ETF Investing in Switzerland 2025: Complete Beginner's Guide

Exchange-Traded Funds (ETFs) have revolutionized investing in Switzerland, offering an accessible, low-cost way to build wealth. With traditional bank savings accounts offering near-zero interest rates (0.1-0.5%), ETFs provide an attractive alternative for long-term wealth building. Whether you're saving for retirement, a house, or financial independence, ETF investing can help you reach your goals.

Data: December 2024

What Are ETFs?

Definition

An Exchange-Traded Fund (ETF) is an investment fund that:

• Tracks an index (like Swiss Market Index or S&P 500)
• Trades on stock exchanges like individual stocks
• Holds a basket of securities (stocks, bonds, commodities)
• Offers instant diversification
• Has very low fees (0.05-0.50% annually)

ETFs vs. Other Investments

Feature	ETF	Mutual Fund	Individual Stocks	Savings Account
Diversification	High	High	Low	N/A
Fees	Very Low (0.05-0.5%)	High (1-2%)	Low (transaction only)	None
Minimum Investment	CHF 100+	CHF 1,000-5,000	1 share	Any amount
Liquidity	High (sell anytime)	Medium (daily)	High	Very High
Returns (10-year avg)	6-8%	5-7%	Varies widely	0.1-0.5%
Risk	Medium	Medium	High	Very Low

Why ETFs Are Perfect for Swiss Investors

1. Low Costs

Swiss banks charge high fees for actively managed funds (1.5-2.5% annually). ETFs cost only 0.05-0.5%, saving you thousands over decades.

Example (CHF 100,000 invested for 30 years):

• Active fund (2% fees, 7% gross return): CHF 432,000
• ETF (0.2% fees, 7% gross return): CHF 710,000
• Difference: CHF 278,000 lost to fees

2. Tax Efficiency

• Swiss-domiciled ETFs have favorable tax treatment
• Dividend withholding tax can be partially reclaimed
• Capital gains are tax-free for private investors (no professional trading)

3. Accessibility

• Start with as little as CHF 100
• No minimum balance requirements
• Trade anytime during market hours
• Online brokers make it simple

4. Transparency

• You always know exactly what you own
• Real-time pricing
• Published holdings
• No hidden fees

Best Online Brokers for Swiss Investors

Comparison of Top Platforms (2025)

Broker	Trading Fee (Swiss ETF)	Custody Fee	Min. Investment	Best For
Interactive Brokers	0.05% (min CHF 3)	Free	No minimum	Advanced investors
Swissquote	CHF 9 + 0.2%	0.075%/quarter	CHF 1,000	Swiss comfort
Cornèrtrader	CHF 10 + 0.1%	Free	No minimum	Low-cost trading
PostFinance	CHF 24	0.16%/quarter	CHF 2,000	Beginners
Yuh	CHF 0.5 (CHF 500-2,000)	Free	CHF 25	Mobile-first, beginners
Neon Invest	0.5% (min CHF 1)	Free	CHF 25	Young investors
Saxo Bank	From CHF 10	0.12%/year	No minimum	International focus

Detailed Broker Reviews

Interactive Brokers (IBKR)

• Best for: Serious investors with CHF 10,000+
• Pros: Lowest fees, huge selection, global access
• Cons: Complex interface, US-based (additional paperwork)
• Total cost example: CHF 500/month = CHF 30/year fees

Yuh (powered by Swissquote)

• Best for: Beginners, small regular investments
• Pros: Super simple app, very low fees for small amounts, Swiss-based
• Cons: Limited advanced features
• Total cost example: CHF 500/month = CHF 36/year fees

Swissquote

• Best for: Those who value Swiss quality and service
• Pros: Full-featured, excellent Swiss customer service, bank integration
• Cons: Higher fees than competitors
• Total cost example: CHF 500/month = CHF 120/year fees

Best ETFs for Swiss Investors

Core Portfolio ETFs

1. Swiss Market Exposure

ETF	Ticker	TER	Description	Domicile
iShares Core SPI	CHSPI	0.10%	Entire Swiss stock market (200+ companies)	Switzerland
UBS SPI	SPICHA	0.15%	Tracks Swiss Performance Index	Switzerland

When to use: 20-40% of Swiss-resident portfolio (home bias, currency matching)

2. Global Stock Market

ETF	Ticker	TER	Description	Domicile
Vanguard FTSE All-World	VWCE	0.22%	3,700+ companies worldwide	Ireland
iShares Core MSCI World	IWDA	0.20%	1,500+ large caps from developed markets	Ireland
UBS MSCI World	URWF	0.30%	World stocks, CHF-hedged available	Switzerland

When to use: 40-60% of portfolio (core global diversification)

3. U.S. Market Exposure

ETF	Ticker	TER	Description	Domicile
Vanguard S&P 500	VUAA	0.07%	500 largest US companies	Ireland
iShares Core S&P 500	CSPX	0.07%	Same as above, EUR-denominated	Ireland

When to use: 20-40% of portfolio (largest, most innovative economy)

4. Emerging Markets

ETF	Ticker	TER	Description	Domicile
Vanguard FTSE Emerging Markets	VFEM	0.22%	Stocks from developing economies	Ireland
iShares Core MSCI EM IMI	EIMI	0.18%	Broad emerging markets	Ireland

When to use: 10-20% of portfolio (higher growth potential, higher risk)

5. Bonds (Conservative Portfolio Component)

ETF	Ticker	TER	Description	Domicile
iShares Core CHF Bond	CHBOND	0.15%	Swiss government and corporate bonds	Switzerland
UBS SBI Domestic	SDSCHA	0.15%	Swiss franc bonds	Switzerland

When to use: Depends on age and risk tolerance (bonds = stability, lower returns)

Why Ireland-Domiciled ETFs?

Tax advantages for Swiss investors:

• Lower US dividend withholding tax (15% vs 30%)
• Can reclaim partial withholding tax
• EU regulatory protection
• Better than Swiss-domiciled for US stocks

Sample ETF Portfolios for Different Goals

Portfolio 1: Young Investor (Age 25-40, 20+ year horizon)

Allocation:

• 30% Vanguard FTSE All-World (VWCE)
• 30% Vanguard S&P 500 (VUAA)
• 20% iShares Core SPI (CHSPI)
• 20% Vanguard Emerging Markets (VFEM)

Characteristics:

• 100% stocks (aggressive growth)
• Global diversification
• Expected return: 6-8% annually
• Expected volatility: High (30-40% drops possible)

Cost: CHF 20-40/year in ETF fees on CHF 10,000

Portfolio 2: Mid-Career (Age 40-55, 10-20 year horizon)

Allocation:

• 35% Vanguard FTSE All-World (VWCE)
• 25% iShares Core SPI (CHSPI)
• 20% Vanguard S&P 500 (VUAA)
• 10% Vanguard Emerging Markets (VFEM)
• 10% iShares CHF Bond (CHBOND)

Characteristics:

• 90% stocks, 10% bonds
• Balanced growth with slight stability
• Expected return: 5-7% annually
• Expected volatility: Medium-high

Cost: CHF 18-35/year in ETF fees on CHF 10,000

Portfolio 3: Pre-Retirement (Age 55-65, 5-10 year horizon)

Allocation:

• 25% Vanguard FTSE All-World (VWCE)
• 25% iShares Core SPI (CHSPI)
• 20% iShares CHF Bond (CHBOND)
• 15% Vanguard S&P 500 (VUAA)
• 10% UBS SBI Domestic Bonds (SDSCHA)
• 5% Cash/Money Market

Characteristics:

• 65% stocks, 30% bonds, 5% cash
• Preservation with growth
• Expected return: 4-6% annually
• Expected volatility: Medium

Cost: CHF 16-30/year in ETF fees on CHF 10,000

Portfolio 4: Simple "One-Fund" Solution

Allocation:

• 100% Vanguard FTSE All-World (VWCE)

Characteristics:

• Ultimate simplicity
• Instant global diversification (3,700+ stocks)
• Developed + emerging markets
• Single ETF, minimal effort
• Expected return: 6-8% annually

Cost: CHF 22/year in ETF fees on CHF 10,000

How to Start ETF Investing (Step by Step)

Step 1: Open a Broker Account (1-2 weeks)

For beginners: Yuh or Neon Invest

1. Download app (iOS or Android)
2. Complete video identification
3. Fund account (CHF 25-100 minimum)
4. Start trading immediately

For serious investors: Interactive Brokers or Swissquote

1. Fill out online application
2. Upload ID documents
3. Complete W-8BEN form (for US tax)
4. Transfer initial funds
5. Account activated in 3-5 days

Step 2: Determine Your Investment Strategy

Answer these questions:

• Investment time horizon? (5, 10, 20+ years)
• Risk tolerance? (can you handle 30-40% temporary drops?)
• Monthly investment amount?
• Financial goals? (retirement, house, financial freedom)

Rule of thumb for stock/bond allocation:

• Conservative: 100 - your age = % in stocks
• Moderate: 110 - your age = % in stocks
• Aggressive: 120 - your age = % in stocks

Example (age 35, moderate):

• 110 - 35 = 75% stocks, 25% bonds

Step 3: Make Your First Purchase

One-time investment:

1. Transfer funds to broker account
2. Search for ETF ticker (e.g., "VWCE")
3. Click "Buy"
4. Enter amount or number of shares
5. Review and confirm
6. Done! You're an investor.

Automatic monthly investment (recommended):

1. Set up standing order from bank to broker
2. Schedule recurring purchase (monthly/quarterly)
3. Invest automatically (dollar-cost averaging)
4. Never think about market timing

Step 4: Stick to Your Plan

The hardest part:

• Don't panic sell during market drops
• Don't try to time the market
• Keep investing consistently
• Ignore financial news hype
• Review portfolio annually (not daily!)

Tax Considerations for Swiss Investors

What's Taxed and What's Not

NOT taxed (for private investors):

• Capital gains on stocks/ETFs
• This is HUGE and unique to Switzerland
• Buy at CHF 100, sell at CHF 200 = CHF 100 profit, CHF 0 tax

IS taxed:

• Dividends (as regular income)
• Wealth tax (on your total assets)
• Stamp duty on Swiss-traded stocks (0.15%, ETFs often exempt)

Dividend Withholding Tax

The complexity: When foreign companies pay dividends, taxes are withheld at source.

Example (US stock):

• Company pays $100 dividend
• US withholds 15% = $15
• You receive $85
• Switzerland taxes the $100 as income
• You pay double tax on $15!

Solution: Reclaim withholding tax

• File DA-1 form with Swiss tax return
• Reclaim partial withholding tax
• Process can be complex
• Ireland-domiciled ETFs simplify this

Wealth Tax

Annual tax on all assets:

• Rates: 0.1-1.0% depending on canton
• Includes cash, stocks, real estate, etc.
• Threshold varies (CHF 50,000-200,000 depending on canton)

Example (Zurich, single, CHF 100,000 in ETFs):

• Wealth tax: ~CHF 200-400/year

Strategy: Factor into your expected returns

How to Report ETFs on Tax Return

Required information:

• Total value as of December 31
• Dividend income received during year
• Foreign withholding taxes paid

Most brokers provide:

• Annual tax statement
• Summary of all transactions
• Dividend and withholding tax report

Filing:

• Include in Wertschriftenverzeichnis (securities list)
• Report dividend income
• Claim foreign tax credit if applicable

Common Mistakes to Avoid

1. Trying to Time the Market

The mistake: Waiting for the "right time" to invest or selling during drops

The reality:

• Time IN the market beats TIMING the market
• Missing the 10 best days in 20 years reduces returns by 50%
• Dollar-cost averaging eliminates timing stress

2. Chasing Performance

The mistake: Buying last year's top-performing ETF

The reality:

• Past performance doesn't predict future returns
• Yesterday's winner is often tomorrow's loser
• Stick to low-cost, diversified index funds

3. Over-Trading

The mistake: Constantly buying and selling

The reality:

• Each trade costs money (fees + spreads)
• Taxes on short-term gains (if you're professional trader)
• Stress and time wasted
• Lower returns than buy-and-hold

4. Not Diversifying

The mistake: Putting everything in Swiss stocks or one sector

The reality:

• Swiss market is only 2.5% of global market
• Sector concentration is risky (remember dot-com bubble?)
• Global diversification reduces risk

5. Paying Too Much in Fees

The mistake: Using expensive active funds or high-fee brokers

The reality:

• Fees compound negatively over time
• CHF 20,000 saved in fees over 30 years = CHF 50,000+ in final value
• Switch to low-cost options

6. Emotional Investing

The mistake: Panic selling during market crashes

The reality:

• Markets always recover (historically)
• Selling locks in losses
• Biggest gains often come right after biggest drops
• Stay disciplined

Long-Term Returns: What to Expect

Historical Performance (1990-2024)

Index	Average Annual Return	Worst Year	Best Year
Swiss Market (SPI)	7.5%	-32% (2008)	+35% (2009)
S&P 500 (USD)	10.5%	-37% (2008)	+33% (2013)
MSCI World	8.0%	-42% (2008)	+28% (2009)
MSCI Emerging Markets	7.5%	-53% (2008)	+79% (1999)

The Power of Compound Interest

CHF 500/month invested for 30 years at 7% annual return:

Years	Total Invested	Value
5	CHF 30,000	CHF 35,700
10	CHF 60,000	CHF 86,400
20	CHF 120,000	CHF 259,800
30	CHF 180,000	CHF 607,500

Result: Your CHF 180,000 grows to CHF 607,500!

Realistic Expectations

Conservative estimate: 4-5% annually after inflation Moderate estimate: 5-7% annually after inflation Optimistic estimate: 7-9% annually after inflation

Remember:

• Returns are NOT linear (expect volatility)
• Some years will be negative
• Long-term trend is upward
• Patience is rewarded

ETF Investing and Pillar 3a

Can You Hold ETFs in Pillar 3a?

Yes! Many providers now offer Pillar 3a with ETF investment options:

Top Pillar 3a ETF Providers:

• VIAC: Low-cost, customizable ETF portfolios, 0.45% all-in fees
• Finpension: Lowest fees (0.39-0.45%), wide ETF selection
• frankly: UBS-backed, 0.45% fees, good app
• Selma: Robo-advisor approach, 0.68% fees
• PostFinance: Traditional bank, higher fees (~0.8%)

Benefits:

• Tax deduction on contributions (up to CHF 7,056/year for employees)
• Tax-free growth
• ETF returns inside Pillar 3a compound tax-free

Drawbacks:

• Money locked until retirement (age 60-65)
• Early withdrawal only for specific reasons (house, self-employment, leaving Switzerland)

Pillar 3a ETF vs. Regular ETF Portfolio

Pillar 3a ETF:

• Pro: Tax-deductible contributions may may save up to CHF 1,500-3,000/year
• Pro: Tax-free growth
• Con: Locked until retirement
• Con: Slightly higher fees than direct ETF investing

Regular ETF portfolio:

• Pro: Access anytime
• Pro: Lowest possible fees
• Pro: Tax-free capital gains
• Con: No tax deduction on contributions
• Con: Dividends taxed as income
• Con: Wealth tax applies

Optimal strategy: Max out Pillar 3a first, then invest additional savings in regular ETF portfolio.

Building Your ETF Investment Routine

Monthly Investment Checklist

Automatic (set once, forget):

• Standing order transfers CHF X to broker
• Automatic purchase of chosen ETF(s)
• Happens on same day each month

Manual review (quarterly):

• Check portfolio performance (don't obsess!)
• Ensure automatic investments executed
• Adjust amounts if income changed

Annual tasks:

• Rebalance if allocation drifted >5%
• Review investment strategy
• Update for life changes
• File taxes (report holdings and dividends)

How to Rebalance

Purpose: Maintain your target allocation

Example:

• Target: 60% stocks, 40% bonds
• After good year: 70% stocks, 30% bonds (stocks grew more)
• Action: Sell some stocks, buy bonds to return to 60/40

When to rebalance:

• Annually
• When allocation drifts >5% from target
• During contributions (buy what's underweight)

Tax-efficient rebalancing:

• Direct new investments to underweight assets
• Avoid selling (which could trigger dividend withholding issues)
• Use Pillar 3a contributions for rebalancing

Resources for Continuing Education

Swiss-Focused Websites

mustachianpost.com

• Swiss FIRE (Financial Independence, Retire Early) community
• Forum with experienced investors
• Specific advice for Switzerland
• Active discussions on brokers, ETFs, taxes

moneyland.ch

• Compare brokers and fees
• Independent reviews
• Regular updates

swissquote.ch/learn

• Educational resources
• Market insights
• Webinars

International Resources (applicable to Switzerland)

Vanguard Investor Education

• Principles of investing
• Asset allocation guidance
• Research papers

Bogleheads.org

• Index investing community
• Simple, effective strategies
• Evidence-based advice

Books (Available in English/German)

• "The Little Book of Common Sense Investing" - John Bogle
• "A Random Walk Down Wall Street" - Burton Malkiel
• "The Intelligent Investor" - Benjamin Graham
• "Your Money or Your Life" - Vicki Robin

Conclusion: Start Your ETF Journey Today

ETF investing is the most accessible, cost-effective way for Swiss residents to build long-term wealth. The key principles:

1. Start early - Time in market matters most 2. Invest regularly - Monthly contributions beat market timing 3. Keep it simple - Diversified, low-cost ETFs win 4. Stay disciplined - Ignore short-term volatility 5. Minimize fees - Every franc saved in fees is a franc invested

Even starting with CHF 100/month, you can build substantial wealth over decades. The perfect time to start was yesterday. The second-best time is today.

Open an account with Yuh or Interactive Brokers, buy your first share of VWCE or CHSPI, and join the thousands of Swiss investors building their financial future through ETFs.

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In the future, checkeverything.ch will feature an interactive ETF portfolio builder and broker comparison tool to help you optimize your investments. Stay tuned!