The best ETF Portfolio for Switzerland in 2026
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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 has 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 stocks 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 sense 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 up 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 in 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 US ETFs. 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. ETFs. 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 as 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 to 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 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 your portfolio returns too much and still reduces volatility.
There are two ways to integrate your bonds into 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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Hi Baptiste,
it was very interesting post.
I use IBKR and I have VOO and VT stocks and bought last year. (Nov 2024) it’s been a year and people say VOO has increased 9-10% but because USD got less worthy than CHF, it only increased 1.76% in CHF. What do you think about this? and would it be worth it to consider hedged fund regarding this?
Hi Grace
I am glad you like it :)
I think one year is too short to draw any conclusions :)
It’s true that the last 12 months or so were bad for exchange rate. But it was not always that bad.
In the long term, a Swiss investor should expect lower returns than a USD investor.
If you need hedging to sleep, then it becomes interesting, but I don’t believe it’s necessary for the masses.
hey my wife doesn’t want to invest in VT because she saw Enron there – is there any sustainable global ETF that you would recommend, that includes oil and gas and military and so on?
Marco
Hi marco
Maybe CRBN ETF from iShares?
If you prefer Vanguard, I think you will have to use multiple ETFs to cover the whole world properly.
Keep in mind that these ETFs are rather limited, they will avoid some companies, but not all.
Hi Baptiste,
Great article — really appreciate how clearly you explain things!
I’m based in Switzerland too, and following your example I’ve been investing a bit in both USD-denominated ETFs (like VT) and CHF ones (like CHSPI).
Out of curiosity, I built a small tool to compare their performance in the same currency (CHF):
https://etfx.net/tools/instrument-comparison?currency=CHF&etfs=VT%2CCHSPI.SW&period=10Y&priceType=adjusted
It’s interesting to see that over the past 10 years, once you look at the dividend-adjusted prices, the two ETFs have been extremely correlated — it wouldn’t have made much difference which one you picked. Of course, that’s a simplification since dividends are taxed differently, but overall it also shows how correlated the markets are.
Hi Davide
I am glad you like it!
You built that tool yourself? It looks great.
The results are indeed interesting. There is only 17% more for VT over 10 years, I would not have expected it. That’s still almost 2% per year.
The results over 20 years are more conclusive.
Yes, thank you!
Unfortunately the data for CHSPI goes back to 2014, so with only 11 years of data the 20y comparison with VT is not entirely fair.
I’m wondering if the 17% gap will narrow as well in the future.. will see!
It may narrow or expand mostly based on currency changes I think. But only time will tell :)
Hi Babtiste.
Been considering lately adding a dividend yielding element to my portfolio.
At what point would you consider – deliberately building up a position that provides a monthly income.
Hi Jo,
Honestly, I would not consider it myself. I think that since capital gains are more tax efficient, I’d rather not focus too much on dividends.
Hello Baptiste
Currently I have a SAXO account with a portfolio fo 75% VT + 25% CHSPI. However, I have some headaches due to US estate tax so I am thinking about switching the VT part to ETFs domiciled in Ireland. The CH part I will keep unchanged at 25% so I will not consider it in the following calculations.
VWRL at 0.19% is rather expensive.
I looked at ACWI which would cost 0.12% TER. I know it follows a different index (MSCI All Country World) but in the end they are both world indexes, so I think it does not really matter that much?
Then I was looking at two different funds for world part.
90% WRDUSY (MSCI World) at 0.06% TER
10% XMME or EMEI (Emerging markets) at 0.18% TER)
So weighted TER would be 0.07%.
Does the TER difference of 0.05% justify the effort of dealing with three instead of two ETFs in your opinion?
Or would you still stick with VRWL even though it is the most expensive one?
Cheers
Fred
Hi Fred
Just make sure you consider that you will lose 15% of US dividends by doing so. But if you value the simplicity of avoiding US estate tax more, this is perfectly fine!
Isn’t ACWI 0.32% TER? https://www.ishares.com/us/products/239600/ishares-msci-acwi-etf
VWRL is indeed a tad expensive, but I would still use it for the sake of not having to use two ETFs.
WRDUSY is decent but a bit small (18x smaller than VWRL and 3x less companies in the index). But the price is really good. Then, you can indeed either add emerging markets or not.
What do you value the most? Simplicity (pick VWRL) or price (pick WRDUSY+EM ETF).
Hi Baptiste
Thanks for your reply. Yes the dividend loss I am aware of but its ok as it gives my a better state of mind.
Regarding ACWI I referred to this one which has a TER of 0.12%: https://www.justetf.com/en/etf-profile.html?isin=IE00B44Z5B48#overview
In the end I certainly prefer simplicity. Thus, I will probably go with VWRL. I also looked into the rather new FWRA (https://www.justetf.com/en/etf-profile.html?isin=IE000716YHJ7#overview) which follows the same index at 0.15% TER. But I might just wait a bit, see how it develops (fund size seems to grow quite fast) and maybe start buying that in future, depending how TERs of both develop.
Cheers
Fred
Acronyms are confusing; ACWI is both the ETF and the index :)
Yes, the SPDR fund is good in that case. I prefer distributing funds rather than accumulating, but this is mostly down to personal preference. I would choose SPYY over FWRA.
If you are fine with accumulating funds, SPYY is a good option, and you will save on fees. But VWRL is a solid bet too.
Hi Baptiste
Many thanks for your feedback. Based on that and some further research and calculations I think I will go with SPYY from now on.
Cheers
Fred
Hi Baptiste, Thank you for all these precious information. In my case, I wish to retire in 15 years as a swiss resident. And I wish to start investing in ETFs now. Should I start with a first consequent investment and then a monthly investment or should I invest only monthly, taking in consideration the volatile market? Elsewhere, I am investing in a 2nd pillar. Thank you for your advice. Navid
Hi Navid,
Congratulations on thinking to start to invest.
In general, dollar cost averaging is not worth it because the market goes up more than it goes down. But if it makes you feel better to average it out over 12 months maybe, it will be fine. It’s more a matter of personal preference and risk capacity.
Hello Baptiste,
Thank you for your answer.
Dear Babtiste.
I am a big fan of your ETF portfolio with US-ETFs.. and have modelled my portfolio on your 80:20 Portfolio (VT:CHSPI).
Recently I have come across the question regarding US Estate Duty. This is a risk for Non-US citizens who have more than 60,000 USD invested in US-domiciled funds (like VT, for instance). I would love to know how you have considered this in your portfolio and perhaps why VT is still your default as apposed to its UCITS counterpart (for example VWRL)
Hi Jo,
I have considered this :) And fear not, the limit is not 60K but more than 10M: Should Swiss investors worry about the US Estate Tax in 2025?
Thanks Baptiste. Really enjoy your detailed research.
Isn’t it better to invest in an accumulating ETF rather than a distributing one from a tax perspective? I’m new to this topic but was wondering why pick one over the other. Is there a good alternative for VT that is accumulating?
Hi Jan,
Actually, in Switzerland, both options have the same tax efficiency.
I wrote about this a while back: Distributing Funds vs Accumulating Funds: Which is better?
Hello, since you live in CH and will most likely retire here, why haven’t you considered investing in CHF ETFs that track similar to VTI and VT? Like iShares MSCI World CHF Hedged UCITS ETF (Acc) | IWDC, or iShares S&P 500 CHF Hedged UCITS ETF (Acc) | IUSC , or iShares MSCI EMU CHF Hedged UCITS ETF (Acc) | EMUC? Isn’t there a big risk of always converting to USD to invest (if you live your life in CHF)? What if, when you retire, the USD/CHF exchange rate is very unfavorable?
Hi Jessica
There are multiple reasons:
1) US ETFs are much more efficient: US ETFs are the best ETFs for Swiss investors
2) Hedging does not help in the long term: Should you use currency hedging in your portfolio?
3) You cannot entirely protect against variations because companies themselves will be impacted.
Hi Baptiste,
Thanks for all the great work in the blog!
I have a question: does the current situation in the US and overall market behaviour makes you reconsider your current portfolio to mitigate the risks?
Regards,
Galina
Would be interested in this as well!
Hi Galina
No, it does not. I believe that international diversification is the best we can do and we should not change portfolio based on world events.