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On this page, you will find the most Frequently Asked Questions (FAQ) by my readers. When I receive the same question many times, I will put it here. This page will grow over time.
Why do I recommend U.S. ETFs?
For Swiss investors, U.S. ETFs are the most efficient ETFs. I have talked about this in several articles and people asked me many times why this was the case.
I have an entire article that will tell you why U.S. ETFs are the best for Swiss investors.
What do I think about Trading 212?
Many people ask me what I think about the Trading212 broker. I have never done a full review of Trading212. But here are my thoughts on the service.
The service looks interesting, and the fees are reasonable. But this is compensated by a large spread between the buy and ask prices.
I do not like the fact that they focus on CFDs. For me, this instrument should never be used.
Trading 212 does not give you access to the Swiss Stock Exchange. As a Swiss investor, I do not want to invest with a broker not giving me access to our local stock exchange.
Overall, the reviews look positive, and the service looks legit. But it is a bit young and too shiny for me.
Which Swiss bank for a foreigner?
Many non-residents want to open a bank account in a Swiss bank for safety.
Unfortunately, because of regulations, most Swiss banks refuse to open bank accounts for non-residents.
From what I know, only a few big Swiss banks are still accepting non-residents. A good bet would be to go with UBS or Credit Suisse. But you should not expect to have excellent conditions. You will probably have to pay fees, and there may be some high minimums to open an account.
Which Swiss bank for an L-permit?
Some workers are in Switzerland with only an L-permit (short-term). These workers still need a bank account in many cases.
Unfortunately, many banks do not accept L-permit, only B and C residency permits. This is the case for the best digital Swiss banks.
With an L-permit, big Swiss banks like UBS and Credit Suisse are the best bet to open an account while in Switzerland. The conditions may not be excellent, but it is probably the best choice available.
Where to buy VWRL (How to choose stock exchange)?
The problem with European ETFs is that they have several listings on different stock exchanges. Many people have asked me which exchange they should buy the VWRL ETF (Vanguard World ETF for Europe). But this question has exactly the same for each UCITS ETF.
For instance, VWRL has one listing in London Stock Exchange (LSE), one in the German Stock Exchange (XETRA), and one in Euronext Amsterdam. There are a few important things to know about this. First, all the listings are for the same fund. You will still have shares of the same fund. There is no difference in the currency risk! Regardless of the trading currency, the holding currency remains the same.
Second, you need to be careful about the trading currency. VWRL is available in USD, EUR, CHF, and GBP. But again, the fund is the same, and VWRL holds USD. So regardless of the listing, you will be exposed to USD currency. What changes in the trading currency is what currency you use to buy. Basically, it will make a direct conversion for you.
So, first, you will have to decide in which currency you want to trade. Once you have decided, you can choose any stock exchange with a decent trading volume. If we take the case of VWRL, if you want USD, you can use the London Stock Exchange (bigger than the Mexican Stock Exchange).
My strategy is to always buy an ETF in the currency it holds. So, I would only buy VWRL in USD. That way, I have a better view into which currency I hold. However, the difference is not very signficant.
Keep in mind that I do not use VWRL myself. I recommend Swiss investors to invest in U.S. ETFs, like Vanguard Total World (VT) instead.
What are the consequences of Brexit for Swiss investors?
There was a lot of information about Brexit and Interactive Brokers (IB). And there was a lot of wrong information around.
The problem is that the main entity of IB is in the United Kingdown which just left the EU with Brexit. So, the regulations are changing and this entity cannot keep customers from the EU.
Currently, nothing is changing for Swiss investors. Many European investors will see their IB accounts being moved out of IB UK into other European Entities. But Switzerland is not part of the European Economic Area (EEA), so nothing will change.
Interactive Brokers could still decide to move Swiss investors to simplify their system, but there is no legal reason to do it for now. And there has been no communication regarding that so far.
So for now, Interactive Brokers is still the best broker available for Swiss investors, and nothing changed!
Does IB charge negative interest on CHF?
When you open an Interactive Brokers account as a Swiss investor, you get a warning that CHF balances carry a negative interest rate. Fortunately, this negative interest rate is currently only charged on balances higher than 100K CHF. So, it means you can keep a lot of cash on IB without worrying about negative interest rates. But if you have more than 100K CHF, you will pay negative interest on this amount. You can see the official information from IB.
Note that this only applies to CHF cash, not to invested assets.