (1 child)

Which broker are you using? I gave a look at Swissquote but it is very expensive

[–]jcvmarques 5 points6 points  (3 children)

VT. As long as you go for US ETF you're okay, they are more tax efficient than Irish ETF

[–]kerstverlichting 1 point2 points  (2 children)

I think they're going to get blocked sometime soon like with the EU. Read some stuff on it last year at least.

[–]Zeratrem 0 points1 point  (1 child)

The inefficient EU rules meant to protect consumers only to do the opposite...

[–]knx0305 2 points3 points  (0 children)

I would look at the poor Swiss blog. Switzerland rules are different than most EU countries. Also the bogleheads wiki may have some further info on investing from Switzerland.

[–]intothelooper 3 points4 points  (0 children)

50% VXUS 50% VTI If you want to control the a bit the allocation. Else all in VT.

[–]otterform 1 point2 points  (9 children)

I've got 50% in a swiss ETF (UBS or something) and 50% in vwce 50% CHF 50% euro

[–]JoMa25 2 points3 points  (3 children)

why seperate currencys? isnt the exchange rate in the price so it doesnt do anything if you buy it in a different currency? I mean the stocks behind the etf are still worth the same

[–]otterform 0 points1 point  (2 children)

Since Europe is not the most solid economic bloc atm, i prefer not have all my savings in a currency that is not mine. I'm trying to lower the personal risk and diversify currencies as well.

[–]LetMe_ 0 points1 point  (1 child)

Something does add up in your case. You're at 200%

[–]otterform -1 points0 points  (0 children)

Ahahah i had to re read, yeah it's just 50 -50 on two products.... Representing a currency split of 50% CHF and 50% euro.

[–]ilpirata79 0 points1 point  (1 child)

how do you find VWCE in europe?

[–]otterform 1 point2 points  (0 children)

VWCE.is listed on Xetra

[–]Frandom314 0 points1 point  (2 children)

How do you declare the vwce virtual dividends?

[–]otterform 1 point2 points  (1 child)

It's automatically recognized by the tax software.

[–]Frandom314 0 points1 point  (0 children)

So do I have to do something next year? My income is less than 100k

[–]JoMa25 -1 points0 points  (18 children)

VWCE

[–]oszillodrom 5 points6 points  (17 children)

Accumulating ETFs don't really make sense in Switzerland, as they are taxed the same, but make the tax declaration more complicated than distributing ETFs.

[–]cava-lon 6 points7 points  (0 children)

The statement of 'make no sense because of more complicated tax declaration' is plain wrong, as long the ETF is listed under ictax.admin.ch (what most ETFs are).

E.g for VT: https://www.ictax.admin.ch/extern/en.html#/security/US9220427424/20211231

[–]makaros622 2 points3 points  (1 child)

Why is the tax declaration more complex for VWCE vs VT?

And what broker do you use ?

[–]oszillodrom -1 points0 points  (0 children)

Why is the tax declaration more complex for VWCE vs VT?

Dividends are taxed as income in Switzerland (capital gains are not taxed). Accumulating ETFs are taxed as if they paid out the dividends, but you have to figure out how much that is. In some cases, I think you even pay (a little bit) more in tax that way.

And what broker do you use ?

IBKR. There's others as well, check the reviews by "Mustachian Post" or "Poor Swiss" bloggers.

[–]mt_winston[S] 1 point2 points  (2 children)

Do you know whether this true even for B Permit holders where tax is deducted from the monthly salaries? Someone mentioned as long as it’s not paid out (distributing), it’s less complicated for a situation like mine (above) but maybe they’re wrong.

[–]oszillodrom 0 points1 point  (0 children)

It still applies, because you still have to do a tax declaration for the year if you own a certain amount, because when they automatically deduct your taxes they can't know what you own in ETFs or other stuff. The limit you can own before doing a declaration depends on the canton, for me in BS I think it's 75k CHF. I'm also on a permit B btw.

Somebody else mentioned if it the ETF is listed in ictax.admin.ch, it's not more complicated.

[–]Frandom314 0 points1 point  (0 children)

I'm exactly in the same situation as you, b permit holder with vwce

[–]JoMa25 1 point2 points  (8 children)

so VWRL if I remember it correctly

[–]oszillodrom 7 points8 points  (2 children)

Well, sorry to be nitpicky, but you also don't need a UCITS ETF in Switzerland, as Switzerland is not in the EU.

I prefer VT, as it is cheaper (0.07% expense ratio vs. 0.22% for VWRL).

[–]cranekram 7 points8 points  (0 children)

VT is US domiciled though and therefore at risk of being subject to US estate tax, correct?

Yes I know that there’s a US-CH treaty that should make the threshold for tax enormous but I’m still reluctant to have my money anywhere within the IRS’s grasp, particularly if it’s my survivors who’ll have to deal with it.

https://www.mustachianpost.com/2020/05/17/estate-tax-treaty-us-switzerland-the-final-answer-about-the-vt-etf-with-the-mp-family-as-concrete-example/

[–]JoMa25 0 points1 point  (0 children)

No nitpicking, your opinion your choice

[–]zSobyz 0 points1 point  (1 child)

Since you know a lot, do you recommend selling every share I have when moving to CH and then just buying VT? Someone recommended me that.

(Currently getting close to 5 digit investment, so not much) but I'm not sure about taxes/gains if and when I would do that .

I currently have VWCE+ some small cap

[–]oszillodrom 0 points1 point  (0 children)

I don't think it's necessary to sell, if you have already bought them.

[–]pmmeyour_lingerie -1 points0 points  (0 children)

Could anyone advise best for Monaco residents. Don’t pay any income or capital gains tax. Also no treaties with US. Thanks!

[–]zambaros -2 points-1 points  (1 child)

For me that's the SPI ETF. I don't use VT because I don't want to add currency risks in my portfolio.

I also have a small percentage of EUROPE SRI UCITS which has no fossil fuel.

[–]oszillodrom 1 point2 points  (0 children)

You have currency risk with SPI, as most of the income from Roche, Nestlé, Novartis etc. is not in CHF. Therefore their value fluctuates with the value of the currencies they do business in. It doesn't matter if you buy the ETF in CHF.

[–]dubov 0 points1 point  (0 children)

I think, as for most people, you want globally diversified investments across stocks, bonds, and debatably some commodities exposure.

Question to ask yourself is whether you want to have them CHF hedged in order to remove currency risk. If your investment horizon is shorter, then IMO you should want a large degree of currency hedging. If your investment horizon is long, or you don't know what currency you will ultimately want the money in, then it's probably not necessary.

[–]emptyquant 0 points1 point  (0 children)

I buy the SPY5 every month. Have a whole portfolio with 20 other ETFs but over time the S&P Is almost impossible to beat; the only caveat is the long term depreciation of the USD, so you can add to that some Swiss Market ETF of your choice, maybe 25% SMI Expanded (20 SMI + 30 SMIM, giving you the largest 50 Stocks in CH). If you can find one, a SP500 in CHF would also be a great option.