ETF choice (world index - accumulating - fee max 0.25)

[chinenyea]

@ugojesus You can activate recurrent (automatic) investments. Then the exchange cost ist zero or almost.

 

[baruch1981]

@tobiahjude99 Is the option of dividend reinvestment subjected to tax?

 

[tobiahjude99]

@baruch1981 Any dividend you receive or is used in accumulating funds is the same. You have to declare it in your tax declaration.

 

[baruch1981]

@tobiahjude99 Thank you.

 

[strobertofsalzburg]

@ugojesus IE000716YHJ7
But not much liquidity, and based in Ireland

 

[ugojesus]

@strobertofsalzburg Thanks! Would you recommend something else with a higher volume?

 

[strobertofsalzburg]

@ugojesus In CHF, accumulating, I don't know any others. But honestly, I was once in the same dilema as you: it is better to choose VT because the product which I wrote the ISIN is based on Ireland and as others stated, you lose a part of the dividends.

 

[virtualhope]

@ugojesus IWDA, if you don't want EM.

 

[jjmaleyscw]

@ugojesus Accumulating is not a good choice if you live in Switzerland. Distributing would be a better choice.

 

[bookit]

@jjmaleyscw Why is that? Taxes are the same

 

[jjmaleyscw]

@bookit https://thepoorswiss.com/distributing-vs-accumulating/

 

[ugojesus]

@jjmaleyscw Thank you for the link, super user friendly explanation

 

[evietheturtle]

@jjmaleyscw That only makes sense if you actually buy ETFs domiciled in the US.

 

[ugojesus]

@jjmaleyscw Which ETF would you recommend then?

 

[jjmaleyscw]

@ugojesus VT. but choices depends on your preferences and goals.

 

[ugojesus]

@jjmaleyscw In USD currency?

 

[violet181]

@ugojesus Yes. The currency does not matter

 

[jjmaleyscw]

@violet181 I am not able to understand why. I read a lot and everyone says that but I don't get it. Do you mind explaining in a simple way?

 

[violet181]

@jjmaleyscw Let’s say there are two ETFs that track only Apple. One in CHF, one in USD. You put an equal amount of money into both. Now if Apple goes up in value (it’s a US stock, so it goes up in USD), both ETFs will go up with the same amount in “value”.

If at the same time the USD lost 5% against the CHF, then the ETF denominated in CHF will only go up 5% whereas the other ETF denominated in USD will go up 10%. But, if you transfer the USD back to CHF, you have the same amount

 

[jjmaleyscw]

@violet181 Thank you. As such I should always look at returns in CHF? Even if my ETF is in USD. Does it matter at what price I buy USD currency or CHF?