The best ETF Portfolio for Switzerland in 2025
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Before investing in the stock market, you must choose a portfolio. In Switzerland, you will likely invest in index funds via Exchange Traded Funds (ETFs). For this, you must decide on a good ETF Portfolio for a Swiss investor.
Choosing a good portfolio is an important decision. You must invest in a portfolio with low fees, high diversification, and good returns. And you should be careful about keeping it simple!
While there are many examples of ETF Portfolios for the United States, there are few examples for Switzerland. So, it is not trivial to choose one.
In this article, we review the details of choosing an ETF Portfolio for Switzerland. And at the end of the article, I give you an example of what I think is the best ETF Portfolio for Switzerland.
Choosing an ETF Portfolio for Switzerland
Choosing an ETF portfolio is an essential step when investing in the stock market. You should keep the same portfolio for a very long time. So, you need to choose carefully.
If you live in the United States, you will have seen tons of examples of ETF portfolios. But if you live in Switzerland, you probably have not seen that many of them.
And if you live in Switzerland or Europe, you cannot blindly follow a portfolio from another country. We cannot compare Switzerland with the United States. Our stock market is 20 times smaller. And in some other countries, it is even smaller than that. So we cannot invest in the same way.
For me, the best ETF Portfolio for Switzerland has two essential parts:
- An ETF representing the entire world stock market. Or it holds two ETFs, one for the Developed World and one for the Emerging Markets, but not more than two.
- An ETF representing the domestic Swiss stock market. This part of your portfolio is called your home bias.
With these two parts, you can have a very diversified yet simple portfolio. This portfolio is what I am investing in and what I recommend people to invest in.
We will see a few things in detail before I review the ETFs that form the best ETF portfolios for Switzerland.
Home Bias
A good ETF Portfolio for Switzerland should have some domestic stocks. This allocation will be your home bias.
The main reason for this is related to currency. Since the Swiss Franc is a stable currency, other currencies tend to depreciate against the Swiss Franc. If your entire portfolio is in USD, you may lose much value. So having an ETF in your local currency will help you.
Of course, you could hold only Swiss stocks in Swiss francs, and you will not have this issue. But having only Swiss stocks is not a great idea. A lot of Swiss companies are exporting to other countries. It means their performance is subject to currency exchanges.
The Swiss stock market is tiny, about 2.5% of the world’s stock market. So do you want to bet your entire portfolio on 2.5% of the world?
Finally, the Swiss stock market had lower performance than the world stock market historically. So if you only invest in Swiss stocks, you will need a larger portfolio to sustain your expenses.
Another way of reducing the currency risk is to use ETFs that are hedged to CHF. But currency hedging is expensive and is generally not the best tool for long-term investing.
So, how much should you allocate to your home bias?
Between 20% and 40% should be allocated to a Swiss Stock ETF. 10% is probably OK, but anything below 10% will not make enough of a difference to bother with it. 50% is also probably okay, but you are making a large bet on the Swiss Stock market with such a large allocation. It is why between 20% and 40% is a reasonable allocation.
In my ETF Portfolio for Switzerland, I have 20% of Swiss Stocks. Currently, I am pretty satisfied with this. I may consider bumping it to 25%, but no further.
I have done simulations of early retirement in Switzerland with Swiss Stocks. If you look at the results, this will also confirm the 20% to 40% bias.
For more information, I have an article about whether you should have a home bias in your portfolio.
What about bonds?
Swiss bonds have been in negative territory for several years in the past. However, as of 2023, Swiss bonds are once again interesting. It remains to be seen for how long, but it now makes to invest in bonds again.
Not everybody needs bonds in their portfolios. Indeed, this depends on your risk capacity. Personally, I do not own bonds. My portfolio is 100% stocks. But this does not mean it is a good portfolio for everybody. It is a good portfolio for me, with my risk capacity.
Using your risk capacity, you can choose your asset allocation. An asset allocation is the percentage of each asset in your portfolio. In our current, this will be the percentage of bonds and stocks.
Bonds are great for reducing volatility in your portfolio. They are especially useful in the early years of retirement when risks are higher for your portfolio.
What about foreign bonds?
Some people try to invest in foreign bonds instead. But doing so is not a good idea. I made this mistake myself. The problem with international bonds is that they will incur an additional currency risk to your portfolio.
When you invest in bonds, you want the bonds to lower the volatility of your portfolio. You want your bonds to help you when the stock market is not doing well. But if you add currency risk on top of that, you will not achieve this goal.
So, investing in foreign bonds is a lousy alternative to Swiss bonds for an ETF portfolio for Switzerland.
Alternatives to Swiss Bonds
If you do not want bonds but want to reduce volatility, there are several solutions to emulate bonds:
- Allocate some of your Swiss Portfolio to cash. Currently, cash is better than bonds. Of course, it is not great since it is still losing value due to inflation. But it still beats losing money with Swiss bonds.
- Invest in your second pillar. Most second pillar accounts offer around a 1% interest rate. And you will have some tax advantages as well. For me, this is the best alternative to Swiss bonds.
- Invest in gold. Gold has better returns than the second pillar and the Swiss bond market. And there are some excellent Gold ETFs. So you can directly invest in gold in your ETF Portfolio. But gold is not risk-free and can be quite volatile at times.
Of these three options, I prefer investing in my second pillar. But the second pillar has three limitations. First, it is limited because you cannot invest a limitless amount. Secondly, you will not be able to get the money before you retire. Therefore, it is not ideal for early retirement. Also, you can only get tax advantages if you have not withdrawn from the second pillar. And without tax advantages, the second pillar is not great.
So, I would recommend starting with your second pillar. And then, you can allocate some part of your ETF portfolio for Switzerland into gold. Or you can bump a little your cash allocation until you feel at ease.
How to choose ETFs
For each position in your portfolio, there will be several choices for you. There are many ETFs for each stock market index. So, how can you choose between these ETFs?
There are several things you need to look at:
- The Total Expense Ratio (TER) of the fund is how much fees you will pay each year.
- The domicile of the fund is the country from which the ETF comes from.
- The size of the fund. You generally want large funds for smaller spreads and higher liquidity. But do not pay too much attention to the detail. A fund managing two billion dollars is not better than a fund managing a single billion. On the other hand, a fund managing 10 million is less attractive than one managing 200 million.
- The way the ETF is replicating the index. You only want to invest in funds with Physical Replication.
- The way the ETF is handling dividends. A fund can either distribute or accumulate dividends. In Switzerland, you will pay the same taxes for both, mostly a matter of preference. I prefer distributing funds to get the cash once I need it in retirement. And this cash will also help me with rebalancing.
One excellent resource to find and compare ETFs is justetf.com. They have an extensive list of ETFs, and you can compare the information on different ETFs in a very convenient way.
For more detail about this process, I have an article about choosing and comparing ETFs.
The best ETF Portfolio for Switzerland
Now, we have covered the most important aspects of designing an ETF portfolio. Thus, we can finally go over the details of the ETFs.
Now, remember that this is only an example, which only reflects my way of investing. Therefore, this portfolio may not be the best ETF Portfolio for Switzerland for everybody. And remember that I am not a personal advisor and that you should still do your research and not merely copy what I am doing.
Here is what I consider to be the best ETF Portfolio for Switzerland:
- 80% World ETF
- 20% Swiss Stocks ETF
This portfolio is extremely simple and highly diversified. As I said, the percentages can vary. Between 20% and 40% allocated to Swiss stocks is a good range. So you could go 25/75 or 60/40, for instance. Anything between 20% and 40% would be fine. Adding more Swiss stocks will reduce your currency risk but reduce your returns.
Now, we can look into the ETFs. Which one you use will depend on whether you can access U.S. ETF. Then, we will see how to add bonds to the mix.
ETF Portfolio with U.S. ETFs
If you have access to U.S. ETFs, for instance, with Interactive Brokers, I recommend the following ETFs:
- Vanguard Total World (VT) for the World ETF with a TER of 0.07%
- iShares Core SPI (CHSPI) for the Swiss Stocks ETF with a TER of 0.10%
With this portfolio, you will have very low fees and high diversification. You also have the advantage of saving 15% of the U.S. dividends on VT. Saving on dividends will make a significant difference compared to the other portfolio. It is some extra optimization that you can do to your portfolio. But in the grand scheme of things, it will not change everything.
As an example, my allocation of 20% to Swiss Stocks would give this ETF Portfolio for Switzerland:
- 80% Vanguard Total World (VT)
- 20% iShares Core SPI (CHSPI)
This portfolio is the current portfolio I am investing in.
If you wonder why I talk about U.S. ETFs, here is why U.S. ETFs are great.
ETF Portfolio without U.S. ETFs
If you do not have access to U.S. ETFs, I recommend the following ETFs:
- Vanguard FTSE All-World UCITS ETF Distributing (VWRL) with a TER of 0.22%
- iShares Core SPI (CHSPI) for the Swiss Stocks ETF with a TER of 0.10%
With my allocation of 20% Swiss Stocks, this would give:
- 80% VWRL
- 20% CHSPI
This portfolio would be the one I would be using if I were not investing in U.S. ETF. If you want to be cheaper, you can choose one ETF for the developed world and one ETF for the emerging markets. That way, you can save a little on TER. But I prefer to have only two ETFs, even if the fees are slightly more expensive.
This portfolio has two disadvantages over the one with U.S. ETFs:
- The TER is about twice more expensive.
- You will lose 15% of the U.S. dividends because you will not profit from the double-taxation tax treaty since the funds are not in the United States. This difference is more significant than the first one. But this difference is often ignored by many investors.
If you want to save a little money, you can switch tot the MSCI World Index. This index does not cover the emerging countries, so it is less diversified. But you can find some cheaper ETFs. For instance, you have the UBS ETF MSCI World UCITS ETF (USD) A-dis ETF which only costs 0.10% per year, but is quite small at about 400 million of CHF. Or if you prefer an accumulating version, you can get its sibling the UBS ETF MSCI World UCITS ETF (USD) A-acc ETF, which has the same TER of 0.10% but a size of about 1.4 billion CHF which is more reasonable.
If you can, you should probably invest in U.S. ETFs. Nevertheless, I want to emphasize something that many elitists will not tell you: Investing in a good portfolio is much more important than investing in the perfect portfolio!
If your broker does not provide you with access to U.S. ETFs and you do not want to change, then invest with European ETFs!
ETF Portfolio with bonds
Now, what is the best ETF portfolio with bonds for a Swiss investor?
We can take an example with a reasonable 20% bond allocation. This is a common bond allocation that does not decrease too much your portfolio returns and still reduces volatility.
There are two ways to integrate your bonds in your portfolio regarding your home bias (if you have any).
First, you could replace your home bias with the bonds part. Indeed, a Swiss bonds ETF would play a similar role to your home bias. In this case, you can opt for a portfolio with:
- 80% World ETF
- 20% Swiss Bonds ETF
If you want to combine Home Bias in stocks and Swiss bonds, you have to be careful about not having too much in Swiss stocks and bonds. So, you can either go 20% Swiss Stocks, 20% Swiss Bonds, and 60% World Stocks. If 40% allocated to Switzerland is too much for you, you could also opt for 10% Swiss Stocks, 20% Swiss Bonds, or 70% World Stocks.
Finally, I recommend iShares Swiss Domestic Government Bond 7-15 (CSBGC0) ETF. It has a 0.15% TER, manages about 250M CHF, and has been around for 20 years.
So, with US ETFs, this would give us this portfolio:
- 80% Vanguard Total World (VT)
- 20% iShares Swiss Domestic Government Bond 7-15 (CSBGC0)
And if you want to integrate a home bias ETF, you can bring back CHSPI into the mix to craft your perfect portfolio.
Conclusion
You should now have a good idea of what ETFs you need as a Swiss investor. You can now decide on your ETF Portfolio for Switzerland.
The ETF portfolios from this article are just examples of what I recommend. Of course, this portfolio may not be the best ETF Portfolio for everybody. But you should now know enough so that you can do your research and decide for yourself in which ETF Portfolio you want to invest.
And remember: investing in a good portfolio is more important than investing in the best portfolio. If you take years to decide on the best portfolio and delay investing, you lose out on some opportunities. It is better to get started with a good portfolio, and you can refine it over the years.
Of course, you must have a broker account to invest in your ETF Portfolio. If you do not yet have a broker, here is a guide on choosing the best broker account for Switzerland.
If you want more control over your portfolio, I have a guide on creating an ETF portfolio from scratch.
What do you think of this ETF Portfolio for Switzerland? What does your portfolio look like?
Recommended reading
- More articles about Investing Fundamentals
- More articles about Investing
- US ETFs are the best ETFs for Swiss investors
- Dollar Cost Averaging is more risky than you think
- My Investor Policy Statement – You Need One Too!
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Use a combination of VTI, VEA And VWO instead of VT. A bit lower TER in average, and you can underweight US if you want, but you have to do more transactions
Hi Robert
Yes, you can definitely do that and you will save a little on TER. But you will waste a little on transaction fees. It’s probably optimal if you have a large portfolio, but I would not bother with it personally since VT is already quite cheap.
I would really appreciate your explanation on how to recover 30% of US tax at source that gets deducted each time we receive dividends on US securities. The tax declaration form DA-1 seems to recover only 15% and not 30%.
Thanks in advance for your very useful articles that I enjoy reading since a few years now.
Hi Sanjiv,
In many cases, you can get this withholding down to 15% by filling a W8BEN which your broker should provide.
If your broker does not allow you to do that, you need to fill up two columns in your tax declaration. 15% is done through DA-1 and 15% through R-US.
You can see more details here: How to file your taxes with Swiss and foreign securities in 2025
Thanks Baptiste – stupid question but
1) how can I concretely verify whether my witholding is down at 15% thanks to W8BEN? I have sent interactive brookers my W8BEN but how can I check that they are getting me 15% back?
2) And other question: so the DA1 is enough – then the tax authorities will reimburse me for the tax withholdings? I thought that I need to contact each tax authoritiy separately – eg France for France listed stocks, UK for UK listed stocks etc
Not a stupid question :)
1) After you have received some dividends, you generate an activity statement in your account. There, you will see dividends and withholding, and you check whether the withholding is 15% or 30%.
2) No, only DA-1. There are some limits (minimum of 100 CHF) and some cantons apply some special rules to reimbursement. But overall, that’s it.
My apologies if this question has already been asked, but I did not manage to get through all the comments!
Actually I have two questions. Or maybe three.
The first is I often have trouble “finding” VT. For example, it doesn’t seem to be on justETF, is that right? https://www.justetf.com/en/how-to/invest-worldwide.html what am I missing?
Then, I think that I saw somewhere that the TER was 0.15 — would that mean I was not looking at the right stock?
And finally, the main question. You say here that the best world ETF for somebody using IB is VT. But what if this person is using a Swiss broker, like Swissquote? The transaction fees will be higher, and that the conversion fees will be higher from CHF, but aside from that, what would the reason be to not get VT if it’s available? And if VT is not the best choice in that context, what would be?
Hi Stephanie
1) VT is not on justETF because it’s a US ETF and justETF only focuses on European ETFs
2) Correct, it’s the wrong stock. The information about VT is on Vanguard website: https://investor.vanguard.com/investment-products/etfs/profile/vt
3) Even on Swissquote, VT remains the best ETF. You may have more transaction fees, sure. But on the long-term what matters is the product fees and the 0.07% TER plus the US dividend efficiency makes it the best World ETF available.
Oh, thanks so much!
Why do I have the impression that people are looking for “alternatives” to VT then, if VT is still the best option with a Swiss broker like Swissquote?
I don’t know. I am only using VT as my world ETF when possible.
But this is only one way of investing. Some people do not even use a World ETF, and far from everybody follows my portfolio (there are tons of valid portfolios available).
Hi Baptiste,
Small update regarding the “ETF Portfolio without U.S. ETFs”: UBS recently reduced most of their ETFs’ TER. You can now get their MSCI World UCITS ETF with a TER of 0.1% (ticker:UETW; ISIN: IE00BD4TXV59, https://www.justetf.com/fr/etf-profile.html?isin=IE00BD4TXV59). Much better than iShares Core’s VWRL at 0.22%.
Hi Thom
That’s a fair point, UBS now has some fairly well priced ETF. Even the distributing one is now at a 0.10%. It’s much smaller than the Vanguard or iShares fund, but it’s worth mentioning, I will update the list by adding UBS ETFs into it.
You’re right. The accumulative one has 1’443 m, though (which to me is big/safe enough to invest in).
Yes, 1.4B is fine indeed. And if you prefer accumulating one, it’s entirely decent!
Hi Thom,
You started well, but your last statement was contradictory. The VWRL is from Vanguard and tracks the FTSE All-World Index. So it tracks Developed Markets and Emerging Markets. Whereas the MSCI World “only” tracks the Developed Markets. So it’s not really comparable.
You’re right! But you can add a MSCI Emerging Market ETF to your portfolio (they usually trade at a TER of ~0.2%), which combined with the 0.1% MSCI World from UBS is cheaper than Vanguard’s VWRL at 0.22% for the same exposure.
“But currency hedging is expensive and is generally not the best tool for long-term investing”
That’s generally true for stocks (highlighting the “long-term” part, a different story in case of short-term), but quite the opposite for bonds. In that case hedging is definitely a reasonable approach – bonds are supposed to be a safe part of a portfolio, and hedging is the way to ensure it. Ofc we talk about foreign bonds here, as thanks to hedging we are not limited to CH bonds (and their downsides) anymore.
Hi robber
That’s a fair point. If you use hedged foreign bonds, you remove the main disadvantage of foreign bonds (being much more volatile in CHF than CHF bonds).
However, if you are searching for foreign bonds, you are searching for returns, so why not go all the way and use stocks? Even hedged foreign bonds will be more risky than Swiss bonds. Hedging itself is not perfect. And at least the payments will not be hedged.
But I do agree that this is one case where hedging could make sense.
“However, if you are searching for foreign bonds, you are searching for returns, so why not go all the way and use stocks? Even hedged foreign bonds will be more risky than Swiss bonds”
Not really – I buy neither local nor foreign bonds for any significant returns, but for financial protection in times of crisis. And generally, I also prefer local bonds – but negative Swiss bond yields could be a reason to look for CHF-hedged global alternatives. I don’t say it’s a better strategy – but the one where hedging is a useful mechanism 😉
Alright, it makes sense that way indeed!
@robber
hedging should cost roughly the same as the difference between the local interest rate and the foreign one (if you dont take fees into account). So even if Swiss bonds have negative or very low interest rates, it should not be possible to get a better CHF interest through foreign bonds + hedging (for bonds with similar risks). If it were possible then there would be an arbitrage opportunity (you could issue a bond and use the proceeds to buy foreign bond + hedging for a “free” profit)
As Baptiste correctly pointed out this strategy might only makes sense if you find some high risk / high yield foreign bonds for which there is no risk-equivalent CHF bond. But the stock market might actually be safer and have better returns than those junk bonds. Sound advice from Baptiste!
@Baptiste BTW you can in fact hedge the payments with interest rate swaps and forward rate agreements. However, those instruments are usually reserved for institutional and high net worth investors because of how expensive such strategies are. Another reason why bond hedging makes no sense for retail investors like us.
Hi Baptiste, you used to recommend a more risky allocation with VOO in the mix to over index the US market. What has led you to change this recommendation ?
I see you also start talking about bonds. Are you shifting to a more balanced strategy with total world exposition and partial bonds allocation ?
Hi Olimonn
I simply think that simplicity and diversification is better, so VT + home bias makes more sense.
If you want to increase risks (and potentially returns) with a bias to the US market, you can VOO to the mix. This is my portfolio, but you can make adjustments for yours.
As for bonds, I always had a 10% overall bond allocation. But currently, I cover this bond allocation with my second pillar.
Hi Baptiste, I’ve started investing thanks to your blog some months ago, and now I’m trying to diversify my portfolio. A very basic question here. Based on what do you calculate the % of allocation? Cost basis of each instrument at the buying moment, current market value, number of shares, etc? I get different numbers depending on which I choose, of course. Thanks!!
Hi Meux,
There are two important allocations:
* Your target allocation, which is part of your strategy
* Your current allocation, which is the proportion of each fund (at current market value) compared to the total market value of your portfolio.
Ideally, you want these two numbers to be close.
Hi Baptist, I look at the iShares Core SPI (CHSPI) Key Information Document. In addition to the yearly 0.1% management fee, there is a 0.02 yealy transaction fee. Then, there is a one-off 5% entry cost and 3% exit cost. Did I get it right? With kind regards. Gilles
Hi Gilles
Normally, the yearly transaction fee should be included in the TER (0.10%).
And the entry and exit costs do not apply to ETFs traded on the stock exchange.
Thank you for the clarification Baptiste.
Could you please comment a bit more in detail (beginner question) on (from your article): “In Switzerland, you will pay the same taxes for both, mostly a matter of preference. I prefer distributing funds to get the cash once I need it in retirement. And this cash will also help me with rebalancing.”
Hi,
I have commented in detail on the subject here: Distributing Funds vs Accumulating Funds: Which is better?