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Old 09.09.2013, 18:36
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Low cost Investment Funds in Switzerland

Hi, I'm looking to invest some money and am looking for a bank/broker that offers low fee equity investment funds, specifically index trackers for the big US and European markets (funds denominated in CHF would be a bonus). Does such a thing exist in Switzerland?

In the US I'd just open a Vanguard account but in Switzerland I can't find anything like that. Credit Suisse who I have my current account with charge an initial fee of 1.5-2.0% for all their funds and only offer actively managed funds with very high annual management charges. Swissquote who I also use have a choice of 1000s of funds but no low cost index trackers for the S&P etc.

I can't imagine I'm the first expat to run into this problem so hopefully somebody out there can give me an idea of where to look

Thanks!
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Old 09.09.2013, 19:08
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Re: Low cost Investment Funds in Switzerland

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Hi, I'm looking to invest some money and am looking for a bank/broker that offers low fee equity investment funds, specifically index trackers for the big US and European markets (funds denominated in CHF would be a bonus). Does such a thing exist in Switzerland?

In the US I'd just open a Vanguard account but in Switzerland I can't find anything like that. Credit Suisse who I have my current account with charge an initial fee of 1.5-2.0% for all their funds and only offer actively managed funds with very high annual management charges. Swissquote who I also use have a choice of 1000s of funds but no low cost index trackers for the S&P etc.

I can't imagine I'm the first expat to run into this problem so hopefully somebody out there can give me an idea of where to look

Thanks!
Just buy a US product economy of scale
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Old 09.09.2013, 19:44
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Re: Low cost Investment Funds in Switzerland

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Just buy a US product economy of scale
I would but I don't have a US address which makes that more difficult. I also don't know if that would make doing my taxes more complicated (I'm not a US citizen but have worked there)
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Old 09.09.2013, 20:17
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Re: Low cost Investment Funds in Switzerland

"1000s of funds but no low cost index trackers for the S&P etc."

umm, not trying to sound like a dick but have you not heard of SPY? if all you want is to track S&P, SPY is the etf that is almost 10% of S&P to the penny. just buy the shares in swissquote and be done with it. no management fees, only the commission to buy and sell. Holding a US stock won't affect your taxes any more than holding VW shares. You already have a swissquote account, just click on "north America" in the left side panel, then select "ETF's". The second one from the top is "SPDR S&P 500 ETF" (AKA: SPY)

hit "trade it" enter how many at what price and you now own SPY.
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Old 09.09.2013, 20:27
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Re: Low cost Investment Funds in Switzerland

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In the US I'd just open a Vanguard account but in Switzerland I can't find anything like that.
As a very happy Vanguard investor in the States I understand where you come from!

I have never invested in Switzerland, but Googling for vanguard etf switzerland led me to their Exchange Traded Funds page. I assume that these funds can be bought through the cheapest online brokerage.

To repeat, I know nothing about investing in Switzerland, but hope that the link may help you get started.
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Old 09.09.2013, 22:16
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Re: Low cost Investment Funds in Switzerland

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I would but I don't have a US address which makes that more difficult. I also don't know if that would make doing my taxes more complicated (I'm not a US citizen but have worked there)
Have a us broker account , dead easy.
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Old 09.09.2013, 22:53
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Re: Low cost Investment Funds in Switzerland

Swiss Post Finance is easy to use, on-line & in English but probably not the cheapest; probably cheaper than CS. :-) :-)
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Old 09.09.2013, 23:29
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Re: Low cost Investment Funds in Switzerland

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Swiss Post Finance is easy to use, on-line & in English but probably not the cheapest; probably cheaper than CS. :-) :-)
It's way more expensive than trading with Schwab for example, costs higher both selling & buying plus some Swiss stamp duty.....Plus dividends taxed at source 30% rather than 15%. Nothing to like even if cheaper than CS!
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Old 10.09.2013, 07:18
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Re: Low cost Investment Funds in Switzerland

Just get a Swissquote account.

Last edited by Swissish; 10.09.2013 at 07:31. Reason: opps...just realized you said you already use this.
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Old 10.09.2013, 07:39
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Re: Low cost Investment Funds in Switzerland

I use this and don't have any tax issues:

fundsmith.co.uk

make sure your third pillar is fully utilized first as this will improve your tax burden

I am not a financial adviser, this is not financial advice
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Old 10.09.2013, 08:52
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Re: Low cost Investment Funds in Switzerland

I second what fatmanfilms is suggesting. Get a US broker now instead of later.

Yes, it is annoying to fill out the paperwork and setup a way to send out transfers denominated in USD.

But it is even more annoying to get fed up with the limitations / high costs of a "local broker"*, and then eventually become convinced that you should have had an US broker in the first place: you will still have to fill out the paperwork and a way to send out transfers in USD, and on top you get the added hassle of somehow moving your existing assets from the "local broker" into your new one.

* The US ones are just cheaper per order, and in generally have lower or no custody fees. The fees to invest in stuff outside of the local market are even higher and that is when you actually get the option to - whereas in the US you get access to practically everything you could ever want from the start, through ETFs or ADRs. As silly as it may sound, even if you want to invest exclusively in Europe I think a US broker is even the best option.
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Old 10.09.2013, 11:09
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Re: Low cost Investment Funds in Switzerland

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I use this and don't have any tax issues:

fundsmith.co.uk

make sure your third pillar is fully utilized first as this will improve your tax burden

I am not a financial adviser, this is not financial advice
I think fund smith.co.uk is likely to be a great long term investment, they have an Euro dominated feeder fund based in Luxembourg.

The AGM's are always funny this tells you most about the strategy.
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Old 10.09.2013, 11:22
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Re: Low cost Investment Funds in Switzerland

Agreed. They seem to have a clear direction and focus.
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Old 10.09.2013, 11:29
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Re: Low cost Investment Funds in Switzerland

Thanks, it sounds like something US-based is the best option then, which is annoying as Switzerland is famous for its banks so it's frustrating they're so uncompetitive

To those suggesting ETFs I wanted a more traditional investment fund because:
1) I want to reinvest dividends which is typically a free option with conventional funds, but incurs trading fees with ETFs (and those trading fees aren't exactly small with a Swiss broker)
2) I want to invest a regular monthly amount (i.e. dollar cost averaging) which again is typically free with a traditional fund but less efficient with ETFs because you incur fees each month
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Old 11.09.2013, 13:23
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Re: Low cost Investment Funds in Switzerland

How about interactivebrokers? You can setup an account here and as far as I understand, you can buy and trade US securities at the same low rates as you would if you had an IB account in the US. You can fund it in any currency.

One other comment on the topic of high fund fees in switzerland. I too find it ridiculous what banks and companies here charge for money management. With so much money managed here, you would think they could charge less than 1.5-2% up front and 1-2% expense ratios for funds! Even the poor saps putting their money into pillar 3 funds can't catch a break. The banks here know no end to their greed.
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Old 11.09.2013, 15:59
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Re: Low cost Investment Funds in Switzerland

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To those suggesting ETFs I wanted a more traditional investment fund because:
1) I want to reinvest dividends which is typically a free option with conventional funds, but incurs trading fees with ETFs (and those trading fees aren't exactly small with a Swiss broker)
2) I want to invest a regular monthly amount (i.e. dollar cost averaging) which again is typically free with a traditional fund but less efficient with ETFs because you incur fees each month
1) Select accumulating rather than distributing ETFs
2) Rather than investing every month let the money accumulate in the broker account and purchase say once a quarter instead

>> Here << is a link to all the ETF listed on the SWX
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Old 11.09.2013, 18:36
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Re: Low cost Investment Funds in Switzerland

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1) Select accumulating rather than distributing ETFs
2) Rather than investing every month let the money accumulate in the broker account and purchase say once a quarter instead

>> Here << is a link to all the ETF listed on the SWX
Thanks, I didn't actually know there was such a thing as an accumulating ETF so that's a great tip. As a Swiss resident do you have to pay any tax on the accumulated dividend income or does it count as a capital gain of the ETF and so isn't taxed?
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Old 11.09.2013, 19:48
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Re: Low cost Investment Funds in Switzerland

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Thanks, it sounds like something US-based is the best option then, which is annoying as Switzerland is famous for its banks so it's frustrating they're so uncompetitive

To those suggesting ETFs I wanted a more traditional investment fund because:
1) I want to reinvest dividends which is typically a free option with conventional funds, but incurs trading fees with ETFs (and those trading fees aren't exactly small with a Swiss broker)
2) I want to invest a regular monthly amount (i.e. dollar cost averaging) which again is typically free with a traditional fund but less efficient with ETFs because you incur fees each month
Can't you do that with Vanguard's funds? I am 99% sure that is what we do...although we do have a US bank account that we use to feed the money into Vanguard
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Old 12.09.2013, 04:05
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Re: Low cost Investment Funds in Switzerland

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Thanks, I didn't actually know there was such a thing as an accumulating ETF so that's a great tip. As a Swiss resident do you have to pay any tax on the accumulated dividend income or does it count as a capital gain of the ETF and so isn't taxed?
There is no income, that is the point!
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Old 14.09.2013, 20:57
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Re: Low cost Investment Funds in Switzerland

I will move to switzerland soon and I Have exactly the same question and after a little bit of searching on the internet and reading the previous posts this is my conclusion:

For investing money as savings my aproach will be to use ETF´s at Post Finance. Here is why. It is simple and free to open an account, the fees are not that expensive (compared to other swiss options which is the point of the thread)

The cost of buying or selling and ETF is around 0.35% (or 35 CHF per 10000 transaction). There is NO custody fees. ETF are great because of the much lower fees than mutual funds and you can by an ETF that replicates your favourite index (SP 500 for example as suggersted above).

Best of all, If I understood Jim correctly and other forum members there is no capital gains tax in switzerland. So if I buy an ETF for 10000 today and I sell it for 12000 in five years I do not have to pay any tax on these earned 2000. Am I correct?

If somebody have some suggestions to us non financial experts please let us know. (and I am not rich to hire a financial adviser so I try to do everything myself)
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