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ETF Selection for Swiss Beginners
You realize you want to invest in ETFs. The question now is, which ETFs for Swiss fits best and also which ETF for beginners suitable .
In this article there is the answer to this and this with the Focus Switzerland. Because if your income and most of your expenses are in Swiss francs, you should also invest in Swiss francs if possible.
You'll find out why in a moment. Let's get started right away!
If you have any more questions about the post, I look forward to your comment!
Which ETF is suitable for beginners? Be sure to pay attention to the following ETF selection criteria:
| ETF Name | Index | Fees (TER) | Fund domicile | Distribution | Currency | Diversification | ISIN |
|---|---|---|---|---|---|---|---|
| iShares SPI (CH) | Swiss Performance Index | 0.10% p.a. | Switzerland | Distributing | CHF | ✔️✔️✔️ | CH0237935652 |
| iShares SLI (CH) | Swiss Leader Index | 0.35% p.a. | Switzerland | Distributing | CHF | ✔️✔️✔️ | CH0031768937 |
| UBS ETF MSCI Switzerland 20/35 UCITS ETF | MSCI Switzerland | 0.20% p.a. | Luxembourg | Accumulating | CHF | ✔️✔️ | LU0977261329 |
| MSCI World SPDR | MSCI World | 0.12% p.a. | Ireland | Accumulating | USD | ✔️✔️✔️✔️ | IE00BFY0GT14 |
| iShares MSCI ACWI UCITS | MSCI All Country World | 0.20% p.a. | Ireland | Accumulating | USD | ✔️✔️✔️✔️✔️ | IE00B6R52259 |
The ETF Comparison Switzerland and this listing do not constitute an investment recommendation.
Which is the best ETF in Switzerland? Ultimately, the criteria always depend on your personal circumstances and plans.
If you want to build up your investments with a clean strategy, you should definitely check out the FinanceTimetable take a closer look!
Your key to success! Discover our top recommendations from real testimonials.
For ETF selection for beginners and advanced, I recommend you to work with tools. For example, for ETF comparison with justetf.com. Here you can easily find ETFs and compare them with each other.
You can check the above criteria for yourself and then apply directly to Justetf.com enter. The platform will then show you a selection that you should compare. If your ETF selection is successful, you will copy the ISIN number and you will be able to enter it at your Broker and buy the ETF there.
You will quickly realize that not all claims from the theory (see above) can be fulfilled in practice. The ETF selection for beginners and professionals is unfortunately limited by a still limited selection of good ETFs for Swiss.
"Intelligent people learn from the mistakes of others".
We have compiled our top selection for you from all our tests and experience reports:
In practice, the Claims of ETF selection unfortunately not always so easy to fulfil. Therefore, pay attention to the most important criteria for you and then make an ETF comparison.
A typical error in thinking is the Distribution strategy. If you don't currently need an income in the form of dividends, wait until you do.
When choosing an ETF, ask yourself what your goal is. For example, if you want to emigrate and need your money in USD in the future, some of the above criteria are not valid. Otherwise, in Switzerland we have many special featuresThat is why you cannot simply copy a strategy from Gerd Kommer or FinanzFluss from Germany.
Which Swiss ETF did you choose and why? Let us know in the comments. And if you want to build up your investments with a clean strategy optimised for Switzerland, take a look at the FinanceTimetable take a closer look!
24 Responses
Good evening
Why did the second SPI ETF not make it into the recommendations? That would be the UBS ETF (CH) SPI (CHF) A-dis (CH0131872431).
Would be very grateful for an assessment, because at the moment I'm leaning more towards the UBS ETF than the iShares one...
Too bad there's no accumulating version, but you can't have everything...
Thank you for your reply.
Hello Nedia
The UBS SPI ETF is virtually identical to the iShares. The iShares is currently almost three times as large in fund volume, which could possibly reduce costs further in the long term.
Both are therefore very exciting, this selection is purely exemplary and neither a final selection nor an investment recommendation.
Hello Eric
Thank you for your answer. Both have a TER of 0.10 %; it can hardly get much more favourable 😉
I'm leaning towards the UBS ETF because unfortunately I can only invest CHF 100 per month this year and the iShares ETF is too expensive for me in terms of price.
Accumulating ETFs are also taxed in Switzerland, even though they do not make any distributions. The tax office uses a notional distribution as a basis. This is then taxed. Taxation is probably lower than for distributors.
Hello Martin,
Correct! The main difference, however, is that the fund management can settle the reclaims more quickly and reinvest the money more quickly.
You can find projections and studies online that show that this makes a big difference to returns in the long term.
Hello Eric
Thank you for your article.
Question: why do you recommend the following ETF?
- UBS ETF MSCI Switzerland 20/35 UCITS ETF, LU0977261329
Doesn't that correspond to your point "Domicile Switzerland"?
I understand that this is interesting in principle, but I don't understand why this ETF is domiciled in LU when it is from UBS and only tracks CH equities? Or is there another consideration that I am overlooking, or another ETF CH MSCI 20/35, which is accumulating and domiciled in Switzerland?
Many thanks
Tom
Hello Tom,
well looked after. Unfortunately, the selection of ETFs is not yet so comprehensive that it is easy to find the "perfect" ETFs that fulfil all requirements.
This means that MUST criteria must be determined intelligently and according to the investment strategy and then a selection made.
Hi Tom, have a look at the SLICHA ETF from UBS. Low TER and the SLI index contains more stocks than the SMI.
Hey
I have a question about the UBS Investment Account. I have recently started to look into the subject of investing. I came across the offer from UBS (the bank I usually use). I have opened an account there and let UBS take care of most things for me. I simply choose from the funds suggested based on my details/interests. Most of the funds etc. But they don't mean anything to me. E.g. UBS (LUX) Key Selection SICAV - Digital Transformation Themes. Of course I know the theme of the fund... The average performance of these funds is between 2 and 7 per cent when I look at the UBS website.
However, I often read that it would probably be better to invest more generally, e.g. in the MSCI World ETF.
I would be interested in your opinion on this topic. Do these UBS funds make sense or is it better to invest in selected funds, ETFs etc. yourself? Is it better to invest in selected funds, ETFs etc. yourself, e.g. via a FlowBank, Swissquote etc. account?
Many thanks for your help & information!
Lg User 😉
Hello Alain,
Thank you for your good question 🙂
You should not only look at the funds in terms of the theoretically possible returns (here the marketing brochures can say whatever they want), but also in particular at the fees. Pay attention to the TER, for example.
For active funds, this is often in the range of 2-4% per year. However, you can find a passive ETF or index fund with a similar strategy from as little as 0.1-0.5% in fees per year.
Since in the end performance - fees = return, you should make a holistic comparison. Personally, I therefore only invest with low-cost ETFs. Please register for the Free Wealth Letter if you would like to find out more.
Hello Eric
Thank you very much for your detailed explanations.
I have a question about the investment amount. I have read/heard several times that it is better to switch from Yuh to e.g. Swissquote after a certain amount. I have not understood this mathematically. Why is that and where is the limit?
Many thanks and best regards
Hello Katrin,
thank you for your comment! 🙂
In terms of fees, the difference only comes into play with very large purchases/sales. More important for many: The smartphone apps encourage more trading, which (scientifically proven) does not always have a positive effect on returns. Furthermore, the range of investments (e.g. ETFs) is not as wide as with Swissquote. If you want to invest strategically and have a clean investment strategy, it gets a bit difficult with the selection at Yuh.
Nevertheless, Yuh can be the perfect entry point and may be the right solution for some in the long term 🙂
Hello, Eric,
First of all, I would like to thank you for your work here. You help me every week to educate myself financially, this is of great value.
I opened an account with Degiro this week (saved fees are improved returns :)).
Now to my question:
You write, "ETFs domiciled in Luxembourg have an increased VAT levy and Swiss withholding tax cannot be reclaimed. (ETFs on the U.S. market, for example, are tax-efficient in Ireland)."
The iShares Core MSCI World UCITS ETF USD (Acc) would be such an ETF domiciled in Ireland. What exactly do I save in withholding taxes now? Or better asked is this still less favorable than an ETF domiciled in Switzerland?
How is the withholding tax deducted for an accumulating ETF?
Do you know any ETFs that track the MSCI World/Core and are tax domiciled in Switzerland?
Sorry that I have formulated so many questions right now, I actually came with the intention of asking only one question.
LG Fabio
Hello Fabio 🙂
thanks for your great feedback!
The topic of taxes is too complex for a short comment. In short / simplified: Your US MSCI ETF from Ireland will be charged only 15% withholding tax thanks to double taxation treaty. You save about 15% withholding tax compared to many other countries, as this is often 30%.
In Switzerland, 35% withholding tax is payable on dividends.
In the case of reinvestment, the tax is deducted even though the distributions of the companies within the ETF never reach you. The ETF handles this internally and automatically for you.
As far as products are concerned, requirements and supply are unfortunately not (yet) always ideally matched. If anyone has any tips, feel free to share them here directly with the ISIN.
Best regards 🙂
I also like the idea of using two ETFs. For better diversification, I use the international "Vanguard Total World Stock (VT)" on the one hand and the UBS SMIM (CH0111762537) for the domestic market on the other. The SMIM always performs historically very well, as was recently seen in K-Money.
Both ETFs are distributing.
I invest monthly and reinvest the distributions each time. Whether this is true with the yield comparison in the comments with 5% vs. 7%, I may doubt. Would be exciting to work this out.
With VT, the disadvantage is that in each case must be converted to $. This brings additional fees. But this ETF with 0.08% ! is one of the very cheapest.
It is very important to use a cheap broker. Then the exchange and purchase fees hardly make a difference with the appropriate sum.
Thanks for your comment 🙂
Here a Fintool video with concrete figures (8.4% per year without distribution vs. 5.9% with distribution and without reinvestment).
With reinvestment (only with the inhibition due to taxation), the difference will therefore be much smaller.
Hello Eric
I think the point about the distribution type is not quite correct. Regardless of whether the ETF is distributing or not, the income is both taxed in Switzerland, as far as I know.
Greetings, Tom
Hello Tom,
is taxed in any case, that is correct. However, it is the frequency of taxation that matters. Because an early distribution (dividend) is minimized by the taxes, accordingly the capital grows slower, even if you reinvest the dividend minus taxes.
Is this the point you were referring to?
Dear greetings 🙂
The question of the appropriate ETF to cover the Swiss market as well as possible had also recently occupied me for some time. While researching, I came across the following article from The Market (NZZ), which I found very helpful:
https://themarket.ch/analyse/wie-man-mit-etf-in-schweizer-aktien-investiert-ld.4931
You recommend combining at least two ETFs, e.g. an SMI/SLI/MSCI Switzerland for the large caps and an SPI Mid / SMIM for the small and mid caps. I then also implemented this more or less like this. I chose the UBS ETF MSCI Switzerland IMI Socially Responsible (CH0492935355) and the UBS ETF SPI Mid (CH0130595124).
Hello Simon
I had seen the post too, find the approach very exciting. Thanks for sharing 🙂
Depending on the strategy, the two ETFs are unfortunately also unsuitable again because they are both distributing. Who the Asset accumulation target has, it is imperative to take this into account. The distributions provide for increased taxes and when they are then reinvested, further fees are incurred.
Studies show that in this case the average return through distributions is 5% p.a. rather than 7% p.a. in the long run.
Personally, I try to choose accumulating ETFs to accelerate wealth accumulation. Only when I want to live off the capital do I switch to distributing ETFs.
So here again every investor has to see for himself what the personal investment goal is.
Best regards 🙂
Eric
Hello Eric
The UBS ETF on the MSCI Switzerland is accumulating. Unfortunately, as far as I know, there is no accumulating product on the SPI Mid / SMIM.
Many greetings
Simon
Dear Eric
In my opinion, the UBS ETF SLI (CH0032912732) would still be the better option, as the costs are only 0.2%. Fund volume is 914m
Many greetings
Brigitte
I don't think it's so smart to limit yourself only to Swiss companies. In any case, this is not a world portfolio and not particularly well diversified globally.
Hello Alexander,
the Switzerland / Worldwide debate is a bit too big for the comments section.
My summary: A good mix of focus on Switzerland and global equities makes a lot of sense in my opinion.
If you want to start simple, a focus on Swiss equities is not wrong. Why?
Historically, they correlate very strongly with international markets. If you look at the local companies (e.g. Nestle) you will quickly see that they operate globally and are therefore already internationally diversified. Furthermore, depending on the bank/broker, you will quickly save fees of over 1% when buying and another 1% when selling for the currency exchange.
Nevertheless, an MSCI World or another global index is also very useful and correct. With the above criteria you can quickly find a suitable ETF. The question is which for you personally fits best? Feel free to share it here 🙂