Indexed Funds

[AMEJ]

Hi,

I am still in the learning process and feel very lost. In the blog, it clearly stated that ETFs are preferred over mutual funds, and this is because the good fund providers do not offer them in Europe. I can see though that Swissquote is offering Fidelity UCITS MSCI Index Funds (IE00BYX5P602), for instance. Why is still ETF preferred? I cannot see the difference yet between them.

Thanks

 

[Baptiste Wicht]

Hi @AMEJ

The main problem is that this fund is a European fund (UCITS in the name). As a result, it is not tax-efficient for us Swiss investors since we cannot reclaim the 15% US dividends that are lost before they reach us.

Also, these funds are usually more expensive than the better US funds. There is nothing wrong with index funds, they are just less efficient than ETFs in the choice we have in Switzerland.