Choice of stock exchange to buy foreign ETFs

P

Pit

New member
Hi everyone

Newbie here. I have a question and hope to get some input, this blog & forum are invaluable resources!

I opened an account with Saxo and want to invest a bigger amount of savings in ETFs. I’m looking at buying an all world ETF, developed Europe ETF and Swiss ETFs. Choosing an European ETF to reduce my USD exposure and Swiss ETF for home bias.

  • 60% Vanguard Total Stock Index Fund ETF (USD), US9220427424
  • 20% Vanguard FTSE Developped Europe UCITS ETF (EUR), domicile Ireland, IE00B945VV12
  • 20% iShares Core SPI (CH) ETF (CHF), domicile Switzerland, CH0237935652
Does this make sense? Any suggestions on better choices or different allocation? I’m aware that I’m doubling Europe and tripling Switzerland, but I guess I cannot avoid this.

The first ETF I would buy at NYSE in USD after exchanging CHF to USD.

However, I’m unsure what to do with the second ETF; it is traded at stock exchanges in the EU in EUR (London, Milano, Amsterdam, etc.) and Switzerland in CHF. I tend to think that buying in Switzerland makes more sense because I save on forex fees and I’m still exposed to EUR. Is this correct? Is there anything else I have to consider when deciding where to buy my European ETF (fees, taxes,,…)?

When looking at performance over the past 5y of a certain ETF (e.g. IE00B945VV12), it looks very different depending on whether it is traded at Swiss Stock Exchange and Euronext, with Euronext being better. Is this due to CHF/EUR exchange rate?

Thanks so much for your input, very much appreciated!
 
Hi Pit

Welcome to the forum.

I think your strategy makes sense.

I generally recommend buying an ETF in the currency it is holding. So, if the ETF is holding EUR, I would buy it in EUR. This makes my accounting easier. By buying in CHF, you don't avoid FOREX fees, they are just integrated into the exchange (but potentially better than Saxo).
 
Hi Baptiste, thank you! Saxo has lots of ETF options now for Autoinvest, so I might still consider an EUR ETF traded in Switzerland just to make it easier and save on fees.
 
Pit said:
Hi Baptiste, thank you! Saxo has lots of ETF options now for Autoinvest, so I might still consider an EUR ETF traded in Switzerland just to make it easier and save on fees.
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Just keep in mind that transaction fees are due once while TER is due every year. I am not saying to not do auto-invest, but don't choose your ETFs solely for saving transactions fees.
 
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