ETF savings plans in Switzerland: simply explained

What is an ETF savings plan?

An ETF savings plan is an automated order with which you invest a fixed amount into one or more ETFs at fixed intervals — usually monthly. An ETF (exchange-traded fund) tracks an entire index, for example the MSCI World or the SMI, and thereby automatically spreads your money across hundreds to thousands of companies.

Instead of picking individual shares, you buy a broad basket of securities with a single ETF. That reduces your risk and your effort. The savings plan turns this logic into an automatism: you always invest the same amount, regardless of the current price level.

How does an ETF savings plan work?

With an ETF savings plan, you automatically buy units of your chosen ETF at fixed intervals — with many providers even fractions (fractional trading). Two effects make the savings plan strong over the long term:

Cost averaging effect

Because you always invest the same amount, you receive more units in phases with low prices and fewer in expensive phases. That smooths the average purchase price and takes market timing off your hands. The following chart illustrates the cost averaging effect in an ETF savings plan.

Compound interest effect

Returns that remain in the ETF generate returns themselves. Over long periods, this effect becomes the biggest lever of your wealth building. The longer the investment horizon, the stronger compound interest works: after 30 years, well over half of the portfolio value comes from performance, not from your own contributions. The following chart illustrates the compound interest effect in an ETF savings plan.

Important: this is a simplified model calculation without fees and taxes. Real returns fluctuate, are not guaranteed, and past performance is no guarantee for the future.

ETF savings plan or strategy savings plan?

In Switzerland there are two types of savings plan, which differ in how much you decide yourself:

• ETF savings plan: you pick the individual ETFs yourself, for example an MSCI World or an SMI ETF. Typical at brokers and neobanks such as Swissquote, Saxo, Yuh or neon.
• Strategy savings plan: you choose a predefined portfolio based on your risk profile. Typical at digital asset managers (robo-advisors) such as VIAC, finpension, True Wealth or findependent — including automatic rebalancing and a tax statement.

Both work on the same principle: you save regularly into a fund. Which variant suits you better depends on whether you want to pick yourself or would rather delegate everything.

What does an ETF savings plan cost?

The costs of an ETF savings plan consist of two levels:

Costs per contribution

The following costs are incurred with every investment into your ETF savings plan:

• Brokerage or execution fee for the purchase
• Currency markup (FX markup) if the ETF is not traded in francs
• Swiss federal stamp duty (transfer tax)

Running costs per year

These costs are incurred on your invested assets:

• Product costs of the ETFs themselves (TER = total expense ratio)
• Management fee of the provider (custody fees and similar)

An important Swiss specific is stamp duty: it amounts to 0.075 % for Swiss ETFs and 0.15 % for foreign ETFs, and is only charged by Swiss brokers. Providers that use index funds instead of ETFs (VIAC, for example) are exempt.

As a rule of thumb: the lower the annual total costs, the more of your return stays with you. With low-cost Swiss providers, annual total costs are well below 1 %.

Who is an ETF savings plan suitable for?

An ETF savings plan suits anyone who wants to build wealth in a disciplined way, over the long term and without much effort. What matters is not the size of the contribution but regularity and an investment horizon of at least five to ten years. With many Swiss providers you can start from just a few francs a month.

What are the advantages of an ETF savings plan?

An ETF savings plan combines broad diversification, low costs and automation. The main advantages:

• Broad diversification with a single product
• Low costs thanks to passive index tracking
• Automated wealth building without market timing
• Cost averaging effect that smooths price fluctuations
• High flexibility: unlike pillar 3a, you can sell your ETFs at any time
• ETFs count as segregated assets and remain protected if the provider becomes insolvent

How do I start an ETF savings plan?

Four steps to your own ETF savings plan:

1. Choose a provider. Compare fees, ETF selection and minimum contribution. You’ll find the overview in the ETF savings plan comparison.
2. Open a custody account. With most providers, opening runs entirely digitally.
3. Choose an ETF or investment strategy. Look for broad diversification, a low TER and — where possible — trading in CHF on the SIX to save currency costs.
4. Set the contribution and interval. Define the amount and rhythm, automate the order — done.

The best ETF savings plan providers in Switzerland

The Swiss market has developed strongly: from low-cost online brokers to fully automated robo-advisors, there is now a suitable solution for every budget. The best-known providers include Swissquote, Saxo, Yuh and neon, as well as the strategy-based providers VIAC, finpension, True Wealth and findependent.

Which provider is cheapest for you depends on your contribution, the ETF selection you want and the features. You’ll find the full overview with all fees in our ETF savings plan comparison Switzerland.

Which ETF is suitable for a savings plan?

For a long-term ETF savings plan, broadly diversified ETFs on a global equity index are particularly suitable. An ETF on the MSCI World or the FTSE All-World invests in over a thousand companies from numerous countries with a single product. Anyone who wants a home-market share combines it with a Swiss index such as the SMI.

What to look for when choosing an ETF:

• Broad diversification: the more companies and regions an ETF covers, the lower the concentration risk.
• Low TER: the running costs of good global ETFs are often below 0.20 % per year.
• Trading in CHF on the SIX: saves currency costs compared with ETFs in USD or EUR.
• Accumulating or distributing: accumulating ETFs automatically reinvest dividends — practical for long-term wealth building. Distributing ETFs pay out dividends, which can make sense for regular income.