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What Finanzfluss and Gerd Kommer don't tell you: What you should watch out for when investing money Switzerland-wide

Do you also constantly end up on foreign finance blogs and YouTubers just because there are there are not enough informative sources in Switzerland? I know the problem all too well. I, too, used to read Gerd Kommer’s book and watch countless videos by Finanzfluss and others. But there’s a major problem here. We live in Switzerland!

Since its introduction in 1999, the euro has lost around 43% in value against our currency, the Swiss franc. The taxation aspects or about our Possibilities in precautionary measures are in Switzerland fundamentally different from abroad. This means that it would not be ideal to simply invest like our foreign neighbours. Adopting a strategy unsolicited from Gerd Kommer, financial flow or other foreign sources would be dangerous.

Out of this problem, in 2019 I have Schwiizerfranke as a targeted financial blog for people in Switzerland established. In this blog post, you will learn in brief where the important financial differences in Switzerland compared to our neighbouring countries lie.

Table of contents

The initial situation: International investments

With our strong currency, the Swiss franc (CHF), and a small domestic market, we have a a special relationship with international stock markets. Anyone investing in Switzerland can hardly avoid dealing with foreign countries.

International stock markets – and the US stock market in particular – have historically been very attractive investment opportunities. Major international tech firms such as Google, Meta and Apple offer the prospect of high returns. Indices such as the S&P 500 and the MSCI World are also popular as ETF investments in Switzerland.

However, when investing money throughout Switzerland, you should be aware that international investments not only have advantages for us, but also disadvantages and risks.. Therefore, pay attention to the following points if you want to approach your investments successfully.

1. exchange rate risk: influence on the value of investments

Probably the most underestimated aspect of international securities for investors from Switzerland in the so-called Exchange rate risk.

When you invest in foreign shares, you face two risks rather than one: the price risk associated with the shares, and the risk that the currency in which they are denominated will weaken against the Swiss franc. This results in In addition to the investment risk, there is also a currency risk..

It’s important to note that it doesn’t matter which currency you use to buy the ETF. A global ETF that you buy on the Swiss stock exchange in Swiss francs contains exactly the same American, Japanese and European companies as the same ETF in US dollars. These companies continue to generate their earnings in their own currencies. A price tag in francs does not mean francs in the fund.

You can see here just how much of an impact this has had over the years:

The Since 1999, the euro has lost around 43% against the Swiss franc. At the In US dollars, the figure has been around 57% since 1986.

However, that does not mean that a US portfolio has lost 57%. It means that a significant portion of your dollar return was eroded when converted into Swiss francs. And part of this movement is simply a correction for higher inflation abroad. In terms of purchasing power, the figure for the dollar is 17% rather than 57%. Both figures are correct. One describes the exchange rate, the other the purchasing power.

To be fair, it is precisely the US market due to tech shares (Apple, Meta and others) in recent years better returns than the Swiss equity market has thrown off. But the difference was not always higher than the currency losses. So the currency risk should not be forgotten under any circumstances.

Notice: Currency risk can be mitigated through currency hedging. This does come at a cost. You pay the interest rate differential between the Swiss franc and the foreign currency. And because the Swiss franc almost always has the lowest interest rate, as a Swiss citizen you usually end up paying extra. We’ll therefore discuss how you, as a Swiss citizen, can better mitigate currency risk in the FinanzFahrplan (in german) detailed.

2. exchange rate fees: The cost of currency conversion

For example, if you buy an Apple share or an MSCI World ETF, you will probably make a currency exchange in the process. When converting from CHF to other currencies, you will have to Depending on the provider, up to 1–2% in foreign exchange fees which reduce your overall return.

A A currency conversion fee of 1% is still common at many Swiss banks. It is charged when you buy and again when you sell. With low-cost providers, it is significantly lower, in some cases below 0.3%. The difference is greater than most people realise.

Important to understand: Currency conversion fees are one-off charges, not annual ones. They do not reduce your return every year, but only once when you invest and once when you withdraw.

Example: You invest CHF 100,000 in an MSCI World ETF and pay an exchange rate fee of 1%. That’s CHF 1,000 before your first franc starts to work for you. When you sell, you’ll pay a further 1% or so. Spread over ten years, this equates to a return of around 0.2 percentage points per year. With a provider charging 0.25%, the fee would be CHF 250 instead of CHF 1,000.

So there’s no reason to forego global diversification because of this. But it is a good reason to take a close look at the provider. In Switzerland, these costs are significantly higher than abroad, and that is precisely what the advice columns from across the border overlook.

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3. taxes: Other countries, other customs

In contrast to our neighbouring countries, in Switzerland there are Price gains tax-free for private investors. This aspect is a great advantage in wealth accumulation.

There are two restrictions to bear in mind: dividends and interest are taxable as income, and your investment portfolio forms part of your taxable assets. Furthermore, anyone who trades very actively may be classified by the tax authorities as a professional securities trader. In that case, capital gains are also taxable. This is not an issue for long-term investors.

But what should you look out for in terms of tax when you read foreign blogs, books or videos on investments?

There are certainly many important examples, but what you will probably encounter early on is the issue of withholding tax. The Withholding tax is levied primarily on dividends from investments abroad (e.g. on an MSCI World ETF) and is settled. Part of this can be reclaimed, whilst another part is lost within the fund itself.

Many countries have tax treaties with each other to avoid double taxation. Investors from Switzerland are subject to different rules than investors from Germany or the USA, for example.

Tax implications when choosing ETFs can be significantly greater than a difference in fees (TER). When investing money throughout Switzerland, therefore, pay attention not only to the fees of ETFs, but also in particular to a Intelligently chosen tax domicile.

The aspects you need to consider would go beyond the scope of this article, which is why the topic is easily understandable in video form in the FinanzFahrplan (in german) is taken up.

4 Diversification: Not always as effective as thought

International diversification (Diversification of your investments) is a key principle of general investment strategies. The aim is to reduce risk through broad diversification.

But it doesn’t work as well as it used to. Companies are generating an ever-increasing proportion of their turnover internationally, and in times of crisis, the markets move almost in unison. Which is precisely when you’d need that diversification. There are numerous Investigations to that.

What’s more, an MSCI World ETF currently consists of over 70% in US equities. Even a global index that includes emerging markets stands at around 64%. In the mid-1990s, the figure was still around 40%. Anyone wishing to be «fully diversified» is, in effect, holding a US portfolio with an international component.

For private investors from Switzerland, this therefore means that a Targeted addition of Swiss equities makes perfect sense:

Four reasons to include Swiss shares in your portfolio
Different sectoral structureThe Swiss market is heavily focused on healthcare and consumer goods – defensive sectors that are less dependent on the economic cycle. This is precisely what a technology-heavy global portfolio does not offer.
Withholding taxYou will receive a full refund of the 35% on Swiss dividends, provided you declare them correctly. With foreign securities, however, part of the withholding tax is definitely lost.
Lower transaction costsNo currency conversion when buying, and none when selling. On top of that, there’s stamp duty: you pay 0.075% on Swiss securities and 0.15% on foreign ones. In other words, double the rate.
Less exchange rate volatilitySwiss shares are traded and valued in Swiss francs. This means there is no daily exchange rate impact on your account statement. Whilst the underlying economic currency risk does not disappear, the visible fluctuations in your everyday currency are reduced.

A glance at the professionals shows that this is by no means a fringe view. At the end of 2024, Swiss pension funds held around a third of their shares in Swiss stocks. Globally, Switzerland accounts for only around 2% of market capitalisation. Institutional investors with assets running into the billions are therefore deviating significantly from the global market – and doing so deliberately.

My assessment: For many Swiss investors, holding around 30% Swiss equities within an otherwise broadly diversified international portfolio is an exciting approach. This is a deliberate departure from the global market, not a standard, neutral solution.

To be honest, one factor to bear in mind is that the major Swiss corporations generate the bulk of their turnover abroad. An SPI investment offers less protection against currency fluctuations than the name might suggest.

5. local advantages in Switzerland: make sure you use them

Have you ever noticed that financial blogs from Germany always refer to general ETF investments, but rarely to local pension options?

However, the Pillar 3a For many Swiss people, this is the most important factor of all. With today’s leading providers, you can invest up to 99% in shares, without any actuarial redistribution. And you’ll be rewarded for this in tax terms, as you can deduct the contribution from your taxable income.

Tax-advantaged pension accounts exist elsewhere too. What makes the Swiss solution special is the combination of factors: freedom to choose your provider, a very high proportion of equities, and a direct tax deduction in the year of contribution. It is precisely this combination that is completely absent from the guides published across the border.

New from 2026, you can also Catch up on missed payments. Any contribution gaps from 2025 onwards can be made up retroactively for up to ten years, provided you have already reached the maximum contribution limit for the current year. In addition, you may make a one-off top-up contribution each year up to the lower 3a limit.

In contrast to other countries, pillar 3a can therefore be the most interesting option for many Swiss people. First port of call for wealth accumulation in the investment of money in Switzerland.

Here you can learn about the Peculiarities of pillar 3a and in this post you can see how to use it to create a tax-efficient Assets of more than CHF 1 million build up.

6. where we (may) invest

Choosing the right provider has a strong impact on the cost and efficiency of your investments. Unlike the US or our European neighbours, for example, we have a very in Switzerland, a significantly smaller selection of brokers.

When we want to invest money in Switzerland, we notice that competition stimulates the market. Or rather, we see that Investment fees far more expensive than in other countries. There have certainly been some developments in savings plans; most of the major providers now offer them. However, when it comes to custody and trading fees, the gap compared with other countries remains significant.

Added to this is a Swiss peculiarity that simply does not feature in foreign guidebooks: the Stamp duty. For every buy or sell transaction carried out through a Swiss broker, you pay 0.075% on Swiss securities and 0.15% on foreign securities. It may not sound like much, but it adds up over the decades.

Although some foreign providers do accept customers from Switzerland, this may not necessarily be the best option for us Swiss. After all, low fees are by no means the only factors you should take into account. A Swiss tax statement saves you hours every year when filing your tax return. And an issue such as the Securities Lending You should check this with every provider, not just foreign ones. The key factors are whether it is used, how it is secured and who receives the returns. You’ll therefore find the Broker comparison for Swiss and also a big Robo Advisor Comparison.

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Conclusion on investing money Switzerland-wide

When it comes to investing across Switzerland, we are in a unique position. We have the Strong franc as currency, Cantonal individual taxes and our own small, (mostly also) fine Banking world. We offer some very attractive options for many financial plans, such as financing a home or saving for retirement.

Accordingly, we can offer investors from Switzerland Do not adopt strategies and tips from abroad without checking them.. Many financial topics apply internationally, but many details are different here.

What you should specifically bring with you:

  • Understand currency risk, don’t avoid it. It is tied up in the underlying assets, not in the trading currency. A global ETF denominated in Swiss francs is not a Swiss franc investment.
  • Keep an eye on Swiss prices. Exchange rate charges, custody fees and stamp duty are higher here than abroad. Foreign guides simply do not mention them.
  • Check Pillar 3a first. For many Swiss people, it is the most powerful lever of all, and it does not feature in any German video.
  • Taxes can sometimes even exceed the TER. The fund’s domicile may be more important than a few hundredths of a per cent in fees.

The exception: the basic principles still apply. Diversify widely, keep costs low, think long-term and persevere. The Swiss context doesn’t change that. It merely alters how you put these principles into practice.

Here in the blog on Schwiizerfranke, in the Free Wealth Letter, or in the FinanzFahrplan (in german) you will always find out exactly what you should look out for when investing money throughout Switzerland.

Feel free to share in the comments which financial topic stands out for you in Switzerland or which one is still on your mind the most at the moment!

18 responses

  1. Hoi Eric,
    I am resident in Germany and would like to invest in Switzerland.
    I am particularly interested in Saxo Bank Switzerland's offer and would like to know whether, as a non-Swiss citizen, I am also eligible for the same terms and conditions and the CHF 200 trading credits offered by this bank.
    Thank you very much in advance for your reply.
    LG Elgo

    Reply

    1. Hello Elgo
      It depends on whether you want to open a CHF account in Switzerland or are offered a EUR account in Germany.
      It is best to contact customer support for advice on how to proceed.

      Reply

  2. Hello Eric

    Thank you very much for this great contribution. In your opinion, is there an approximate % proportion that Swiss equities should make up in the portfolio?

    Many greetings
    Nadine

    Reply

    1. Hello Nadine,
      As a rough guide, one might consider, for example, 30%. However, this should be considered in more detail and also verified.

      Because it's a bit more time-consuming: In the FinanzFahrplan (in german) We simulate various strategies and look closely at what proportion is suitable for your personal situation.

      Reply

  3. Hello Eric
    Thank you very much for the helpful information! The question of currency risk really does concern me. I moved from Germany to Switzerland 15 years ago, I'm now Swiss and would like to stay in Switzerland for the rest of my life. However, I still have euros at a bank in Germany due to inheritance and gifts. I have now invested these via custody accounts that are possible without German residency (one at DKB and one at finanzen-zero.net; scalable capital or trade republic would be my first choice, but are unfortunately not available without German residency). I decided against transferring the EUR to CHF with the idea of diversification and risk distribution. I earn CHF, so my wealth accumulation is CHF-dominated. In the long term, I will continue to build up my assets in CHF. Two questions: 1. does this make sense in principle? 2. if I invest in USD ETFs/shares, should I rather invest in EUR or CHF? At the moment I am getting more USD for CHF, but if the CHF strengthens this will vaporise my gains in USD ETFs as you have described very nicely in the article.
    Thank you very much for your mega good content!!!
    Many greetings
    Christian

    Reply

    1. Hello Christian

      Thank you very much for your positive feedback on the blog! 🙂 I'm delighted.

      Regarding your questions: It is important to know that the future can never be predicted based on the past.
      That’s why no one can give you a definitive answer to your questions. Exchanging euros for Swiss francs would always involve a gamble on the future exchange rate, and I wouldn’t base a decision on that.

      At the very least, using the relevant currencies for purchases denominated in those currencies is highly recommended. Using euros for euro-denominated ETFs and dollars for dollar-denominated ETFs makes perfect sense. This way, you’ll at least save on the currency conversion fees charged by every bank or broker. However, the trading currency does not alter the currency risk associated with the investments themselves.

      Switching between currencies is basically speculating on the future exchange rate, which, as I said, nobody can predict. But I would advise you to at least avoid or reduce currency conversions and the associated fees. For example, you can buy CHF ETFs in Switzerland in francs and buy euro ETFs (if you have any in your portfolio) from your broker in Germany, where euros are already held anyway.
      (Of course, this is not a recommended procedure for others reading here, but relates purely to this special case).
      I hope these thoughts help you!

      Best regards 🙂
      Eric

      Reply

      1. Hello Eric
        Thank you very much for your quick reply. And above all for the change of perspective in this somewhat special case. I do indeed think that the franc will continue to strengthen. I was thinking of keeping the euros in euro investments in order to hedge this currency risk somewhat, as I will still have at least 30 years of asset growth in CHF. But as I'm writing these lines here, I'm wondering whether this isn't a paradox in itself. Because if I think the CHF will strengthen, then it might be ok to accept the currency exchange fees (from EUR to CHF). And then try to invest in CHF ETFs with as much diversification as possible. Your article was really very enlightening here, because I had previously been put off by the often high TER and so I am currently also saving a world ETF in USD. A good example is the iShares MSCI World CHF hedged (ISIN: IE00B8BVCK12) with TER 0.55% and the same in USD (ISIN: IE00B4L5Y983) with TER 0.2%. If you look at the 5-year performance at justetf.com, you can see that the CHF hedged ETF has grown by approx. 48% and the USD ETF by approx. 65%. Now the USD has weakened by around 10% against the CHF in the same period. Maybe the remaining ca 7% difference is somewhere in the spread between buying/selling or currency conversion fees (the latter already included in the higher TER, I thought). Anyway... I still had 2 questions when looking at this and would be very happy and grateful to read your opinion 🙂

        1. if you now regularly invest in a USD ETF via a savings plan and assume that the CHF will continue to strengthen against the USD in the long term, then you can buy more and more ETF units for the ever stronger CHF with every future purchase. However, a large proportion is already invested in USD, which will then naturally become relatively weaker. And now the only question is how much you will invest in the future and what the overall impact on the investment will be. Do you know of an online currency converter for these scenarios? If not, it might be cool if you could integrate one on your homepage. Because I've only just learnt with you how important the currency view is for pension planning, especially for the CH location. Otherwise it will spoil all the nice percentage points of the world ETFs afterwards.

        2. let's assume that the CHF is getting stronger against the USD and EUR and you have both CHF and EUR cash reserves. If you now want to invest in USD ETFs, it would be advisable to do this via EUR, wouldn't it? Especially if you are speculating that the USD will strengthen against the EUR in the future.

        So, those are my last questions for now 🙂 I would be very happy if you could give me a brief assessment (without investment advice, of course) 😉

        A thousand thanks!

        Kind regards
        Christian

        Reply

        1. Dear Christian,
          These are very far-reaching considerations that unfortunately cannot be adequately answered in the scope of a commentary. This would require too many simplifications that could be misunderstood.
          Thematically, the questions fit perfectly with the content of the FinanzFahrplan, where we tackle exactly these kinds of topics. We will be starting again shortly, you can secure your place here: https://www.finanzuni.ch/finanzfahrplan

          Otherwise, feel free to use the blog, here you can find some more detailed content on the topic of currencies 🙂
          Best regards and see you soon,
          Eric

          Reply

  4. An exchange rate risk can always be an exchange rate opportunity. The last 30 years have been unfavourable for CHF-EUR, but that does not automatically mean that it will only continue in this direction forever. Forecasts are difficult, especially when they concern the future 😉 But it is still important that you draw attention to this fact!

    What I am currently concerned about in terms of financial issues in Switzerland is the increasingly frequent mention of investing in money market funds (or ETFs) as an alternative to savings accounts (which usually pay lower interest). If you always want the best interest rate, you currently have to switch bank accounts very frequently. A money market investment seems to be easier. Perhaps you could write an article about this? Does anyone have any experience with this? Is there a money market ETF in CHF? So far I've only found funds, but I don't know which one would make sense, what differences there might be, etc. Does it matter whether CH- or LU-ISIN? In many cases the funds are set up in Luxembourg. I recently entered a buy order with Swissquote (without actually placing it in the end) for a Swisscanto money market fund with a CH-ISIN, which would have only cost a fee of CHF 9. So is no stamp duty payable on money market funds? A lot of question marks...

    Reply

    1. Hello Sebi, thank you for your message 🙂
      Theoretically, an exchange rate opportunity is just as possible – you’re right about that. It’s also true that forecasts are difficult, if not impossible. What can be said without making a forecast is this: a large part of the strength of the franc is a correction for differences in inflation. If prices abroad rise more sharply than here, the foreign currency must weaken against the Swiss franc. As long as this difference persists, logic suggests a further nominal appreciation. This is never a guarantee, however, and I wouldn’t base an investment decision on it.

      With regard to money market funds, the risks (and also the tax issues) should always be taken into account. Currently, these are still too unattractive for my taste compared to a Well-interest bearing bank account. But I would be happy to take up the subject if they become more attractive.

      Reply

  5. Super valuable contribution. Definitely keep an eye on the currency risk. It's better to invest in CHF-listed ETFs. You might lose some performance, but a weak EUR or USD doesn't play a big role, at least visually. I have lost more than 25% in some cases just because of the weak EUR.

    Unfortunately, the world economy runs in USD and many Swiss companies feel the weakness of foreign currencies in their CHF balance sheet. What I will certainly look at more closely in the future is the tax domicile of ETFs. Many a hyped ETF on YouTube is a bad deal for Swiss investors who have to pay their costs in CHF.

    Reply

    1. Absolutely right, Martin.
      A note on the CHF listing: it saves you from having to convert currencies when buying, which is a real cost saving. It does not alter the currency risk itself, as the underlying companies continue to earn their revenue in dollars, euros and yen. Only a genuine hedge (CHF-hedged) changes the risk, and that comes at a cost.

      It is also important to know that many of the listed Swiss companies generate a significant part of their turnover abroad, which means that they are still diversified internationally (albeit indirectly).

      Reply

  6. Thank you for this post. On the subject of taxes, it might also be worth pointing out the tax statement from Swiss brokers or banks. It's a great thing that makes it so much easier to file tax returns - especially for dividends. With foreign brokers, you always have to find everything manually.

    Reply

  7. This is exactly the issue I am currently dealing with. I have the "Global Blue Chips" at Yuh and wonder whether it would make more sense to save for the CHF hedged version, even if it is more expensive. But with the hedged version, the price performance is also significantly worse. Inputs? 🙂

    Reply

    1. Hedging is a whole topic in its own right, and even among the professionals, opinions are divided on this. It’s important to understand that the costs arise primarily from the interest rate differential between the Swiss franc and foreign currencies, not just from the higher TER. And because the Swiss franc almost always has the lowest interest rate, we Swiss usually end up paying extra when hedging.

      When it comes to bonds, I believe one should completely avoid currency risk (always invest in CHF) – this is not investment advice. With shares, things get a bit more complex, and it’s not possible to make a proper comparison in the space of a short comment. I’d be happy to cover this topic in a future post 🙂

      Reply

    2. Internationally active companies operate in different currencies. So you already have a hedge. Globally diversified ETFs in CHF also suffer from a weak dollar. I invest in ETFs in CHF and USD; the TER is the decisive factor for me. I don't think the costs of hedging are worthwhile in the long term. I only hold fixed-interest investments in CHF.

      Reply
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