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The best ETF Portfolio for Switzerland in 2024

Baptiste Wicht | Updated: |

(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:

  1. 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.
  2. 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:

  1. 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.
  2. 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.
  3. 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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Baptiste Wicht started thepoorswiss.com in 2017. He realized that he was falling into the trap of lifestyle inflation. He decided to cut his expenses and increase his income. This blog is relating his story and findings. In 2019, he is saving more than 50% of his income. He made it a goal to reach Financial Independence. You can send Mr. The Poor Swiss a message here.

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

  1. Hi Baptiste,

    In this time of high stock market volatility (interest rates, inflation, …), do you still monthly invest the same amount in the ETFs you list in this post? Sometimes I am wondering whether it is not better to wait until the large uncertainties are getting less pronounced (although I also realize we cannot predict this).

    Thanks!

    Reply

    1. Hi Espresso,

      Yes, nothing changed in my investing. As you said it, we cannot predict where this will go. Periods like this are a way to get more shares for your money. If you are investing for the long-term, this is what matters.

      Reply

  2. Hi Baptiste,

    Thanks for the all the info! I do have a few questions maybe you can help out on.

    1. How and how often do you make “purchases”? Until know I’ve simply had a recurring amount that leaves my bank account the last day of every month and goes to another account which automatically invests it in the “Raiffeisen Index Fonds – SPI®”. Is this sort of what you do?

    2. I’m struggling a bit with the decision between VT and VTI/VOO + VXUS. Like you, I like simplicity and therefore VT. But I’m also a bit skeptical about the idea that the whole world has to do well to do well yourself. I’ve heard the advice of just setting your money in the SP500 and forgetting it and letting it compound over 20 years, I haven’t heard of investing in the whole world.

    Reply

    1. Hi Charles,

      1) I invest the days after I receive my salary, usually, the day after or on the same day depending on the time my transfer to IB happens.
      2) On the other hand, if the US does not do well while the world does (China takes over the world economy for instance or the US gets nuked, or whatever), having a world ETF will perform better. But in general, with globalization, the S&P500 is a relatively good proxy for the world performance.

      Reply

      2. Hi Charles,

        Yes, I feel like the iShares one (CHSPI) is significantly better than the Raiffeisen one. CHSPI has 0.10% in fees while the Raiffeisen Fund has 0.43% fee, four times more expensive.

  3. Good morning BAPTIST. thank you for all the info in your blog.
    I was wondering to know more about how do you do to avoid the high commission IB charge for buying the CHSPI. I was checking that every purchasing of this Etf from the brokerage account cost about 3,50 USD. Thats a lot. How do you normally buy it and how frequent? Also, when you buy ETF VT, you have to convert Chf into USD. Any idea on how reduce those commissions?

    Also, I was wondering to know if you have done any post regarding the calcul of our portfolio % annually returns/viability.

    Thank you in advance for your help.
    Dolores

    Reply

    1. Hi dolores,

      Indeed, trading Swiss ETFs is not cheap. Since CHSPI is 20% of my portfolio, I usually buy it about once every 5 months (1/5=20%).
      As for conversions, I don’t optimize. I don’t care about paying 2 USD for a conversion that is usually several thousand CHF.

      I am not sure I understand the last question. I usually let IB tell me about my returns.

      Reply

  4. Hi, all

    Seems there is no good reason to invest in VT. Better use VTI plus VXUS instead, at a conventient ratio. Saves 1/3 in TER and adds flexibility.

    Cheers, Sam

    Reply

    1. There are several good reasons for me to invest in VT:
      * It’s simpler to invest in one fund than two
      * I don’t have to guess the ratio between and I don’t have to update this ratio over time

      at these small percentages, the difference in fees is really minimal.

      Reply

  5. Dear Mr. Swiss,

    I hope all is well.

    I love your blog, you provide precious information for people like me, who don’t understand a lot in this matter.

    I read your article about taxes and I have some confusion about dividend taxation.
    I would like to invest in this ETF:

    UBS ETF (IE) MSCI ACWI ESG Universal UCITS ETF (hedged to CHF) A-acc

    , it does have dividend accumulation, and it is listed on that website that you told to check one’s ETFs.
    Do I need to pay taxes on those dividends even if they are automatically reinvested?

    Thank you, stay safe!

    Victor

    Reply

    1. Hi,

      Thanks for your kind words!

      I don’t have any thoughts on this ETF, the price is reasonable (0.33%) for an ESG ETF.
      Yes, you will have to pay taxes on these dividends. This is the same for any ETF in Switzerland.

      Reply

      1. Hi Baptiste,
        Thanks for your great articles and for hel with financial education.
        I’m just learning about all this, so please forgive my confusion: “your” VT and “any other ETF in Switzerland” are paying taxes, right? And your VT is also paying dividends if I understood correctly from your post. If so, what is the difference (Swiss tax related, except TER) between your VT and Victor’s ETF, please?

      2. Hi,

        You will have to pay taxes on dividends paid by any ETF (VT and any other ETF in Switzerland, any ETF in the world).
        The difference between VT and Victor’s ETF is that Victor’s ETF is not distributing ETFs but accumulating them. There is a common misconception in Switzerland where people believe they do not have to pay taxes on accumulating ETF, which is wrong. So, we pay the same taxes on the distributing and accumulating ETF.

  6. Hi Baptiste,

    many thanks for your excellent Post!

    I have a question for you, assuming you’d be also comfortable with 3a funds. In case, which one of these 3 would you find more suitable and performing for a long-term investment (say 15-20 years)?

    1-VIAC Svizzera 100
    2-HELVETIA ALLEGRA 85 – Classe R1
    3-Swisscanto AST Avant BVG Responsible Portfolio 95 QT CHF

    Many thanks in advance in case!
    Luca

    Reply

  7. Hey,

    thanks a lot for all your post, I have learned a lot through them.

    I was wondering for the 80% is there any advantage for a Swiss investor to chose Vanguard Total World (VT) over S&P 500 ETF (VOO)? I was comparing TER’s 0.07% vs 0.03% and Volume, and VOO seems to be better (?). What are your thoughts on this? Did you chose VT in order to be less conservative? or not sure how the facts that VT is seems cheaper affects on the long term (?).

    Thanks a lot!

    Reply

    1. Hi Maria,

      Yes, there is an advantage: VT invests in the entire world while VOO invests only in the United States. This means that if there is US recession without a global recession, VT will perform better than VOO.
      However, many people in Switzerland and Europe are investing solely in VOO.
      With globalization, VOO is quite interesting. If you want to increase your returns and lower your fees, you could do a mix of VT and VOO, like 20% VOO, 60 VT and 20 CHSPI. Or you can find your own mix of course :)

      Reply

  8. Hello,

    I wanted to have your advice on the following regarding ETF portfolio:

    You suggest Vanguard VT which is a great product to me but the Vanguard VTI (US companies only) has a bigger size in term of net assets and the fees are lower.

    So being in Switzerland, why not include VTI in the portfolio being for example:

    Vanguard VT 60%
    Vanguard VTI 20%
    iShare CHSPI: 20%

    What would be your advice on this portfolio?

    Thanks!

    Sébastien

    Reply

    1. Hi Sébastien

      It’s just more complicated to have three ETFs than two. And having 20% VTI will not make any significant difference on your fees.
      But sure, your portfolio would work.

      Reply

      1. good morning,
        What are those complications you see by holding more than two ETFs, appart from the possible commissions?
        thanks

      2. Hi

        It’s not complications, but it’s simply more “complicated” have to invest in 3 instruments rather than 2 instruments. I prefer simple.

  9. Hi Baptiste,
    I can only use ubs as a broker and I don’t have access to VT. I can only buy ubs funds so I would like to find something similar. The closest I found is “UBS (CH) Investment Fund – Equities Global Passive W”:

    https://www.ubs.com/ch/en/asset-management/private-investors/funds-prices/product-details/ch0356507415.html

    https://www.swissfunddata.ch/sfdpub/en/funds/detail/75498

    Would be very grateful to know your opinion about this fund and whether you would consider it a decent alternative.

    Some more information about my situation:

    – I would like to hold long term and DCA every month.
    – I have preferential conditions (0 custody fee and 0 transaction fee).
    – I can live with the higher TER (0.24 ubs vs 0.07 VT)

    Thank you and best regards,
    John

    Reply

    1. Hi

      This fund looks reasonably good. With your preferential conditions, I think it makes sense.
      0.24 TER is still good, not great, but good! This is much better than what most people pay.
      Just so you know, this fund does not include emerging markets. So, if you want to diversify into emerging markets, you may want to include an extra fund for that.
      And it also does not include Switzerland, so maybe you want an extra one for your home bias, if any.

      Reply

      1. Thanks for the very helpful reply! I might have to leave emerging markets out. I would have considered it but couldn’t find one that fits the bill on my limited list of funds..

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