Investment Funds for Future

Finance, Taxes, Banking, Insurance and Retirement
61
Are the tobacco and the oil companies going to be hit with further liability issues? I do hope so.

62
Ok, I believe we narrow it down pretty nicely now. What is usually widely recommended (as first-choice no-brainer) is S&P 500 tracker like Vanguard VOO.

Why would you recommend VT over VOO?

63
I prefer to have the global exposure of VT over solely US exposure of VOO. VT is something like 70% US exposure though. I think you‘ll find a lot of personal finance blogs are written from a US perspective, which leads to a home country bias. Historically VOO has returned more than VT. It‘s also a solid choice. Previously I‘ve had a blend of VEA which is developed markets excluding the US and NASADAQ because I wanted more US tech exposure rather than S&P.

64

My 2 cent on dividend seeking strategy: not only investing in dividend paying companies is not increasing the average return (so you are increasing your risk by decreasing diversity, without a premium in returns, see for example https://www.youtube.com/watch?v=4iNOtVtNKuU ), but in Switzerland actually dividend vs capital gains (e.g. via a stock buyback) actually matter and not in favour of dividends: most of us pay income tax on dividends and not on capital gains, so it’s a strategy that increases risk and volatility and decreases after-tax returns

65

Thank you all for really clear insights and dividend warning.

I have also a really interesting piece about choice between iShares and Vanguard:
https://greeneryfinancial.com/ishares-vs-vanguard/

“The two deciding factors between these two ETF “brands” would be if you’re a non-US tax resident or if you’re a US citizen with tax residency in the United States. The reason being, some Vanguard ETF’s have disadvantageous dividend taxation for non-US tax residents (such as a European Citizen) , while iShares has a friendlier tax structure, but again it saves minimal, even in the long-run.”

Did someone of you already experienced or analysed this topic?

66
You can get full withholding tax (I and II) back on Vanguard's US-domiciled ETFs, residing in CH (and with the right broker).

And then you pay regular CH income tax on those received dividends.

67
Why would you choose to pay taxes you don't need to and why would you choose companies who's management is committed to making an annual pay out over good business opportunities and growing the company???

68
Why would you reply without reading the related posts?

I was answering the question and claim on iShares vs Vanguard set of funds, w.r.t. tax treatment/advantage.

If you invest in a broad ETF, you don't get to choose what you are talking about. (Apart from some tilts)

Side note:

Distributing or accumulating ETF does not matter, as the latter will also be taxed as if it was distributing.

69
According to my accountant the withholding tax needs to be over CHF 100 to be able to reclaim it.

So earlier in this his thread you say choose a blue chip index and now you say avoid dividend paying stocks. Which is it? Even NASDAQ has constituents that pay dividends.

70
So that actually means that there is no specific difference for Switzerland between iShares and Vanguard (tax-wise), right?

I am using Interactive Brokers (you mentioned "the right broker").

71
Know the difference between choosing to do something and being unable to avoid it.

72
Shame you don't actually read the posts and answer the exam question rather than writing what you think the answer should be and then double down with a typically condescending answer when challenged. Not a good look, but you do you.

Makes it rather difficult to have a conversation, which is a pity given you clearly have good knowledge.

73
I'm also retired and don't really care....

74
So, referring to US ETFs:

1. US puts 15% withheld (special deal with Switzerland) which you can fully take back.

2. Does Switzerland from its side put 35% tax (income tax) on the dividends of US ETFs? And these you cannot take back? Or is it really your regular income tax that is depending on your whole income (the one that rises significantly over 120k)? If yes, then what the 35% taxation number refers to?

75
I'm happy that you're a person that managed to develop itself successfully in financial intelligence, but at the same time sad that you seem to have neglected the social development part.

Yeah, I know that your don't care about this one too.

76
Depends which iShares and Vanguard funds you are looking at. You need to look at the fact sheets. For example the ones that GParker shared are, apart from the Swiss dividend fund domiciled in Ireland. For those you can’t claim back the foreign withholding tax.

Can’t comment on IB being the right broker or not, as I’m forced to use my employer’s services, who fortunately do have the right arrangement in place.