The best ETF Portfolio for Switzerland in 2024

Baptiste Wicht | Updated: 05 November 2023 |

(Disclosure: Some of the links below may be affiliate links)

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 can, you should probably invest in U.S. ETFs. But 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 give you 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?

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368 thoughts on “The best ETF Portfolio for Switzerland in 2024”

Remy says:

24 September 2023 at 8:14 pm

Hi Baptiste, why even bother asking Swiss exposure, if returns had been and is expected to be lower than the global market? Are you not interested to allocate into Global and combine with Developed/Emerging/US exposure instead?

Reply
1. Baptiste Wicht says:
  
  25 September 2023 at 5:59 am
  
  Hi remy,
  
  I am discussing this at length in Should you have a home bias in your portfolio in 2023?
  The main advantage of a Swiss ETF (home bias) is that it will be in the proper currency. That means that if the dollar where to fall significantly (like now), you would have 20% of your portfolio safe until it goes back up.
  But it’s entirely true that it’s a personal preference and many people do not have one.
  
  Reply
Tanya says:

16 September 2023 at 7:07 pm

Hi again! Your blog is so great! Why can I not find the Vanguard Total World ETF on International brokers? Sorry am new to this. Is it called something else?

Reply
1. Baptiste Wicht says:
  
  17 September 2023 at 5:21 am
  
  Thanks Tanya!
  
  Are you talking about Interactive Brokers? You should be able to find it normally. You can try searching for VT.
  
  Reply
Guido says:

3 August 2023 at 7:09 pm

Hello Baptist and thank you for the great content.
Could you kindly elaborate your rationale on CHSPI vs SMICHA vs SMMCHA?
I am asking because few years ago I closed my True Wealth account and built a very similar portfolio on IB.
As Swiss stocks ETF True Wealth used SMICHA and so now I have a fairly large lot of if on IB. Does it make sense to move to CHSPI?
I understand the difference of the two underlying indexes but is the difference so significant?
Moreover on another similar blog site, it is suggested to invest into SMMCHA instead.
I would appreciate your opinion on this.
Thank you again.
Cheers,
Guido

Reply
1. Baptiste Wicht says:
  
  4 August 2023 at 6:26 pm
  
  Hi,
  
  You should read my article about Swiss stock indexes: Swiss Stock Market Indexes – SMI, SPI and SLI
  Basically, the SPI is a larger index than the SMI. That’s the difference betwee investing in 20 shares and 225 shares. However, it’s true that given the weight of the three stock giants (Nestle, Novartis and Roche), some of that added diversification is lost.
  SMMCHA is using the SMIM index which is medium companies smaller than the companies in the SMI. It’s an interesting index, but for me, it should not be invested alone. SMI + SMIM makes sense because it allows to weigh some smaller companies compared to the SMI or SPI.
  
  But there is nothing wrong investing in SMI. The historical differences between the indexes is quite low.
  
  Reply
  1. Guido says:
    
    6 August 2023 at 4:29 am
    
    Thank you Baptiste (sorry for the typo on your name in my first comment).
    Indeed you are confirming what I guessed. The performance of the SMI and SPI indexes is quite overlapping.
    At this point the main difference is the TER of the related ETFs, which is 0.10 for CHSPI and 0.20 for the SMICHA.
    Thank you again.
    Cheers
    Guido
  2. Baptiste Wicht says:
    
    6 August 2023 at 6:09 am
    
    No problem about the typo, this happens a lot :)
    
    Yes, very small differences in the end. But 0.10% fee could make some difference in the very long term although it will not be life changing.
2. Tony says:
  
  8 August 2023 at 11:28 am
  
  The provision for the core spi CH to buy on ibkr seems extremely high.
  
  It is 5 CHF per order. This really reduces the return if you only invest a couple hundred every month.
  
  Is there a way around that?
  
  Reply
  1. Baptiste Wicht says:
    
    8 August 2023 at 1:41 pm
    
    Hi Tony
    
    Unfortunately, this is per order indeed. The Swiss stock exchange is quite expensive :(
  2. Hans-Peter says:
    
    7 September 2023 at 3:01 pm
    
    I regularly buy the CHSPI via Flowbank. The fees are negligible. Maybe you would like to take a look at Flowbank.
Bruno says:

29 July 2023 at 6:38 pm

Hi Baptiste,

I just wanted to say that your blog is great! I learned so much from it. You have a good way of explaining things in a simple and engaging way. Thanks for sharing your insights and tips with everyone. You rock!

On the technical side, I tried to use RSS but I
‘m getting a permission problem, is this on purpose? I would like to add this to my list of feeds I read.

Regarding the ETF, have you used or considered the VOO US ETF?

Cheers,
B

Reply
1. Baptiste Wicht says:
  
  30 July 2023 at 7:20 am
  
  Hi Bruno,
  
  Thanks for your kind words.
  
  Normally, the RSS feed should work. Could you try again and contact me (email here https://thepoorswiss.com/imprint/) if it still does not work.
  
  VOO is interesting but only invests in the US. I’d rather have international diversification.
  
  Reply
Georgi says:

27 July 2023 at 2:04 pm

Hi Baptiste. If Vanguard S&P 500 is available with Interactive Brokers in CHF, why have it in USD?

Reply
1. Baptiste Wicht says:
  
  30 July 2023 at 7:13 am
  
  Because VOO is always in USD. The difference you are talking about is the trading currency. You are still exposed to the same currency risk.
  
  Reply
Noah says:

27 June 2023 at 9:41 pm

Hi Baptiste
Thanks for your advise and ongoing effort. Do you buy CHSPI via IB or SQ? Thanks again.

Reply
1. Baptiste Wicht says:
  
  28 June 2023 at 5:01 am
  
  Hi,
  
  I currently buy everything with IB.
  Once my portfolio has grown, I plan on having a second broker account, likely SQ, but for the time being a single broker is enough for me.
  
  Reply
  1. Max says:
    
    30 July 2023 at 12:42 pm
    
    Hi Baptiste
    
    I was wondering about your point regarding establishing a second broker account once exceeding a certain investment volume.
    
    Can you elaborate on why you would open a second broker account at some point and what the value threshold you are thinking about is?
    
    That would be really helpful :-)
    
    Thanks and best regards
    Max
  2. Baptiste Wicht says:
    
    31 July 2023 at 6:09 am
    
    Hi Max,
    
    My current thinking is 500K CHF before opening a second account. But I am not entirely sure about that either. And while I am thiking of moving to Swissquote, probably for Swiss ETFs only, I am not yet set either.
Ana says:

20 June 2023 at 12:03 pm

Hi Baptiste,
Thanks as always for all the good tips. I use it as second opinion which is super helpful.

I would like to get your view on the following: Where would you invest in case you inherit i.e. 300-400.000 CHF? Would you do a one time investment in the proposed ETFs or would you rather slice it and invest in chunks over a period of time to avoid the risk of potential market downturn?
Thanks for your thoughts.
Best,

Ana

Reply
1. Baptiste Wicht says:
  
  21 June 2023 at 4:59 am
  
  Hi Ana,
  
  In my case with a high risk capacity and a long-term investment, I would either do:
  1) Invest everything in my broker account into the same portfolio at one time.
  2) Split the money between ETF and a real estate investment.
  
  But yes, I would invest at once. But again, I have a high risk capacity and a long term horizon.
  
  Reply
  1. Marco says:
    
    21 June 2023 at 7:30 am
    
    Hi Baptiste,
    I keep hearing the suggestion about investing in real estate…but what does it mean in practical terms? Can you be more specific?
    I’m assuming we are talking not about our house/apt purchase.
    Thanks again for everything you are doing for us :)
  2. Baptiste Wicht says:
    
    21 June 2023 at 1:35 pm
    
    hi marco,
    
    In the future, I am thinking of buying an apartment and renting it out to other people.
    This is the kind of real estate investment I am considering. But there are other ways: 5 Simple Ways to Invest in Real Estate in 2023
Marco says:

4 June 2023 at 12:59 pm

Thanks for everything! I was about to fall in the usual trap of the insurance 3B and other brilliant “managed” financial products, but your blog saved me! really thanks!
As now in IB we can buy again US ETF, is the list of ETF you suggested here still valid, or should something change? tnx

Reply
1. Baptiste Wicht says:
  
  5 June 2023 at 11:26 pm
  
  Hi Marco
  
  Not sure I saved you, but I may have saved you some money :)
  
  Yes, that should still be valid, VT + CHSPI is still what I use.
  
  Reply
  1. Marco says:
    
    6 June 2023 at 9:59 am
    
    thanks for the quick reply. I’m using the 5 ETF you suggested.
    I have another question if you don’t mind…
    when I select the asset you suggested, IBKR asks me from which stock exchange I should buy it.
    I searched online but I couldn’t find much regarding which stock exchange is better.
    Should I just pick the asset from the larger stock exchange?
    Any tip on choosing the ticker(?) will be appreciated.
    thanks again for everything you are doing!
  2. Baptiste Wicht says:
    
    6 June 2023 at 11:40 am
    
    For VT, normally you don’t have a choice, it’s on NYSE/ARCA.
    For CHSPI, it should be on SIX.
    
    I only suggest two ETFs, what are the other 3?
  3. Marco says:
    
    6 June 2023 at 1:51 pm
    
    Hi Baptiste. Am I missing something?
    I was following what you suggested here. is it not valid/worth anymore?
    https://thepoorswiss.com/etf-portfolio-european-etfs/
    
    Swiss Stocks: 20%: iShares Core SPI ETF (CHSPI): TER of 0.10%.
    U.S. Stocks: 50%: Vanguard S&P 500 UCITS ETF: TER of 0.07%.
    Pacific Stocks: 10%: iShares Core MSCI Pacific ex-Japan UCITS ETF (Acc): TER of 0.20%.
    Europe Stocks: 10%: iShares Core MSCI Europe UCITS ETF: TER of 0.12%.
    Emerging Markets Stocks: 10%: iShares Emerging Markets UCITS ETF (Dist): TER of 0.18%.
    
    thanks again! :)
  4. Baptiste Wicht says:
    
    6 June 2023 at 11:56 pm
    
    Hi marco,
    
    It’s valid if you are not using US ETF. If you are using US ETF, it’s much simpler.
    
    For these 5 portfolios, it first depend on which currency you want them. The Vanguard S&P 500 is available in USD, CHF, GBP and EUR. I prefer to hold funds in their holding currency, so for me USD would be best in that case. Out of the two remaining exchanges, the LSE would be best because of its large volume. That’s my thought process for choosing.
Dan says:

7 May 2023 at 11:33 am

Thank you for your post, it’s been incredibly useful following your blog.

How does the Pillar 3A strategy fit into the portfolio?

Do you recommend maxing out the account and rebalance your stocks accordingly?

For example, Global 100 VIAC has a 40% Swiss allocation, which means that it would go towards lowering the CHSPI allocation in Stocks on IBKR.

I have been investing 100% in VT in the past couple of years but only now started thinking about currency risk/fluctuation and would like to add some CHF that I kept cash to my portfolio, but struggling to get a good benefit/costs analysis when comparing buying CHSPI from IBKR vs Global 100 in VIAC.

Reply
1. Baptiste Wicht says:
  
  7 May 2023 at 6:24 pm
  
  Hi Dan,
  
  Ideally, you would want your overall portfolio to match your portfolio (80/20 in my case).
  
  I would say it depends on how much you have in your 3a compared to your stock portfolio. For me, my 3a is less than 10% of my stock portfolio. So I simply consider my stock portfolio alone with its 80/20. Over time, this may change and I may readapt so that I will have lower stocks in my stock portfolio.
  On the other hand, if the 3a makes a good portion of the free net worth, it should definitely be considered.
  
  In any case, I also keep a full overall view of my assets where I look at everything. For instance, in here, my second pillar plays the role of my bonds. And I currently have some much in CHF with my house, second pillar and some stocks, that I don’t want to have too much CH stocks in my IB account.
  
  Reply
Helga says:

1 May 2023 at 10:12 am

Now that I can’t invest in VT anymore and will go back to investing in European ones until this gets sorted out, I wonder: why “Vanguard FTSE All-World UCITS” and not “iShares Core MSCI World UCITS”? It’s true that the latter is accumulating and whoever wants dividends might not like that, but the TER is slightly lower and the fund is 5x larger (in terms of assets under management).

Reply
1. Baptiste Wicht says:
  
  1 May 2023 at 11:52 am
  
  Hi Helga,
  
  Don’t rush to changing your portfolio, we may get back US ETFs soon. Any rush change is bad in investing.
  
  Reply
  1. Max says:
    
    3 July 2023 at 11:30 am
    
    Hi Baptiste
    
    Awesome blog, thanks so much!
    
    Would still be interested in an answer to Helga‘s question regarding the two European ETFs, if you have any thoughts on it.
    
    Best regards
    Max
  2. Baptiste Wicht says:
    
    4 July 2023 at 10:49 am
    
    I don’t have much thoughts into it, but I would use Vanguard FTSE All-World if I had to use an European ETF. I would use the version in USD.