Hello,
May I start be saying that I have very much enjoyed the excellent threads on this forum, particularly the Interactive Brokers thread. I have learned alot!
I am in a position where I would like to start buying into an ETF (which I have already identified). The ETF is available through Interactive Brokers in CHF, GBP or EUR.
I currently live in Switzerland and pay CHF into my Interactive Brokers account (although I could also pay in GBP, from UK savings). I will in the not too distant future likely return to UK for the long-term. I will almost certainly retire in UK. I hope to keep investing into this ETF long term, as a key part of my financial planning. i believe that I can move with Interactive Brokers and continue my positions.
Would it make sense for me to buy the GBP ETF on that basis, or am I overthinking things!? I am thinking that it might be beneficial because, over the long-term, I am likely to invest GBP rather than CHF.
Any suggestions appreciated!
The currency of the ETF doesn't really matter. The ETF will have underlying holdings in various currencies (depending on the ETF - if it's Global/US/EU/etc.)
InteractiveBrokers is also excellent for currency conversion and holding multiple currencies.
Personally, I hold all my cash and positions in USD - I'm not from there and don't intend to live there, but I tend to invest in USD-denominated assets.
So I would judge the ETFs by their total fees per year. I tend to go with ETFs from Vanguard.
I normally go for the ones with highest liquidity, which is typically the US.
I probably should have added that the ETF will be Vanguard FTSE All-World UCITS ETF.
I think this is from an IB (Interactive Brokers) administrative point of view. But how about the currency strength? I believe CHF tends to be strong. If the OP invest in terms of CHF, when he liquify in the future his investment, he will not only harvest the capital gain in terms of CHF (assume the value goes up) but also the currency conversion between CHF and GBP.
If you are investing for the long term in a broad world etf, currency won't matter, what will matter is the amount you will save with the lower TER of the US domiciled ETF. Just buy VT in USD.
I thought investing in US ETFs from Switzerland was not allowed since this year. Am I missing something?
not sure if this is applied, since I can still buy US etfs without problem.
AFAIA there's no such restriction.
But the products must now be MIFID-2 compliant, which among others requires a KIID, the Key Investors Information Documents.
Currency strength has nothing to do with it. Like mentioned above (unless the ETF is hedged in that currency) the currency itself does not play a role in how much you will earn (with a few small nuances such as currency conversion fee or liquidity).
You can see it like this: today 1CHF = 1EUR, you want to buy a new car and you have a choice: buy one car for 20.000 CHF or buy another car which is exactly the same for 20.000 EUR. Then you say "I will buy one for 20.000 CHF since I want to retire in Switzerland, I am afraid that if EUR drops in value my car looses the value" - but that's not how it works, both choices are equivalent - you are buying the same exact product, the two cards will maintain the same value forever.
Same here, since you are buying the same ETF - whatever the currency it is the same pieces of stocks inside of it