S&P 500 investing as a Swiss (USD/CHF)

[stayfrosty]

As a beginner using Interactive Brokers and wishing to invest in an accumulating ETF replicating the S&P 500, I'm wondering whether the gain made with an ETF like the iShares Core S&P 500 UCITS ETF (Acc) or the Vanguard S&P 500 UCITS ETF (USD) won't be outweighed by the devaluation of the USD against the CHF.

Could ETFs like the iShares S&P 500 CHF Hedged UCITS ETF (Acc) be a good solution/alternative?

Does the gain made with an ETF like the first two above more than compensate for the devaluation of the USD?

What would be the best ETF (if possible accumulating) replicating the S&P 500 for a Swiss investor?

Do you have any opinions, advice or feedback to give me, that would help me so much

 

[godsgirl12]

@stayfrosty Currency does not matter long term, you have to think through the layers you are investing and figure out where value is created:

Sp500 ETF denominated in USD

Companies in SP500 ETF are listed in USD

Revenue in companies of SP500-> lot of USD but also revenue from abroad in EUR / CHF etc. Expenses of these companies USD, EUR CHF, depending where their employees work, machines are bought etc.

The currency hedging in this case is done on the level of a single company in the SP500 so it remains profitable. They do a fairly good job with that.

So the currency the levels above are denominated in is irrelevant, it could be Zimbabwe Dollars for all we care, that would result in some pretty sick returns in that currency. . But in your currency it would result in the same return as if all where listed in USD.

This is fundamental to understand in my opinion, investing makes you a part owner of that company, so you better understand how companies create value.

If this problem where solvable by switching the fund currency everybody would be doing it and ETFs would just be offered in one currency.

 

[yhwh_will_uplift]

@godsgirl12 Thanks, so many people do not understand this

 

[kimoe]

@godsgirl12 Currency does not matter long term is some of the worst advice you could get

 

[godsgirl12]

@kimoe I meant this in the context of currency a fund is traded in.

 

[karenlly]

@stayfrosty If the underlying equity is USD denominated, you are taking the USD - CHF currency risk, it's just obvious in the USD denominated etf over the CHF one.

Also, there's no advantage of an accumulating ETF over the distributive one from the tax point of view. Both are taxed the same on the dividends or the dividend equivalent.

Just go for the one with the lowest TER (VOO)

 

[godsgirl12]

@karenlly that is not true (currency part), see my explanation farther down.